-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GNeynnnGDeol62Y7/xdOVNoYwFae7Ev8o+fNdSsEdVbVAXqyjWR5UwlOgJIb3c44 6wZvSKy1HaCDGhiUNi6ZFw== 0000939802-04-000251.txt : 20040513 0000939802-04-000251.hdr.sgml : 20040513 20040513132540 ACCESSION NUMBER: 0000939802-04-000251 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: X-CHANGE CORP CENTRAL INDEX KEY: 0000054424 STANDARD INDUSTRIAL CLASSIFICATION: MACHINE TOOLS, METAL CUTTING TYPES [3541] IRS NUMBER: 431594165 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 002-41703 FILM NUMBER: 04802144 BUSINESS ADDRESS: STREET 1: 36 W. 44TH STREET, SUITE 1209 CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 646-728-7023 MAIL ADDRESS: STREET 1: 36 W. 44TH STREET, SUITE 1209 STREET 2: , CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: DIVERSIFIED TECHNOLOGIES GROUP INC DATE OF NAME CHANGE: 20010330 FORMER COMPANY: FORMER CONFORMED NAME: CASSCO CAPITAL CORP DATE OF NAME CHANGE: 19940804 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL K C JAKES BBQ & GRILL INC DATE OF NAME CHANGE: 19940627 10QSB 1 form10qsb033104.txt 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 March 31, 2004 [ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ------------ to ------------. Commission file number 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) 390-0750 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: May 11, 2004 17,017,000 Transitional Small Business Disclosure Format (check one). Yes ; No X F-1 PART I Item 1. Financial Statements THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED BALANCE SHEETS
(Unaudited) March 31, December 31, 2004 2003 ------------------- -------------------- ASSETS Current Assets: Cash $ 14,294 $ - Deposits 2,500 - Employee Advances 200 - ------------------- -------------------- Total Current Assets 16,994 - ------------------- -------------------- Fixed Assets: Office Equipment 4,762 - Furniture and Fixtures 14,000 - Less: Accumulated Depreciation (772) - ------------------- -------------------- Net Fixed Assets 17,990 - ------------------- -------------------- TOTAL ASSETS $ 34,984 $ - =================== ====================
F-2 THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited) March 31, December 31, 2004 2003 ------------------- -------------------- LIABILITIES Current Liabilities: Accounts Payable $ 970 $ 926 ------------------- -------------------- Total Current Liabilities 970 926 ------------------- -------------------- Non-Current Liabilities: Shareholder Loans 50,377 - ------------------- -------------------- Total Non-Current Liabilities 50,377 - ------------------- -------------------- TOTAL LIABILITIES 51,347 926 ------------------- -------------------- STOCKHOLDERS' EQUITY (DEFICIT) Preferred Stock, Par Value $.001, Series A Convertible - 5,000,000 Shares Authorized, 0 Issued at March 31, 2004 and December 31, 2003 - - Common Stock, Par value $.001, Authorized 100,000,000 Shares, Issued 13,002,000 at March 31, 2004 and December 31, 2003 13,002 13,002 Common Stock to be Issued, 15,000 and 0 15 - Paid-In Capital 589,781 580,796 Retained Deficit (536,688) (536,688) Deficit Accumulated During Development Stage (82,473) (58,036) ------------------- -------------------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (16,363) (926) ------------------- -------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 34,984 $ - =================== ====================
See accompanying notes F-3 THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Cumulative Since October 4, 2000 For the Three Months Ended Inception of March 31, Development 2004 2003 Stage ------------------- ------------------ ----------------- Revenues $ - $ - $ - Expenses: General & Administrative 24,060 625 82,096 ------------------- ------------------ ----------------- Operating Loss (24,060) (625) (82,096) ------------------- ------------------ ----------------- Other Income (Expense): Interest (377) - (377) ------------------- ------------------ ----------------- Net Income (Loss) $ (24,437) $ (625) $ (82,473) =================== ================== ================= Earnings per Share, Basic & Diluted $ - $ - =================== ================== Weighted Average Shares Outstanding 13,002,000 22,540,000 =================== ==================
See accompanying notes F-4 THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Cumulative Since October 4, 2000 For the Three Months Ended Inception of March 31, Development -------------------------------------- 2004 2003 Stage ------------------ ------------------ ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: ------------------ ------------------ ----------------- Net Income (Loss) $ (24,437) $ (625) $ (82,473) Adjustments to reconcile net loss to net cash Provided by operating activities: Depreciation 772 - 772 Change in Operating Assets and Liabilities: (Increase) Decrease in Deposits (2,500) - (2,500) (Increase) Decrease in Employee Advances (200) - (200) Increase (Decrease) in Accounts Payable 44 - 30,065 Increase (Decrease) in Accrued Interest 377 - 377 ------------------ ------------------ ----------------- Net Cash Used in Operating Activities (25,944) (625) (53,959) ------------------ ------------------ ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Office Equipment (4,762) - (4,762) Purchase of Furniture and Fixtures (5,000) - (5,000) ------------------ ------------------ ----------------- Net Cash Provided by Investing Activities (9,762) - (9,762) ------------------ ------------------ ----------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Shareholder Loan 50,000 - 50,000 Capital Contributed - 625 28,015 ------------------ ------------------ ----------------- Net Cash Provided by Financing Activities 50,000 625 78,015 ------------------ ------------------ ----------------- Net (Decrease) Increase in Cash 14,294 - 14,294 Cash at Beginning of Period - - - ------------------ ------------------ ----------------- Cash at End of Period $ 14,294 $ -$ 14,294 ================== ================== ================= F-5
THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued)
Cumulative Since October 4, 2000 For the Three Months Ended Inception of March 31, Development -------------------------------------- 2004 2003 Stage ------------------ ------------------ ----------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ - $ - $ - Franchise and income taxes $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: On March 15, 2004, the Company acquired furniture and fixtures totaling $9,000 for 15,000 shares of common stock. See accompanying notes F-6 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 $83,000 for the period from October 4, 2000 (inception of development stage) to March 31, 2004, has a liquidity problem, and requires additional financing in order to finance its business activities on an ongoing basis. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses. The Company's future capital requirements will depend on numerous factors including, but not limited to its development, acquisition and marketing of leading-edge wireless internet/networking technologies, principally RFID ("radio frequency identification"). These financial statements do not reflect adjustments that would be necessary if the Company were unable to continue as a "going concern". While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the "going concern" assumption used in preparing these financial statements, there can be no assurance that these actions will be successful. If the Company were unable to continue as a "going concern", then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported expenses, and the balance sheet classifications used. F-7 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Interim Reporting The unaudited financial statements as of March 31, 2004 and for the three 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 months. Operating results for interim periods are not necessarily indicative of the results which can be expected for full years. Organization and Basis of Presentation The Company was incorporated under the laws of the State of Delaware on February 5, 1969 as Diversified Technologies Group, Inc., the Company reincorporated and changed its domicile to the State of Nevada on October 4, 2000. The Company on December 1, 1999, entered into an agreement (Reorganization Agreement) to acquire all of the outstanding capital stock of S&J (Chatteris) Holdings Limited, a United Kingdom corporation (S&J Holdings). Pursuant to the Reorganization Agreement, the Company agreed to acquire all of the outstanding capital stock of S&J in exchange for shares of Common Stock. The Reorganization Agreement required S&J Holdings to perform certain conditions, including the delivery of audited financial statements. These conditions had not been fulfilled by February 14, 2000; therefore, the agreement was rescinded and deemed to have been void and of no effect from the beginning as if the acquisition had not occurred. All shares issued in the acquisition were returned to treasury. The Company also attempted two acquisitions in 2000, neither of which were able to deliver the required financial statements. The first was rescinded and the second was not consummated. In June 2001, the Company entered into a reorganization agreement that was later rescinded for failure to provide adequate compliance with the representations, warranties and covenants of the agreement. In July 2001, the Company changed its name to The X-Change Corporation. On January 15, 2002, the Company merged with WEBiX, Inc. This merger resulted in the Company acquiring the business and operations of WEBiX, in exchange for the issuance by the Company of a controlling interest in its shares to the former shareholders of WEBiX. On March 13, 2003, the Company rescinded in agreement with WEBiX. and reentered the development stage. On February 9, 2004, the Company formed a wholly owned subsidiary, Air Gate Technologies, Inc. F-8 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 The Company has no products or services as of March 31, 2004. On February 9, 2004, the Company formed a wholly owned subsidiary, Air Gate Technologies, Inc. ("Air Gate"), for the purpose of engaging in the development and acquisition of leading-edge wireless internet/networking technologies, principally RFID ("radio frequency identification"). Principals of Consolidation The consolidated financial statements include the accounts for The X-Change Corporation and its wholly owned subsidiary AirGate Technologies, 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. 