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, 2005

   [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE TRANSITION PERIOD FROM ------------ TO ------------.

                        COMMISSION FILE NUMBER 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.)

                100 ALLENTOWN PARKWAY, SUITE 110, ALLEN, TX 75002
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (972) 747-1206
                            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:  AUGUST 12, 2005 25,572,000


      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)
                                                                                June 30,            December 31,
                                                                                  2005                  2004
                                                                           -------------------  --------------------
ASSETS
Current Assets:
<S>                                                                        <C>                  <C>
     Cash                                                                  $            91,453  $              4,902
     Accounts Receivable                                                               146,891                     -
     Salary Advance                                                                      2,030                     -
                                                                           -------------------  --------------------
Total Current Assets                                                                   240,374                 4,902
                                                                           -------------------  --------------------

Fixed Assets:
     Office Equipment                                                                    1,057                     -
     Less Accumulated Depreciation                                                         (53)                    -
                                                                           -------------------  --------------------
Net Fixed Assets                                                                         1,004                     -
                                                                           -------------------  --------------------

Oil & Gas Properties
     Oil & Gas Properties                                                              250,926                36,878
     Less Depletion                                                                     (2,839)                    -
                                                                           -------------------  --------------------
Net Oil & Gas Properties                                                               248,087                36,878
                                                                           -------------------  --------------------

TOTAL ASSETS                                                               $           489,465  $             41,780
                                                                           ===================  ====================
</TABLE>
















                                       F-2

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS
                                   (Continued)

<TABLE>
<CAPTION>

                                                                                (Unaudited)
                                                                                  June 30,         December 31,
                                                                                    2005                2004
                                                                             ------------------- -------------------

LIABILITIES
Current Liabilities:
<S>                                                                          <C>                 <C>
     Accounts Payable and Accrued Liabilities                                $            70,042 $            42,292
     Notes Payable                                                                       203,231                   -
     Due to Shareholder                                                                   25,702                   -
                                                                             ------------------- -------------------
Total Current Liabilities                                                                298,975              42,292
                                                                             ------------------- -------------------

TOTAL LIABILITIES                                                                        298,975              42,292
                                                                             ------------------- -------------------

STOCKHOLDERS' EQUITY (DEFICIT)
     Preferred Stock, Par Value $.001,
       Series A Convertible - 5,000,000 Shares Authorized,
       0 Issued at June 30, 2005 and December 31, 2004                                         -                   -
     Common Stock, Par value $.001, Authorized
       100,000,000 Shares, Issued 14,922,000 and 14,752,000
       at June 30, 2005 and December 31, 2004                                             14,922              14,752
     Paid-In Capital                                                                     714,525             653,283
     Retained Deficit                                                                   (536,688)           (536,688)
     Deficit Accumulated During Development Stage                                         (2,269)           (131,859)
                                                                             ------------------- -------------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                                     190,490                (512)
                                                                             ------------------- -------------------

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)                                                             $           489,465 $            41,780
                                                                             =================== ===================
</TABLE>











                             See accompanying notes

                                       F-3

<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 Six Months Ended        Inception of
                                                          June 30,                           June 30,                Development
                                                   2005              2004              2005             2004            Stage
                                            ------------------ ----------------- ---------------- ---------------- ----------------

<S>                                         <C>                <C>               <C>              <C>              <C>
Revenues                                    $           58,895 $               - $        126,956 $              - $        164,395
Costs of Operations                                     29,694                 -           38,476                -           67,668
                                            ------------------ ----------------- ---------------- ---------------- ----------------

   Net Operating Income                                 29,201                 -           88,480                -           96,727

Expenses
   General & Administrative                             45,715           128,014           55,019          152,074          136,810
                                            ------------------ ----------------- ---------------- ---------------- ----------------

Net Loss from Continuing Operations                    (16,514)         (128,014)          33,461         (152,074)         (40,083)
                                            ------------------ ----------------- ---------------- ---------------- ----------------

Other Income (Expense)
   Interest Expense                                     (1,716)           (1,508)          (3,933)          (1,885)          (3,933)
   Interest Income                                          62                 -               62                -               62
   Sale of Working Interest                            100,000                 -          100,000                -          100,000

Discontinued Operations
   Loss on Sale of AirGate                                   -                 -                -                -          (58,315)
                                            ------------------ ----------------- ---------------- ---------------- ----------------

     Net Income (Loss)                      $           81,832 $        (129,522)$        129,590 $       (153,959)$         (2,269)
                                            ================== ================= ================ ================ ================

