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 JUNE 30, 2002

   [ ] 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                                              43-1594165
--------------------------------------------------------------------------------
 (STATE OR OTHER JURISDICTION                                  (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION)                            IDENTIFICATION NO.)

                36 W 44TH STREET - SUITE 1201, NEW YORK, NY 10036

                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (646) 728-7023

                            ISSUER'S TELEPHONE NUMBER

                      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:  JUNE 30,  2002  37,002,000
                                                    ----------------------------

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


<PAGE>

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS

                         INDEPENDENT ACCOUNTANT'S REPORT

The X-Change Corporation

        We  have  reviewed  the  accompanying  balance  sheets  of The  X-Change
Corporation  as of June  30,  2002  and  December  31,  2001,  and  the  related
statements  of  operations  for the three and six months ended June 30, 2002 and
2001 and  statement of cash flows for the six month  periods ended June 30, 2002
and 2001.  These financial  statements are the  responsibility  of the Company's
management.

        We conducted our review in accordance with standards  established by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.

        Based on our review, we are not aware of any material modifications that
should  be made  to the  accompanying  financial  statements  for  them to be in
conformity with generally accepted accounting principles.

                                                   Respectfully submitted

                                                    \s\ Robison, Hill & Co.
                                                   -----------------------------
                                                   Certified Public Accountants

Salt Lake City, Utah
August 6, 2002

                                       F-2


<PAGE>




                            THE X-CHANGE CORPORATION
                                 BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                           June 30,       December 31,
                                                             2002             2001
                                                        ---------------  ---------------
ASSETS:
Current Assets:

<S>                                                     <C>              <C>
   Cash                                                 $             -  $         4,055
   Accounts Receivable                                           27,837                -
   Salary Advances                                                3,000                -
   Deposits                                                      26,351
   Prepaid Expenses                                              32,045                -
                                                        ---------------  ---------------

       Total Current Assets                                      89,233            4,055
                                                        ---------------  ---------------

Fixed Assets:
   Hardware                                                     100,602                -
   Office Equipment                                              16,982           11,349
   Accumulated Depreciation                                      (7,358)          (1,527)
                                                        ---------------  ---------------

       Net Fixed Assets                                         110,226            9,822
                                                        ---------------  ---------------

Intangibles and Other Assets:
   Licensing and Distribution Rights - WebIAm                   522,710          483,758
   Accumulated Amortization                                    (150,340)         (67,189)
                                                        ---------------  ---------------

       Net Intangible and Other Assets                          372,370          416,569
                                                        ---------------  ---------------

Total Assets                                            $       571,829  $       430,446
                                                        ===============  ===============
</TABLE>






                                       F-3


<PAGE>


                            THE X-CHANGE CORPORATION
                                 BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                           June 30,       December 31,
                                                             2002             2001
                                                        ---------------  ---------------


LIABILITIES AND STOCKHOLDERS' EQUITY:
-------------------------------------
Current Liabilities:
<S>                                                     <C>              <C>
   Accounts payable                                     $       215,604  $        78,010
   Bank Overdraft                                                 5,352                -
   Deferred Revenue                                              55,401                -
   Loans payable - shareholders                                 230,936           44,418
                                                        ---------------  ---------------

          Total Current Liabilities                             507,293          122,428
                                                        ---------------  ---------------


Stockholders' Equity:


   Preferred Stock, Par Value $.001,
   Series A Convertible - 5,000,000 Shares Authorized,
   Issued 5,000,000 and 914,500
   at June 30, 2002 and December 31, 2001                         5,000              915
  Common Stock, Par value $.001, Authorized
   100,000,000 Shares, Issued 37,002,000 and 1,100,000
   at June 30, 2002 and December 31, 2001                        37,002           11,000
  Paid-In Capital                                             2,106,492        1,137,585
  Retained Deficit                                           (2,083,958)        (841,482)
                                                        ---------------  ---------------
     Total Stockholders' Equity                                  64,536          308,018
                                                        ---------------  ---------------