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. Depreciation Fixed assets are stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Asset Rate - ------------------------------------------------ ----------------- Office equipment 5 years Furniture and Fixtures 5 years Maintenance and repairs are charged to operations; betterments are capitalized. The cost of property sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the property and related accumulated depreciation accounts, and any resulting gain or loss is credited or charged to income. F-9 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. Earnings (Loss) per Share Basic loss per share has been computed by dividing the loss for the year applicable to the common stockholders by the weighted average number of common shares outstanding during the years. The effects of common stock equivalents are anti-dilutive and thus are not considered. NOTE 2 - INCOME TAXES As of December 31, 2003, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $594,123 that may be offset against future taxable income through 2021. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carryforwards will expire unused. Accordingly, the potential tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount. F-10 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN The Company has not begun principal operations and as is common with a development stage company, the Company has had recurring losses during its development stage. Continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to be successful in its planned activity, and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding and long term financing, which will enable the Company to operate for the coming year. NOTE 4 - COMMITMENTS On March 2, 2004, the Company entered into a lease for office space. The rental charges are approximately $2,500 per month commencing March 1, 2004. The lease expires August 31, 2004. NOTE 5 - PREFERRED STOCK The Company has authorized a total of 10,000,000 shares of Preferred Stock. Series A Convertible Preferred Stock is the initial series of Preferred Stock. This series shall consist of 5,000,000 shares with a par value of $.001. The Corporation is under no obligation to pay dividends or to redeem the Series A Convertible Preferred Stock. This series of stock is convertible into 10 shares of Common Stock at the option of the shareholder or upon automatic conversion. In the event of any liquidation, dissolution or winding-up of the Corporation, the holders of outstanding shares of Series A Preferred shall be entitled to be paid out of the assets of the Corporation available for distribution to shareholders, before any payment shall be made to or set aside for holders of the Common Stock, at an amount of $1 per share. As of September 30, 2003, there are no preferred shares issued. NOTE 6 - STOCK TRANSACTIONS On December 31, 2003, certain shareholders contributed back to capital. On March 15, 2004, the Company acquired furniture and fixtures totaling $9,000 for 15,000 shares of common stock. As of March 31, 2004, the Company has not issued these shares. F-11 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 7 - STOCK OPTIONS On January 6, 2004, the Company granted its President Michael Sheriff, an option to purchase up to 12,000,000 shares of Common Stock at the purchase price of $0.05 per share. The options are exercisable beginning after March 1, 2004 and on or before March 31, 2009. No compensation recorded because the exercise price was equal to the market price on the day of the grant. NOTE 8 - MERGER/ACQUISITION On January 15, 2002, the Company and its newly created wholly owned subsidiary X-Change Technologies Corp, merged with WEBiX, Inc. (a Florida Corporation). As a result, the Company acquired the business and operations of WEBiX, in exchange for the issuance of a controlling interest in The X-Change Corporations' shares to the former shareholders of WEBiX. Under the Plan of Merger, 24,000,000 shares of Common Stock, 4,000,000 shares of Series A Convertible Preferred Stock (convertible into 40,000,000 shares of Common Stock) and 40,000,000 warrants were issued. In addition, certain existing shareholders of the Company surrendered approximately 9,500,000 shares of Common Stock to treasury. In connection with this merger, the par value of the Series A Convertible Preferred Stock changed from $.01 to $.001. On March 13, 2003, the Company rescinded its agreement with X-Change Technologies. The rescission, essentially, resulted in the return of all X-Change Corporation's assets in exchange for the surrender of all securities held by the former X-Change Technologies shareholders in the Company and the assumption by X-Change Technologies Corp. of all the Company's debt immediately prior to closing. The rescission effected a change in control over the business, policies and affairs of the Company from the X-Change shareholders to those shareholders holding securities in the Company prior to January 15, 2002. As a result, 15,062,000 shares of common stock and 5,000,000 shares of preferred stock were returned to treasury and the Company now has 22,540,000 shares of common stock, which was the amount outstanding immediately prior to closing of the X- Change Technologies Corp. acquisition on January 15, 2002. All lock-up agreements pertaining to these shares were released effective with the closing. NOTE 9 - SUBSEQUENT EVENTS On 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 common stock. F-12 Item 2. Management's Discussion and Analysis or Plan of Operation This discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's annual report on Form 10-KSB for the year ended December 31, 2003. Plan