Earnings per Share, Basic & Diluted         $             0.01 $          (0.01) $           0.01 $         (0.01)
                                            ================== ================= ================ ================

Weighted Average
Shares Outstanding                                  14,922,000        15,972,010       14,922,000       14,496,848
                                            ================== ================= ================ ================
</TABLE>





                             See accompanying notes

                                       F-4

<PAGE>



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

<TABLE>
<CAPTION>
                                                                                                            Cumulative
                                                                                                               Since
                                                                                                            October 4,
                                                                                                               2000
                                                                        For the Six Months Ended           Inception of
                                                                                June 30                     Development
                                                                 --------------------------------------
                                                                        2005                2004               Stage
                                                                 ------------------  ------------------  -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                              <C>                 <C>                 <C>
Net Income (Loss)                                                $          129,590  $         (153,959) $          (2,269)
Adjustments to reconcile net loss to net cash
   Provided by operating activities:
Depreciation and Depletion                                                    2,892               1,785              2,892
Stock Issued for Services                                                     1,000              68,000              5,150
Net Loss from Discontinued Operations                                             -                   -             58,315
Change in Operating Assets and Liabilities:
(Increase) Decrease in Deposits                                                   -              (2,500)                 -
(Increase) Decrease in Employee Advances                                     (2,030)               (433)            (2,030)
(Increase) Decrease in Accounts Receivable                                 (107,837)                  -           (107,837)
Increase (Decrease) in Accounts Payable                                      27,750                 164             99,137
Increase (Decrease) in Accrued Interest                                       3,933               1,885              3,933
                                                                 ------------------  ------------------  -----------------

Net Cash Used in Operating Activities                                        55,298             (85,058)            57,291
Net Cash Used in Discontinued Activities                                          -                   -              6,685
                                                                 ------------------  ------------------  -----------------

Net Cash Used in Operating Activities                                        55,298             (85,058)            63,976
                                                                 ------------------  ------------------  -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Oil & Gas Property Interest                                                (253,102)                  -           (289,980)
Purchase of Office Equipment                                                 (1,057)             (9,979)            (1,057)
Sale of Office Equipment                                                          -                 950                  -
Purchase of Furniture and Fixtures                                                -              (5,000)                 -
                                                                 ------------------  ------------------  -----------------

Net Cash Provided by Investing Activities                                  (254,159)            (14,029)          (291,037)
                                                                 ------------------  ------------------  -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Loans                                                         200,000                   -            200,000
Proceeds from Shareholder Loan                                               25,000              99,125             25,000
Capital Contributed                                                          60,412                   -             93,514
                                                                 ------------------  ------------------  -----------------

Net Cash Provided by Financing Activities                                   285,412              99,125            318,514
                                                                 ------------------  ------------------  -----------------


Net (Decrease) Increase in Cash                                              86,551                  38             91,453
Cash at Beginning of Period                                                   4,902                   -                  -
                                                                 ------------------  ------------------  -----------------
Cash at End of Period                                            $           91,453  $               38  $          91,453
                                                                 ==================  ==================  =================
</TABLE>


                                       F-5

<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 Six Months Ended           Inception of
                                                                                June 30,                    Development
                                                                 --------------------------------------
                                                                        2005                2004               Stage
                                                                 ------------------  ------------------  -----------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

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

  Franchise and Income Taxes                                     $                -  $                -  $               -

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: None
-----------------------------------------------------------------------
</TABLE>























                             See accompanying notes

                                       F-6

<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  $539,000  for the  period  from  October  4, 2000  (inception  of
development stage) to June 30, 2005.

         The  Company's  general  business  strategy is to acquire  interests in
emerging  opportunities  that the Company  believes  will  generate  significant
revenues and return a profit to shareholders.  In the oil and gas industry,  the
Company  will  continue to evaluate  its  prospects  and  opportunities,  and if
feasible,  these properties will be developed or will be sold at a profit to the
Company.  The continued  operations of the Company and the recoverability of oil
and gas property  acquisition,  exploration and  development  costs is dependent
upon the existence of economically  recoverable  reserves and the ability of the
Company to obtain  financing to complete the development of those reserves,  and
upon future  profitable  production.  To date,  the  Company  has not  generated
significant  revenues from operations and will require  additional funds to meet
its obligation and the costs of its operations. As a result,  significant losses
are anticipated prior to the generation of any revenues. The Company is planning
additional  ongoing  equity  financing by way of private  placements to fund its
obligations and operations.