     Total Liabilities and Stockholders' Equity         $       571,829  $       430,446
                                                        ===============  ===============
</TABLE>









                 See accompanying notes and accountants' report

                                       F-4


<PAGE>

                            THE X-CHANGE CORPORATION
                             STATEMENT OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                     For the Three Months             For the Six Months
                                             Ended                          Ended
                                           June 30,                        June 30,
                                ------------------------------- ------------------------------
                                     2002            2001            2002            2001
                                --------------  --------------- --------------  --------------

<S>                             <C>             <C>             <C>             <C>
Revenues                        $      162,636  $             - $      293,741  $            -
                                --------------  --------------- --------------  --------------

Expenses:
   Selling & Marketing                     375                -          1,415               -
   General & Administrative            890,185          298,936      1,532,729         404,082
                                --------------  --------------- --------------  --------------

Operating Loss                        (727,924)        (298,936)    (1,240,403)       (404,082)

Other Income (Expense):
   Interest                               (939)            (837)        (2,073)         (1,374)
                                --------------  --------------- --------------  --------------

Loss Before Income Taxes              (728,863)        (299,773)    (1,242,476)       (405,456)
   Income Taxes                              -                -              -               -
                                --------------  --------------- --------------  --------------

     Net Loss                   $     (728,863) $      (299,773)$   (1,242,476) $     (405,456)
                                ==============  =============== ==============  ==============

Basic & Diluted loss per share  $       (0.01)  $        (0.31) $       (0.01)  $       (0.48)
                                ==============  =============== ==============  ==============
</TABLE>














                 See accompanying notes and accountants' report

                                       F-5


<PAGE>



                            THE X-CHANGE CORPORATION
                             STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                             For the Six Months Ended
                                                                     June 30,
                                                          -------------------------------
                                                               2002            2001
                                                          --------------  ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                       <C>             <C>
Net Loss                                                  $   (1,242,476) $      (405,456)

Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
   Depreciation and Amortization                                  88,982              330
   Issuance of Preferred Stock for Expenses                            -            6,800
   Issuance of Common Stock for
      Licensing Rights                                                 -          150,000

Change in operating assets and liabilities:

(Increase) Decrease in Accounts Receivable                       (27,836)               -
(Increase) Decrease in Salary Advances                            (3,000)               -
(Increase) Decrease in Deposits                                  (26,350)               -
(Increase) Decrease in Prepaid Expenses                          (32,044)               -
Increase (Decrease) in Accounts Payable                          137,594           68,111
Increase (Decrease) in Bank Overdraft                              5,352
Increase (Decrease) in Deferred Revenues                          55,401                -
                                                          --------------  ---------------

  Net Cash Used in Operating Activities                       (1,044,377)        (180,215)
                                                          --------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of Hardware                                            (100,601)               -
Purchase and Development of Licensing Rights                     (38,952)        (381,398)
Purchase of Office Equipment                                      (5,632)          (4,300)
                                                          --------------  ---------------

Net Cash Provided by Investing Activities                       (145,185)        (385,698)
                                                          --------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:

Loans from Shareholders                                          226,518           30,833
Payment of Shareholder Loans                                     (40,000)               -
Issuance of Common Stock for Cash                                      -           75,000
Issuance of Preferred Stock for Cash                             998,989          590,000
                                                          --------------  ---------------

Net Cash Provided by Financing Activities                      1,185,507          695,833
                                                          --------------  ---------------
</TABLE>

                                       F-6


<PAGE>



                            THE X-CHANGE CORPORATION
                             STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                             For the Six Months Ended
                                                                     June 30,
                                                          -------------------------------
                                                               2002            2001
                                                          --------------  ---------------

<S>                                                       <C>             <C>
Net (Decrease) Increase in Cash and Cash Equivalents      $       (4,055) $       129,920
Cash and Cash Equivalents at Beginning of Period                   4,055                -
                                                          --------------  ---------------

Cash and Cash Equivalents at End of Period                $            -  $       129,920
                                                          ==============  ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for:
  Interest                                                $            -  $             -
                                                          --------------  ---------------
  Franchise and income taxes                              $          680  $             -
                                                          --------------  ---------------
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING

ACTIVITIES:

On June 30, 2001,  the Company  issued  150,000  common  shares valued at $1 per
share for partial payment of licensing rights for WebIAm Software.