of Operation Airgate Technologies is a development stage company specializing in wireless technologies. The company designs and develops applications utilized in RFID ("radio frequency identification") deployments. Airgate delivers RFID solutions in selected vertical markets built around a data management and integration strategy. This strategy is designed to ensure rapid market penetration and maximum return on investment. The X-Change Corporation's business model consists of several key differentiators that, management feels, will set it apart from its competition. The Company's focus is to create long-term shareholder value by: (1) Pursuing intelligent, opportunistic acquisitions of other RFID opportunities whose business plans and operations are complementary; (2) Consolidating redundant functions, such as network operations, billing and accounting and customer support; standardizing on technology and selected vendors; (3) Partnering with RFID solution providers, both hardware and software; (4) Partnering with industry organizations, highlighting AirGate's wireless RFID solutions; and (5) Building a recognizable brand identity for its Matrix Analytic Engines. The Smart Label, also known as an RFID tag, is an evolving auto-identification technology that is quickly being adopted by suppliers of all sizes. Wal-Mart, the U.S. Department of Defense and Target have mandated that suppliers employ RFID tags for their supply chain. RFID promises vast benefits, such as increased security and theft protection, reduced labor costs, better supply chain visibility and improved product availability and brand loyalty. Because of current RFID mandates from diverse sources, such as retailer Wal-Mart, the Department of Defense, and the expected surge of RFID deployments, a process to ingest huge amounts of data, understand the data, present the data and detect non-compliance is required in the real-time. It is AirGate's intent to create a core network appliance, a 'matrix analytic engine,' that can be customized for the unique requirements of various vertical industries, retail, manufacturing, health, etc. AirGate will rely upon its extensive database and telecommunication competencies, plus its offshore capability to provide unparalleled services and capabilities to analyze, interpret and manage complex data, such as found in RFID. Tornado, a core component of the Matrix Analytics Engine, is .Net enabled and, in production, is faster and offers more functionality than comparable products. A new feature, J2EE, will give Tornado a cross platform presence, and provides customers a migration path to or from Unix environments. Tornado is currently installed in over 1,200 accounts worldwide. AirGate Technologies holds an exclusive license to Tornado for incorporation into Matrix Analytics for RFID implementations. The Company believes that its Matrix Analytic Engine places it ahead of its F-13 competitors and is unique in addressing the complexities of reader interface and data management in an environment with unsettled standards and evolving technology. AirGate has assembled a quality team to execute its business plan. Our principals have been providing bar code printing solutions to supply chain and logistic operations. Formerly, an IBM Business Partner focused on the IBM 4400 Thermal Printer, our principals have designed, sold and installed thermal printer bar code solutions at Standard Motor Products (Four Seasons division), Anderson Merchandisers, By-Design Importers, Farmers Cotton, Guide Corporation and Lion Vallen (Department of the Army). Airgate Technologies' engineers were previously employed directly in telecom and wireless or as outside consultant/contractors, and have interacted on a number of development projects. Their experience includes network integration and control systems, VoIP, database development and major application development in Windows and Unix environments. Our engineers have developed and deployed large-scale network management systems involving complex hardware, distributed nodes and simultaneous real-time events emanating from various data sources, including devices, user interactions and alarms. This involved auto-discovery of IP-addressed devices and high-level presentation of the data through a GUI interface to users. Since the late 90's, our principal engineers have been providing services and solutions to companies such as Lucent, Nortel, WorldCom and Alcatel. Management Michael Sheriff Michael Sheriff has over twenty-five years of experience in the computer and telecommunications industry. In 1998 Mr. Sheriff founded Net Access Exchange, Inc., 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. YPAY utilized a patented message delivery system that supports true 1:1 targeting and allows local businesses, not just large multinational advertisers, to harness the power of the Internet with multi-media and market-targeting capabilities not available in any other advertising medium. YPAY was able to eliminate the problems associated with traditional web site, browser-based advertising. In 1995, Mr. Sheriff founded CyberQuest -- a full-service Internet development company -- focusing its efforts on Internet commerce in the business-to-consumer and business-to-business marketplaces. The company also developed, implemented and maintained creative business Web sites, Intranets and databases for client companies. Under Mr. Sheriff's leadership, the company's Internet e- commerce flagship, bid4it, as well as its other e-commerce sites, were developed to bring shopping directly into customers' homes and offices utilizing a revolutionary new "bid-and-ask" matching technology. 