         The Company's future capital  requirements will depend on many factors,
including  costs of exploration of the  properties,  cash flow from  operations,
costs to complete well  production,  if warranted,  and  competition  and global
market  conditions.  The Company's  anticipated  recurring  operating losses and
growing working capital needs may require that it obtain  additional  capital to
operate its business.  Further,  the Company does not have  sufficient  funds on
hand to complete the exploration of the properties.


                                       F-7

<PAGE>



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

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

         The  Company  will  depend  almost  exclusively  on outside  capital to
complete the exploration  and  development of the oil and gas  properties.  Such
outside  capital  will  include  the sale of  additional  stock and may  include
commercial  borrowing.  There can be no assurance that capital will be available
as necessary to meet these continuing  exploration and development  costs or, if
the capital is  available,  that it will be on terms  acceptable to the Company.
The  issuances of  additional  equity  securities by the Company may result in a
significant  dilution  in the  equity  interests  of its  current  stockholders.
Obtaining  commercial  loans,  assuming  those  loans would be  available,  will
increase the Company's  liabilities and future cash commitments.  If the Company
is unable to obtain financing in the amounts and on terms deemed acceptable, the
business and future success may be adversely affected.

         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.

Interim Reporting

         The  unaudited  financial  statements  as of June 30,  2005 and for the
three and six 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
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


                                       F-8

<PAGE>



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

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

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
the 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 in the Company to Michael Sheriff.

         In June 2004,  the  Company  formed a new  subsidiary,  OIL ID Systems,
Inc., which acquired  thirty-eight wells in East Texas. As of December 31, 2004,
OIL ID Systems, Inc. changed its name to Curado Energy Resources, Inc.

         On  September  30,  2004,  the Company  entered  into a share  purchase
agreement  with  Kolt Oil & Gas,  a Texas  Corporation,  where it  acquired  the
business,  operations  and prospects of Kolt Oil & Gas for  2,500,000  shares of
common stock. Subsequently, the share purchase agreement with Kolt Oil & Gas was
rescinded and the 2,500,000 shares were canceled. On March 11, 2005, the Company
issued  150,000 shares to acquire the Texas  operator's  license for oil and gas
properties of Kolt Oil & Gas.




                                       F-9

<PAGE>



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

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

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. 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 the oil and gas
industry  around  the world is on the rise,  and OIL ID Systems  was  created to
assist AirGATE  Technologies in developing  contacts and capturing  market share
within this growing RFID market niche.  As of December 31, 2004,  OIL ID Systems
changed its name to Curado Energy Resources, Inc.

         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 sold AirGATE to Michael L. Sheriff.

         In  connection  with a share  purchase  agreement  with Kolt Oil & Gas,
because of continued  rising oil and gas demand and prices,  the Company decided
to investigate  opportunities in 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 that do not meet the requirements
of the larger producers and developers.

Principals of Consolidation

         The  consolidated  financial  statements  include the  accounts for The
X-Change Corporation and its wholly owned subsidiaries Kolt Oil & Gas and Curado
Energy  Resources,   Inc.  (Formerly  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.






                                      F-10

<PAGE>



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

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

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.

Oil and Gas Properties

         The Company  follows the full cost method of accounting for its oil and
gas properties. Accordingly, all costs related to the acquisition,  exploration,
development  of oil and gas  reserves,  including  related  overhead  costs  and
related asset retirement  costs,  are  capitalized.  Such costs include land and
lease acquisition  costs,  annual carrying charges of non-producing  properties,
geological and geophysical costs, costs of drilling and equipping productive and
non-productive  wells,  and direct  exploration  salaries and related  benefits.
Proceeds from the disposal of oil and gas properties are recorded as a reduction
of the related  capitalized  costs without  recognition of a gain or loss unless
the  disposal  would  result in a change of 20 percent or more in the  depletion
rate. The Company operates in one cost center, being the United States.

         Depletion and depreciation of the capitalized  costs are computed using
the unit-of-production  method based on the estimated proven reserves of oil and
gas determined by independent consultants.

         Estimated future removal and site  restoration  costs are provided over
the life of proven reserves on a unit-of-production  basis. Costs, which include
the  cost of  production  equipment  removal  and  environmental  clean-up,  are
estimated  each  period  by  management  based on  current  regulations,  costs,
technology and industry  standards.  The charge is included in the provision for
depletion and depreciation and the actual  restoration  expenditures are charged
to the accumulated provision amounts as incurred.

         Total depletion expense for the six months ended June 30, 2005 and 2004
was $2,839 and $0, respectively.