                 See accompanying notes and accountants' report

                                       F-7


<PAGE>

                            THE X-CHANGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                   (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Interim Reporting

        The unaudited financial statements as of June 30, 2002 and for the three
and six month periods 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
six 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.

                                       F-8


<PAGE>

                            THE X-CHANGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                   (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(Continued)

Nature of Business

        The Company has  completed  the  software  and  regulatory  undertakings
necessary   to  allow  for  the   introduction   of  the  first   phase  of  the
Internet-accessible Alternative Trading System(ATS) WEBIXTRADER. The System will
be utilized by brokerages to transact  business in Microcap  Securities that are
currently quoted on the Nasdaq OTC Bulletin Board. The Company will offer access
to its  web-based  System on a  subscription  basis which will be  available  to
registered  brokerages  only. The Company will charge  transaction  fees for all
transactions that are processed through the System by each subscriber.

        In addition to the WEBiX exchange software  license,  the Company has an
exclusive royalty free license to the ABS exchange; the eBond exchange; the High
Grade software;  the New Issue software;  the Parts exchange;  and the jsBuilder
software.  The Company may re-sell these system  licenses to clients and thereby
earn  additional   revenue.   Additionally,   the  Company  anticipates  earning
additional   revenue  from   customization  of  these  Systems  to  meet  client
specifications.

        The  Company  also  acts  as  a  Service  Bureau  providing   facilities
management,   managed  services,   and  web  hosting  to  client  licensees  and
non-licensee customers.

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.

                                       F-9


<PAGE>


                            THE X-CHANGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                   (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(Continued)

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.

Advertising Costs

        Advertising costs are expensed as incurred.  Advertising expense for the
three months ended June 30, 2002 was $375.

Property and Equipment

        Property and equipment are stated at cost.  Depreciation is provided for
in amounts  sufficient  to relate the cost of  depreciable  assets to operations
over their estimated service lives,  principally on a straight-line basis from 3
to 5 years.

        Upon sale or other  disposition of property and equipment,  the cost and
related  accumulated  depreciation or amortization are removed from the accounts
and any gain or loss is included in the determination of income or loss.

        Expenditures  for  maintenance  and  repairs  are  charged to expense as
incurred.  Major overhauls and betterments are capitalized and depreciated  over
their useful lives.

        The Company  identifies  and  records  impairment  losses on  long-lived
assets such as property and  equipment  when events and  circumstances  indicate
that such assets  might be  impaired.  The  Company  considers  factors  such as
significant  changes in the regulatory or business  climate and projected future
cash flows from the  respective  asset.  Impairment  losses are  measured as the
amount by which the carrying amount of intangible asset exceeds its fair value.

                                      F-10


<PAGE>

                            THE X-CHANGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                   (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(Continued)

        The  reconciliations  of the  numerators and  denominators  of the basic
income (loss) per share computations are as follows:
<TABLE>
<CAPTION>
                                                                                  Per-Share
                                                  Income           Shares           Amount
                                                (Numerator)     (Denominator)

                                                  For the Three Months Ended June 30, 2002
BASIC LOSS PER SHARE

<S>                                           <C>                   <C>         <C>
Loss to common shareholders                   $      (728,863)      85,822,000  $       (0.01)
                                              ===============  ===============  ==============

                                                  For the Three Months Ended June 30, 2001

BASIC LOSS PER SHARE

Loss to common shareholders                   $      (299,773)         957,468  $       (0.31)
                                              ===============  ===============  ==============