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. F-14 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 Action Fax 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. Frank Kwong Originally from Hong Kong, Frank Kwong immigrated to the U.S as a teenager. Mr. Kwong has had a life-long interest in computers, system design and program development, both as a user and hobbyist. He achieved U.S. citizenship and was educated as an engineer at the University of Minnesota. In 1976 he began his career with the Donaldson Corporation as an industrial engineer. The Econotherm Corporation recruited Mr. Kwong in 1977. He was design engineer for the company's heat exchanger program. His responsibility included management of the FORTRAN- based computer design programs in an online time-share environment. Mr. Kwong joined the Cabot Corporation in the alloy products fabrication department as design engineer in 1978. His primary responsibility was ASME coded design. He obtained his Professional Engineer license in 1979 and was promoted to Engineering Manager. In 1982, Mr. Kwong was employed by General Motors' Delco division as project leader in semiconductor equipment design. He was the system manager for APPLICON CAD, a leading edge cad/cam development system. During this time, Mr. Kwong formed Computer Accessory Technology, which sold various TRS-80 products. The company was formed and operated with the permission of General Motors. Mr. Kwong served as a staff engineer for GM in Detroit, MI. in 1984, where he began development of cutting-edge computer applications in image processing. Based upon needs he saw at GM, Mr. Kwong began development of ASP-db and took early retirement from GM in 1997. He formed FK & Associates and USIntertech, Inc. to market ASP-db, which was launched in February 1998. USIntertech is a technology service company maintaining a faculty of experienced information F-15 technology professionals who deliver results through technology integration services. The Company is a provider of efficient database solutions. With an extensive technology background involving a number of Fortune 100 telecommunications and manufacturing companies, USIntertech offers unrivaled and deliverable solutions. Its newest product, Tornado, a .Net compatible software environment, is installed in over 1,200 companies. Frank Kwong received his BSc in Mechanical Engineering in 1974, and his MSc in 1976 from the University of Minnesota. He resides with his family in Plano, Texas. Ivan Chow Ivan Chow has developed and implemented cutting edge software systems since 1990. In 1996, Mr. Chow founded a company, which was called IP Communications, and developed Voice IP gateway over the Internet. As the company's chief technical officer, he directed the company to develop and file two patents on two technical procedures. Besides technical details, Mr. Chow also managed the venture in business and technical process integration. In 1998, IP Communications was sold to a then privately-held company called Ramp Networks, a Delaware corporation. The acquisition increased Ramp Networks' asset value. After months of integration of IP Communications' VoIP technology, Ramp Networks developed several VoIP related products, including Voice over ISDN and Voice over DSL. Ramp Networks went on to an IPO in 1999 and was acquired by Nokia in 2000. Before IP Communications, Mr. Chow worked for Sprint beginning in 1994 and developed a middleware system called Distributed Computing Architecture (DCA). This middleware system, DCA, is still being used today within Sprint's IT back-office, connecting Sprint's PCS and Sprint's Long Distance Division's ordering systems. DCA shields the enterprise from different standards and systems. It allows distributed transactions to go across heterogeneous systems - -- MVS, AIX, HP-UX, Solaris and Windows-based systems. After earning his MS degree in physics, Mr. Chow started working in 1990 in a world-class organization called SuperConducting Super Collider. In 1993, he developed a Yahoo!-like search engine within the organization only few months after he was introduced to the WWW protocol in a seminar at Fermi Labs by its creator, Tim Berners-Lee. Together with the physicists, Ivan developed a real-time data collection system, processing data of petabyte range. The team has a mix of financial, technical, network, and wireless backgrounds as well as a strong emphasis on operations and marketing with such companies as Northern Telecom, CyberQuest, Sprint, MCI, ActionFax International, Inc., and Genuity. All are seasoned entrepreneurs. o Seasoned Management Team o Experienced Development Credentials o Wireless & Telecom Background o Hardware & Software Implementation o Internet Pedigrees from 1993 o Start-up Entrepreneurs F-16 Agents AirGate Technologies has signed the following agents to represent it for RFID projects: First Choice Corporation - Europe Ky Lan L.L.C. - VietNam Significant Contracts Vung Tau Commercial Port - AirGate Technologies is the exclusive supplier of RFID (container tracking) to Vung Tau Commercial Port, Ho Chi Minh City, VietNam. The Company will begin implementation in August 2004. Four Seasons, division of Standard Motor