         The Company applies a ceiling test to capitalized  costs to ensure that
such costs do not exceed estimated future net revenues from production of proven
reserves  at year end market  prices  less  future  production,  administrative,
financing,  site  restoration,  and  income  tax costs plus the lower of cost or
estimated  market  value  of  unproved  properties.  If  capitalized  costs  are
determined to exceed  estimated  future net  revenues,  a write-down of carrying
value is charged to depletion in the period.

                                      F-11

<PAGE>



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

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

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.

Income Taxes

         The  Company  follows the  liability  method of  accounting  for income
taxes.  Under this method,  future tax assets and liabilities are recognized for
the future tax  consequences  attributable to differences  between the financial
statement  carrying  amounts  of  existing  assets  and  liabilities  and  their
respective tax balances.  Future tax assets and  liabilities  are measured using
enacted or  substantially  enacted  tax rates  expected  to apply to the taxable
income in the years in which those  differences  are expected to be recovered or
settled.  The effect on future tax  assets  and  liabilities  of a change in tax
rates is  recognized in income in the period that includes the date of enactment
or substantive enactment. As at December 31, 2004, the Company had net operating
loss carryforwards;  however,  due to the uncertainty of realization the Company
has provided a full  valuation  allowance for the deferred tax assets  resulting
from these loss carryforwards.



                                      F-12

<PAGE>



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

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

Earnings (Loss) per Share

         Basic  earnings  (loss) per share has been  computed  by  dividing  the
income (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,  2004,  the  Company  had a  net  operating  loss
carryforward for income tax reporting  purposes of  approximately  $669,000 that
may be offset against  future  taxable income through 2024.  Future tax benefits
which may arise as a result of these  losses and  resource  deductions  have not
been  recognized  in  these  financial  statements,   as  their  realization  is
determined not likely to occur.

NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN

         The Company has just commenced its intended principal operations and as
is common with a development  stage of oil and gas  extraction,  the Company has
had  recurring  losses.  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
current  oil and  gas  production,  additional  equity  funding  and  long  term
financing, which will enable the Company to operate for the coming year.

NOTE 4 - COMMITMENTS

         Through  March  31,  2005,  all  activities  of the  Company  had  been
conducted by corporate officers from either their homes or business offices.  In
April  2005,   the  Company   entered  into  a  lease   agreement  with  AirGATE
Technologies,  Inc. to share office space on a month-to-month basis.  Currently,
there  are no  outstanding  debts  owed by the  company  for  the  use of  these
facilities.






                                      F-13

<PAGE>



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

NOTE 5 - LINE OF CREDIT / NOTE PAYABLE - SHAREHOLDER

         During  January,  2005,  a  shareholder  extended  to  the  Company  an
unsecured line of credit for up to $500,000. The credit line carries interest at
the existing prime rate. As of June 30, 2005, the Company owed $25,702,  against
this  line  of  credit  and is  reported  along  with  accrued  interest  in the
accompanying financial statements as Due to Shareholder.

NOTE 6 - NOTE PAYABLE

         As of  June  30,  2005,  the  Company  received  a short  term  loan of
$200,000,  with interest at 8 percent.  As of June 30, 2005, accrued interest on
this loan was $3,231.

NOTE 7 - 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 June 30, 2005, there are no preferred shares issued.

NOTE 8 - COMMON STOCK TRANSACTIONS

         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.



                                      F-14

<PAGE>



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

NOTE 8 - COMMON STOCK TRANSACTIONS (Continued)

         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.

         On  September  30,  2004,  the Company  entered  into a share  purchase
agreement  with  Kolt Oil & Gas,  a Texas  Corporation,  where it  acquired  the
business,  operations  and prospects of Kolt Oil & Gas for  2,500,000  shares of
common stock. Subsequently, the share purchase agreement with Kolt Oil & Gas was
rescinded and the 2,500,000 shares were canceled. On March 11, 2005, the Company
issued  150,000 shares to acquire the Texas  operator's  license for oil and gas
properties of Kolt Oil & Gas.

         On November 23, 2004,  the Company  issued  1,000,000  shares of common
stock for consulting services. The shares were valued at $0.001 per share.

         As of March 31, 2005,  the Company  issued 100,000 shares of restricted
common stock to an outside investor for $1.

         As of March 31, 2005,  the Company  issued  70,000 shares of restricted
common stock for consulting services. In connection with issuance of the shares,
$1,000 was recorded as consulting expense.

NOTE 9 - OIL AND GAS ACTIVITIES

         Currently, the Company has two wholly-owned subsidiaries, Curado Energy
Resources,  Inc.,  which  presently  owns 55 wells in East  Texas  and which was
formerly known as OIL ID systems, and Kolt Oil & Gas, Inc., which is licensed to
operate oil and gas properties in Texas.