                                                   For the Six Months Ended June 30, 2002

BASIC LOSS PER SHARE

Loss to common shareholders                   $    (1,242,476)      83,997,000  $       (0.01)
                                              ===============  ===============  ==============

                                                   For the Six Months Ended June 30, 2001

BASIC LOSS PER SHARE

Loss to common shareholders                   $      (405,456)         841,968  $       (0.48)
                                              ===============  ===============  ==============
</TABLE>
        The effect of outstanding common stock equivalents are anti-dilutive for
June 30, 2002 and 2001 and are thus not considered.

NOTE 2 - INCOME TAXES

        As of June 30, 2002, the Company had a net operating  loss  carryforward
for income tax reporting purposes of approximately $2,085,000 that may be offset
against future taxable income through 2021. Current tax laws limit the amount of
loss  available to be offset  against  future  taxable income when a substantial
change in ownership  occurs.  Therefore,  the amount  available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements,  because the Company  believes  there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount.


                                      F-11


<PAGE>


                            THE X-CHANGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                   (Unaudited)

NOTE 3 - COMMITMENTS

        On June 25, 2001, the Company  entered into a three year lease agreement
for its office  facilities.  The rental  charges  are  approximately  $54,000 to
$57,000 per year.  On April 10, 2002,  the Company  entered  into another  lease
agreement  for five  years to rent  additional  office  facilities.  The  rental
charges for these lease are  approximately  $8,500 to $9,700 per month  starting
June 1, 2002.

        The minimum  future lease  payments under these leases for the next five
years is:

                                                  3 Year             5 Year
                                              --------------     --------------
                                      2003            55,620            101,400
                                      2004            57,289            104,949
                                      2005                 -            108,622
                                      2006                 -            112,424
                                      2007                 -            116,359
                                              --------------     --------------

       Total Minimum Future Lease Payments           112,909            543,754
                                              --------------     --------------


        In conjunction  with the  acquisition of WebIAm,  the Company  assumed a
data center lease of $5,700 per month through September of 2002.

NOTE 4 - LOANS FROM SHAREHOLDERS AND OTHER RELATED PARTY

TRANSACTIONS

        As of June 30, 2002 and December 31, 2001,  shareholder payables include
approximately  $230,936 and $44,418 owing to  shareholders  of the Company at an
interest rate between 4.75% to10%.

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.

                                      F-12


<PAGE>

                            THE X-CHANGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                   (Unaudited)

NOTE 5 - PREFERRED STOCK (Continued)

        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.

NOTE 6 - STOCK SPLIT

        On July 16, 2001, WEBiX,  Inc.'s Board of Directors  authorized a 60,000
to 1 stock split. As a result of the split,  599,990 shares were issued. Also on
July 16,  2001,  the  number of  authorized  shares  was  increased  from 100 to
7,500,000  Common and 1,500,000 shares of Preferred along with the par value was
changed from $1 to $.01. All references in the accompanying financial statements
to the number of common shares and per-share amounts for 2001 have been restated
to reflect the stock split.

NOTE 7 - STOCK TRANSACTIONS

        On June 30, 2001,  the Company issued 150,000 common shares valued at $1
per share for partial payment of licensing rights for WebIAm Software.

        Throughout  2001,  350,000 shares of common stock were purchased at $.21
per share and 895,000 shares of preferred  stock were purchased at $1 per share.
Also 19,500 preferred shares were issued in exchange for services.

        During the first quarter of 2002, 800,000 shares of Series A Convertible
Preferred Stock were issued for cash at $1 per share.

        During  the  second  quarter  of  2002,   200,000  shares  of  Series  A
Convertible Preferred Stock were issued for cash at a $1 per share.