Products - AirGate Technologies is conducting a pilot study of RFID tagging of A/C compressors for inventory control, quality control and accurate shipping to customers. Partnerships AirGate Technologies has established VAR and RFID integrator agreements with the following RFID manufacturers: Printronix -- Printronix, known for turning printers into business solutions, has developed an RFID product offering that will help users create and deploy RFID technology applications within their own environments. www.printronix.com. IPico, Inc. -- iPico creates, develops and commercialises intellectual property for the identification and authentication markets providing RFID solutions to optimise the management of goods and people within the logistic supply chain. iPico's products solve authentication and identification problems where conventional technologies, like barcodes, are inappropriate, but it remains important to have effective traceability. iPico's technology is especially relevant where re-usability or compliance requirements exist in areas like border control, health and safety and bio-security. www.ipico.co.za Results of Operations The Company had $24,060 and $625 in general and administrative expenses for the three month periods ended March 31, 2004 and 2003, respectively. For the quarters ended March 31, 2004 and 2003, the Company had no revenues. Losses on operations will continue until sufficient revenues can be achieved from the various business units of the Company. Liquidity and Capital Resources At March 31, 2004, the Company had total current assets of $16,994 and total assets of $34,984 as compared to $0 current assets and $0 total assets at December 31, 2003. The Company had a net working capital (deficit) of $16,024 at March 31, 2004 and ($926) at December 31, 2003. Net stockholders' equity (deficit) in the Company was and ($16,363) as of March 31, 2004 F-17 and ($926) at December 31, 2003. The Company continues to seek strategic alternatives, including discussions with joint venture partners and investors. On May 9, 2004, the Company signed a revolving line of credit promissory note for $500,000 with certain shareholders. The accompanying quarterly financial statements have been prepared assuming the Company will continue as a going concern. The Company's ability to continue as a going concern, however, is dependent upon the Company's ability to implement its business objectives in order to generate cash flow. Item 3. Controls and Procedures The Company's Chief Executive Officer and Chief Financial Officer have concluded, based on an evaluation conducted within 90 days prior to the filing date of this Quarterly Report on Form 10-QSB, that the Company's disclosure controls and procedures have functioned effectively so as to provide those officers the information necessary whether: (i) this Quarterly Report on Form 10-QSB contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report on Form 10-QSB, and (ii) the financial statements, and other financial information included in this Quarterly Report on Form 10-QSB, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Quarterly Report on Form 10-QSB. There have been no significant changes in the Company's internal controls or in other factors since the date of the Chief Executive Officer's and Chief Financial Officer's evaluation that could significantly affect these internal controls, including any corrective actions with regards to significant deficiencies and material weaknesses. PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None F-18 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 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Reports On February 13, 2004, the Company filed a current report under Item 1 to announce the creation of its wholly owned subsidiary AirGate Technologies, Inc. and the engagement of Michael Sheriff as the Company's new Chairman of the Board, President, CEO and Treasurer. F-19 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 May 12, 2004 THE X-CHANGE CORPORATION (Registrant) DATE: May 12, 2004 By:/s/ Michael Sheriff ----------------------------------- Michael Sheriff, President, Chief Executive Officer , Treasurer and Chairman (Principal Executive and Financial Officer) F-20 EX-31 2 form10qsb033104ex31.txt Exhibit 31.1 Section 302 Certifications I, Michael Sheriff, certify that: 1. I have reviewed this quarterly report on form 10-QSB of The X-Change Corporation, 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in exchange act rules 13a-14 and 15d-14 for the registrant and have: a) designed such disclosure controls and proceduresto ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal control which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 12, 2004 /s/ Michael Sheriff - ---------------------------------- Michael Sheriff, President, Chief Executive Officer , Treasurer and Chairman (Principal Executive and Financial Officer) EX-32 3 form10qsb033104ex32.txt Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of The X-Change Corporation on Form 10-QSB for the period ending March 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael Sheriff, President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Michael Sheriff - ---------------------------------- Michael Sheriff, President, Chief Executive Officer , Treasurer and Chairman (Principal Executive and Financial Officer) May 12, 2004 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----