         Currently,  all of Curado's  oil and gas assets are located in the East
Texas  Woodbine  Field,  which covers five  counties in East Texas,  those being
Rusk, Gregg, Smith, Upshur and Cherokee. This field is over 70 years old, having
produced over six billion barrels of oil, with estimated reserves of one billion
barrels remaining.

         For the three and six months ended June 30,  2005,  the Company had net
revenues of $58,895 and $126,956,  respectively, from its proven reserves in the
East Texas property.

         As of June 30, 2005,  $250,926 has been  capitalized in connection with
the exploration of unproven properties.

                                      F-15

<PAGE>



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

NOTE 10 - CONTINGENCIES

         On September  30,  2004,  the Company  entered  into an agreement  with
Michael Sheriff and AirGATE  Technologies,  Inc. whereby 100% of AirGATE's 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 then in development in the automotive, medical
instrument, aerospace and oil exploration services industries.

NOTE 11 - 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.

         On  September  30,  2004,  the Company  entered  into a share  purchase
agreement  with  Kolt Oil & Gas,  a Texas  Corporation,  where it  acquired  the
business,  operations  and prospects of Kolt Oil & Gas for  2,500,000  shares of
common stock. Subsequently, the share purchase agreement with Kolt Oil & Gas was
rescinded and the 2,500,000 shares were canceled. On March 11, 2005, the Company
issued  150,000 shares to acquire the Texas  operator's  license for oil and gas
properties of Kolt Oil & Gas.

                                      F-16

<PAGE>



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

NOTE 12 - SALE OF WORKING INTEREST

         On June 6, 2005,  the Company  gave Flag  Energy  Resources,  Inc.  the
exclusive  rights to market a portion of the Company's  properties in East Texas
for a period of 90 days upon depositing $100,000.

NOTE 13 - SUBSEQUENT EVENTS

         On July 20, 2005, the Company reacquired AirGATE Technologies, Inc. for
10,000,000  restricted  shares  of  common  stock.  See Form 8K  filed  with the
Securities  and Exchange  Commission  dated July 28, 2005 for more  information.
After the AirGATE  acquisition,  the Company issued 650,000 shares of restricted
common stock to consultants  of AirGATE  Technologies,  Inc. In connection  with
issuance of the shares, $130,000 was recorded as consulting expense.

























                                      F-17

<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, 2004.

PLAN OF OPERATION

The Company's  primary focus is to acquire  interests in emerging  opportunities
that the Company believes will generate significant revenues and return a profit
to  shareholders.  In the oil and gas  industry,  the Company  will  continue to
evaluate its prospects and opportunities.  If feasible, these properties will be
developed  or will be sold at a profit to the  Company.  The Company  intends to
utilize its oil and gas contacts to market its AirGATE  developed  technology to
the oil and gas industry where AirGATE already holds a significant contract.

The Company's business model now consists of several key  differentiators  that,
management  feels, will set it apart. The Company's focus is to create long-term
shareholder value by:

- Pursuing intelligent,  opportunistic acquisitions of advanced technology plays
and companies  whose  business plans and  operations  are  complementary  to the
Company's future growth;

- Consolidating redundant functions, such as operations,  billing and accounting
and customer support;

- Partnering  with other  companies that can provide  leverage for the Company's
activities;

-  Joining  industry   organizations  to  highlight  the  Company's   technology
solutions.

Currently  the  Company  has  two  wholly-owned   subsidiaries,   Curado  Energy
Resources,  Inc.,  which  presently  owns 55 wells in East  Texas  and which was
formerly known as OIL ID systems, and Kolt Oil & Gas, Inc., which is licensed to
operate oil and gas properties in Texas.

The Company, through Curado, has as its objective the development of its current
properties through biochemical treatment and well deepening efforts.

Currently,  all of  Curado's  oil and gas assets  are  located in the East Texas
Woodbine  Field,  which  covers five  counties in East Texas,  those being Rusk,
Gregg,  Smith,  Upshur and  Cherokee.  This  field is over 70 years old,  having
produced over six billion barrels of oil, with estimated reserves of one billion
barrels remaining.

In April 2005,  the Company was  contacted by agents of the Royal  Government of
Cambodia  regarding  onshore and offshore  oil and gas research and  exploration
rights in Cambodia.

                                      F-18

<PAGE>



Representatives of the company traveled to Cambodia to evaluate the opportunity,
and plans were made to open a Cambodian office pending approvals.