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

                                      F-13


<PAGE>


                            THE X-CHANGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                   (Unaudited)

NOTE 8 - MERGER/ACQUISITION (Continued)
---------------------------

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. All references in the accompanying  financial statements to the number of
Series A Convertible  Preferred shares and per-share  amounts for 2001 have been
restated to reflect the change in par value.

                                      F-14


<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, 2001.

Plan of Operation

        On January 15, 2002,  the Company  obtained an  exclusive,  royalty free
(subject to an early termination or royalty provisions), license for a period of
two years ending on the date which is 3 months after the second  anniversary  of
January 15, 2002.

        The  rights  to use for any and all  purposes  (including  the  right to
sublicense  software to others) were obtained in exchange for the  assumption of
certain obligations  incurred by WebIAm and the issuance of one hundred thousand
(100,000)  shares of Common Stock of WEBiX ("the WEBiX shares") with a valuation
of $20,000.

        The Company introduced the WEBIXTRADER ATS System on July, 02, 2002. The
System is an  Internet-based  trading and order  processing  System for Microcap
Securities,  (also known as OTC Bulletin Board stocks). The launch of the System
should contribute revenues to operations in the third quarter of 2002.

Results of Operations

        The Company had  $891,816 and  $1,536,533  in expenses for the three and
six month  periods  ended June 30, 2002 and  $299,773 and $405,456 for the three
and six months ended June 30,  2001.  For the quarter  ended June 30, 2002,  the
Company earned  revenues of $162,636 from a software  development  project for a
single client and from facilities  management for several clients. The client is
involved in business to consumer e-commerce.  As this is the first year that the
Company has revenue,  no  meaningful  comparison  can be made to prior  periods.
Losses on operations  will continue  until  sufficient  revenues can be achieved
from the various business units of the Company.

Liquidity and Capital Resources

        At June 30, 2002,  the Company had total  current  assets of $83,877 and
total assets of $566,477 as compared to $4,055 current assets and $430,446 total
assets at December 31, 2001. The Company had a net working capital  (deficit) of
($267,602) and ($118,373) at June 30, 2002 and December 31, 2001.

        Net  stockholders'  equity in the Company was and $64,220 as of June 30,
2002 and $308,018 as of December 31, 2001.

        The Company  anticipated the need to raise additional capital before the
end of the second quarter of 2002.  Discussions with the investment banking firm
of Harris,  Hoover & Lewis,  Inc.  resulted  in the  issuance  of an  Investment
Offering Summary for $500,000 8% Subordinated

                                      F-15


<PAGE>



Convertible  Notes of July '04 and  Warrants.  The  offering  was dated June 24,
2002. On July 18, 2002, the offering was terminated.

        The  Company  continues  to  seek  strategic   alternatives,   including
discussions  with  joint  venture  partners  and  investors.   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 its ability to obtain  additional  funding
which will enable the Company to implement  its business  objectives in order to
generate cash flow.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None

ITEM 2.  CHANGES IN SECURITIES

During  the  second  quarter  of 2002,  200,000  shares of Series A  Convertible
Preferred Stock were issued for cash at a $1 per share.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5.  OTHER INFORMATION

None

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



99.1 Certification  Pursuant to 18 U.S.C.  SS 1350, As Adopted Pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002.

                                      F-16


<PAGE>


99.2 Certification  Pursuant to 18 U.S.C.  SS 1350, As Adopted Pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002.

        REPORTS

        The Company filed a Current  Report on June 27, 2002 for Item 7 and 9 to
provide a revised and updated  description  of the business of the Company,  its
proposed  annual  meeting for 2002 and  disclosure of the security  ownership pf
certain beneficial owners and management.

                                   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 August 14, 2002

                            THE X-CHANGE CORPORATION

                                  (Registrant)





DATE: August 14, 2002                      By:  /s/    K. Richard B. Niehoff
     ------------------------------             --------------------------------
                                           K. Richard B. Niehoff
                                           President and Chief Executive Officer
                                          (Principal Executive, Financial and
                                           Accounting Officer)

                                      F-17