Based upon the  opportunities  presented  to the Company in  Cambodia,  X-Change
Corporation  has  facilitated a Memorandum of  Understanding  ("MOU") between KD
Power  Group Co.,  Ltd. of the Kingdom of Cambodia  and Boca  Shipping  Ltd.,  a
Bahamian  company for a coal mining  exploration and production  project for the
Ang Long Veng District in Cambodia.  For its part, the X-Change Corporation will
receive a 5% share of the interests of Boca Shipping Ltd.

PARAGONE  BIO-TECHNOLOGY:  Since the  fourth  quarter  of 2004,  Curado has been
evaluating a proprietary process for injecting a microbial bio-tech process into
low and non performing wells. Micro-Tes manufactures the microbial-based product
that is the basis for the proprietary  process.  Curado has gained access to the
microbial  product through a distribution  agreement that Micro-Tes has with the
Robert Barbee,  a director and executive  officer of the Company.  Micro-Tes was
founded in 1991 and manufactures a broad line of microbial-based products. These
products consist of blends of acclimated,  naturally  occurring,  non-pathogenic
microbes.  These microbes offer a safe and economical  alternative to chemicals.
Curado uses the Micro-Tes'  product named PARAGONE,  which solubilizes  paraffin
and asphaltene in formations, well bores, pumps, flow lines, heater treaters and
storage tanks.  The product reduces or eliminates  emulsion,  corrosion,  scale,
hydrogen  sulfide and oil carry over.  PARAGONE  releases  drilling fluid,  frac
gels,  polymers  and soap from the  formation.  It increases  API  gravity,  oil
production, gas production and water injection rates.

The use of PARAGONE allows Curado to focus on  recompletions  and workovers that
would  otherwise  be cost  prohibitive.  In  addition to the  recompletions  and
workovers of existing wells,  Curado will focus on deepening existing wells when
management believes deepening is economically  feasible. The Company is focusing
on enhanced  recovery  technologies that will allow it to maximize the potential
of its current holdings.

MANAGEMENT

CHARLES STIDHAM

He was a private  investor  during  the five  years  preceding  the date of this
report.  He  graduated  from Georgia  Tech  University  in 1964 with a degree in
mechanical  engineering  and from the University of Texas in Austin with a Juris
Doctorate in 1972. Mr. Stidham resigned as Chief Executive  Officer and Chairman
immediately after the AirGATE reacquisition.

MICHAEL SHERIFF

Mr.  Sheriff  joined the Company  immediately  after the  acquisition of AirGATE
Technologies as Chariman and Chief Executive Officer.

Michael  Sheriff,  president and chief executive  officer,  has over thirty-five
years of experience in the computer and telecommunications industry. In 1998 Mr.
Sheriff founded Net Access Exchange, Inc.,

                                      F-19

<PAGE>



dba YPAY. YPAY was a new Internet media network that provided advertisers with a
unique and  compelling  value  proposition  to reach  consumers via the Internet
through use of  broadband-like  rich media over dial-up  connections - the first
broadband over  narrowband  advertising  and  entertainment  network,  providing
TV-like advertising without compromising or interfering with the user's Internet
connection.  YPAY  utilized a patented  message  delivery  system to harness the
power of the Internet with  multi-media and  market-targeting  capabilities  not
available  in any  other  advertising  medium.

In 1995, Mr. Sheriff founded CyberQuest -- a full-service  Internet  development
company -- focusing its efforts on Internet commerce in the business-to-business
marketplaces.  Under Mr. Sheriff's leadership, the company's Internet e-commerce
flagship,  bid4it,  was developed  utilizing a revolutionary new, patent pending
"bid-and-ask"  matching technology.  The site was launched in 1997 as one of the
first commodity  trading Internet  applications.  Mr. Sheriff sold CyberQuest in
October  1998 to a NASD  OTC:BB  listed  company.  He then  served as CEO of the
public  company,  CBQ, Inc., as well as being Chairman of the company's Board of
Directors.

In 1994,  Mr.  Sheriff  founded and developed Good Stuff Cheap (GSC), a first to
market Internet- based retail site. The company was the first to use intelligent
shopping  agents and was featured in Wired  Magazine in December  1994,  GSC was
also featured on the Discovery Channel in December 1996.

Mr.  Sheriff  is  also  the  former  founder,  President  and  CEO of  ActionFax
International,  Inc. Action Fax operates one of the largest public  fax/Internet
kiosk networks in the world with locations in most world airports.

Prior to ActionFax,  Mr Sheriff was the founder and President of First  National
Computer  Corporation,  which pioneered the rental of personal computers.  Under
his direction, First National Computer became one of the largest PC rental firms
in the  United  States.

Mr.  Sheriff has held senior sales,  marketing  and  management  positions  with
National Semiconductor, Northern Telecom, SYCOR, Inc. and SINGER.

DEAN ELLIOTT

Mr.  Elliott  served as the interim  President for the Company during the second
quarter until his  resignation on July 20, 2005.

Mr.  Elliott holds a Bachelor of Arts from the  University of Texas.  Mr. Elliot
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 negotiation 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 porjects, producing oil and gas property acquisition,
rasing necessary capital from private investors,  supervision of pumpers,  field
personnel, administrative staff dealing with entering into contracts and

                                      F-20

<PAGE>



all other aspects of operations from prospects to pipeline.

ROBERT BARBEE

Mr. Barbee holds a Business  Degree from Kilgore  College,  which he obtained in
1992.  He has been  actively  involved in the oil and gas business in East Texas
since 1989. Mr. Barbee has been Vice- President of Oil Patch Pipe & Supply since
2000. This entity is an independent  oil field supply store,  which has garnered
the  distributorship  for  micro  chemical  applications  to down hole well bore
repair.  Mr.  Barbee acted as President of S&B  Resources  from 1991 until 2002,
when he directed the sale of all its assets. S&B was a small, privately-held oil
and gas company which owned and operated its own  production.  From 1992 through
1994 he  directed  LAZ  Financial,  a Russian  company  involved  in oil and gas
natural  resource.  From 1995 through 1998 Mr. Barbee was Operations  Management
for 4-S Operating,  one of the top ten operators in East Texas, where he oversaw
the production of approximately  15,000 barrels of oil monthly.  Mr. Barbee also
worked with Gregg  Industrial  Insulators,  Inc.,  where he  increased  sales by
approximately  $5,000,000  annually.  Mr.  Barbee  also  serves  on the Board of
Directors for Merritt Tool in Kilgore,  Texas. This company is a privately owned
machine tool shop,  which  focuses  principally  on the aviation and oil and gas
industries.

SCOTT R. THOMPSON

Mr.  Thompson joined the Company in the final quarter of 2004. He graduated from
the University of Denver, Colorado, in 1985 with a Bachelor of Science Degree in
Accounting,  receiving his CPA in 1986 while working for Ernst & Whinney, a "Big
8" accounting  firm. His clients at Ernst & Whinney included  multinational  and
oil and gas clients.  Mr.  Thompson has focused during the past 12 years on real
estate  sales and  development  and since 2000 has been a part owner and manager
for a capital  management  company.  He holds Series 7, 55, 63 and 65 securities
licenses.

MICHAEL P. MCINERNEY

Mr.  McInerney  joined the  Company  on  October  21,  2004 as a  consultant  to
coordinate  corporate  development.  He brings over 30 years  experience  to the
Company.  His past  experience  includes  executive  positions with two New York
Stock Exchange  listed  companies,  the oversight of corporate  development  and
investor relations with these companies and serving on the board of directors of
Canadian and European  subsidiaries of U.S. based international energy concerns.
Mr.  McInerney  has conducted  meetings,  developed  presentation  materials and
coordinated field trips to the Far East, U.S., Canada,  Europe and South America
for  institutional  investors  and has  been  successful  in  arranging  private
investor financing.

Mr.  McInerney  holds a  Bachelors  of  Business  Arts in  Accounting  from  the
University  of Michigan and is a member of the  American  Institute of Certified
Public  Accountants.  His  credentials  include past  President of the Petroleum
Investor Relations Association and of the Institute of Management Accountants.


                                      F-21

<PAGE>



WILLIAM  (BILL) BOTTO

Mr. Botto holds degrees in both Biology,  with an emphasis in microbiology,  and
Petroleum Geology. He 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  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., whose focus is designing  biological  products for
enhancing   oil   production   (Microbial   Enhanced  Oil   Recovery,   "MEOR"),
bioremediation,  and related products.  He is currently involved in oil recovery
projects  in the USA,  China,  Russia,  and the  Athabasca  TAR sands in western
Canada.  Mr. Botto is a  consultant  to the Company and is provides the Paragone
technology  to its  development

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

CURADO ENERGY RESOURCES, INC.

In June 2004, the Company formed a new subsidiary, Curado Energy Resources, Inc.
(formerly OIL ID Systems, Inc.). Curado Energy Resources, 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.

RESULTS OF OPERATIONS

The Company had $45,715 and $128,014 in general and administrative  expenses for
the three  month ended June 30, 2005 and 2004,  respectively.  For the  quarters
ended June 30,  2005 and 2004,  the  Company  had  $58,895  and $0 in  revenues,
respectively.

LIQUIDITY AND CAPITAL RESOURCES

At June 30,  2005,  the Company had total  current  assets of $240,374 and total
assets of $489,465 as compared to $4,902 current assets and $41,780 total assets
at  December  31,  2004.  The Company had a net  working  capital  (deficit)  of
($58,601) at June 30, 2005 and ($37,390) at December 31, 2004.

Net  stockholders'  equity  (deficit) in the Company was and $190,490 as of June
30,  2005 and  ($512) at  December  31,  2004.

The Company continues to seek strategic alternatives, including discussions with
joint venture partners and investors.  During January 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.

                                      F-22

<PAGE>



ITEM 3.  CONTROLS AND PROCEDURES

         The Company's Chief Executive  Officer and Chief Financial  Officer are
responsible for establishing and maintaining  disclosure controls and procedures
for the Company.

         (a) Evaluation of Disclosure Controls and Procedures

         As of the end of the period covered by this report, the Company carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's management, including the Company's President, of the effectiveness of
the design and operation of the  Company's  disclosure  controls and  procedures
pursuant to Rule 13a-15 under the  Securities  Exchange Act of 1934,  as amended
(the  "Exchange  Act").  Based  upon the  evaluation,  the  Company's  President
concluded that, as of the end of the period, the Company's  disclosure  controls
and  procedures  were effective in timely  alerting him to material  information
relating to the Company  required to be included in the reports that the Company
files and submits pursuant to the Exchange Act.

         (b) Changes in Internal Controls

         Based on this evaluation as of June 30, 2005, there were no significant
changes in the Company's  internal  controls over financial  reporting or in any
other areas that could  significantly  affect the  Company's  internal  controls
subsequent to the date of his most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
None
ITEM 2.  CHANGES IN SECURITIES
None
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5.  OTHER INFORMATION
None


                                      F-23

<PAGE>



ITEM 6.            EXHIBITS AND REPORTS ON FORM 8-K

Exhibit No.                                 Exhibit Name


2.1      Plan of Merger,  incorporated  by reference to Exhibit 10.1 to Form 8-K
         dated January 30, 2002 - Previously Filed.

3.1      Articles of Incorporation - Previously Filed.

3.2      Certificate  of Amendment to Articles of  Incorporation  of  Registrant
         filed with the Secretary of State of the State of Nevada on January 14,
         2002 - Previously Filed.

3.3      By-Laws - Previously Filed.

4.1      Specimen of Common Stock Certificate - Previously Filed.

4.3      Form of Warrant Agreement,  previously filed, incorporated by reference
         to Exhibit 10.2 to Form 8-K dated January 30, 2002 - Previously Filed.

10.1     License  Agreement  dated as of June 20, 2001 between  WebIAm,  Inc. as
         licensor, and WEBiX Inc. (the predecessor of the Company), as licensee-
         Previously Filed.

10.2     Amendment  to  License  Agreement  dated  as  of  January  15,  2002  -
         Previously Filed.

10.3     Form of Lock-Up Agreement,  incorporated by reference to Exhibit 4.1 to
         Form 8-K dated January 30, 2002 - Previously Filed.

10.4     Securities Repurchase Agreement - Previously Filed.

21       List of subsidiaries - None

31.1*    Certification  of  Principal  Executive  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 302 of the  Sarbanes-Oxley
         Act of 2002.

31.2*    Certification  of  Principal  Financial  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
         Act of 2002.

32.1*    Certification  of  Principal  Executive  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 302 of the  Sarbanes-Oxley
         Act of 2002.

32.2*    Certification  of  Principal  Financial  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
         Act of 2002.

* Filed herewith.

Reports on Form 8-K filed in the second quarter of 2005:

         On July 20, 2005, The X-Change Corporation acquired all the outstanding
shares of AirGATE  Technologies,  Inc., pursuant to the Stock Purchase Agreement
between Michael L. Sheriff and the Company.  This transaction of detailed in the
8K filing dated July 27, 2005 and filed July 28, 2005.








                                      F-24

<PAGE>



                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                            THE X-CHANGE CORPORATION
                                  (Registrant)




DATE: August 15, 2005                  By:/s/ Michael L. Sheriff
                                       -------------------------
                                       Michael L. Sheriff,
                                       Chief Executive Officer
                                       (Principal Executive Officer)



DATE: August 15, 2005                  By:/s/ Scott R. Thompson
                                       ------------------------
                                       Scott R. Thompson,
                                       Chief Financial Officer
                                       (Principal Financial Officer)




























                                      F-25