-----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, DgLliiGj//o2fnHXjI9u9dWIm3pqE2p85O01RCWzUGCHCw0yI6+NOev+yBI4ifCE nSaWRa7KTlVUVL3Vp4yR6Q== 0000939802-04-001136.txt : 20041116 0000939802-04-001136.hdr.sgml : 20041116 20041116154721 ACCESSION NUMBER: 0000939802-04-001136 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040930 FILED AS OF DATE: 20041116 DATE AS OF CHANGE: 20041116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: X-CHANGE CORP CENTRAL INDEX KEY: 0000054424 STANDARD INDUSTRIAL CLASSIFICATION: MACHINE TOOLS, METAL CUTTING TYPES [3541] IRS NUMBER: 900156146 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 002-41703 FILM NUMBER: 041149551 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 form10qsb093004.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 SEPTEMBER 30, 2004 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ------------ TO ------------. COMMISSION FILE NUMBER 002-41703 THE X-CHANGE CORPORATION (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) NEVADA 90-0156146 - -------------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 2305 CEDAR SPRINGS, SUITE 275 DALLAS, TX 75205 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (972) 747-0051 ISSUER'S TELEPHONE NUMBER 100 ALLENTOWN PARKWAY, SUITE 110, ALLEN, TX 75002 (FORMER ADDRESS) APPLICABLE ONLY TO CORPORATE ISSUERS STATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF COMMON EQUITY, AS OF THE LATEST PRACTICAL DATE: SEPTEMBER 30, 2004 13,602,000 TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE). YES ; NO X PART I ITEM 1. FINANCIAL STATEMENTS THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED BALANCE SHEETS
(Unaudited) September 30, December 31, 2004 2003 ------------------- -------------------- ASSETS Current Assets: $ - $ - ------------------- -------------------- TOTAL ASSETS $ - $ - =================== ==================== LIABILITIES Current Liabilities: Accounts Payable $ - $ 926 ------------------- -------------------- Total Current Liabilities - 926 ------------------- -------------------- TOTAL LIABILITIES - 926 ------------------- -------------------- STOCKHOLDERS' EQUITY (DEFICIT) Preferred Stock, Par Value $.001, Series A Convertible - 5,000,000 Shares Authorized, 0 Issued at September 30, 2004 and December 31, 2003 - - Common Stock, Par value $.001, Authorized 100,000,000 Shares, Issued 13,602,000 and 13,002,000 at September 30, 2004 and December 31, 2003 13,602 13,002 Common Stock to be Issued, 15,000 and 0 15 - Paid-In Capital 657,181 580,796 Retained Deficit (536,688) (536,688) Deficit Accumulated During Development Stage (134,110) (58,036) ------------------- -------------------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) - (926) ------------------- -------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ - $ - =================== ====================
See accompanying notes F-2 THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Cumulative Since October 4, 2000 For the Three Months Ended For the Nine Months Ended Inception of September 30, September 30, Development 2004 2003 2004 2003 Stage ---------------- ----------------- --------------- ----------------- ---------------- Revenues $ - $ - $ - $ - $ - Expenses General & Administrative 4,575 626 8,759 6,976 66,795 ---------------- ----------------- --------------- ----------------- ---------------- Net Loss from Continuing Operations (4,575) (626) (8,759) (6,976) (66,795) ---------------- ----------------- --------------- ----------------- ---------------- Discontinued Operations Loss on Sale of AirGate (67,315) - (67,315) - (67,315) ---------------- ----------------- --------------- ----------------- ---------------- Net Loss $ (71,890)$ (626)$ (76,074)$ (6,976)$ (134,110) ================ ================= =============== ================= ================ Loss per Share, Basic & Diluted - $ - $ (0.01)$ - ================ ================= =============== ================= Weighted Average Shares Outstanding 17,102,000 22,540,000 15,379,635 22,540,000 ================ ================= =============== =================
See accompanying notes F-3 THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Cumulative Since October 4, 2000 For the Nine Months Ended Inception of September 30, Development -------------------------------------- 2004 2003 Stage ------------------ ------------------ ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: ------------------ ------------------ ----------------- Net Loss $ (76,074) $ (6,976) $ (134,110) Adjustments to reconcile net loss to net cash Provided by operating activities: Stock Issued for Services 3,000 - 3,000 Change in Operating Assets and Liabilities: Net Loss from Discontinued Operations 67,315 - 67,315 Increase (Decrease) in Accounts Payable (926) 6,351 29,095 ------------------ ------------------ ----------------- Net Cash Used in Operating Activities (6,685) (625) (34,700) Net Cash From Discontinued Activities 6,685 - 6,685 ------------------ ------------------ ----------------- Net Cash Used in Operating Activities - (625) (28,015) ------------------ ------------------ ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Net Cash Provided by Investing Activities - - - ------------------ ------------------ ----------------- CASH FLOWS FROM FINANCING ACTIVITIES: Capital Contributed - 625 28,015 ------------------ ------------------ ----------------- Net Cash Provided by Financing Activities - 625 28,015 ------------------ ------------------ ----------------- Net (Decrease) Increase in Cash - - - Cash at Beginning of Period - - - ------------------ ------------------ ----------------- Cash at End of Period $ - $ - $ - ================== ================== =================
F-4 THE X-CHANGE CORPORATION (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued)
Cumulative Since October 4, 2000 For the Nine Months Ended Inception of September 30, Development -------------------------------------- 2004 2003 Stage ------------------ ------------------ ----------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ - $ - $ - Franchise and income taxes $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: - ---------------------------------------------------------------------- None. See accompanying notes F-5 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of accounting policies for The X-Change Corporation (A Development Stage Company) is presented to assist in understanding the Company's financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. Nature of Operations and Going Concern The accompanying financial statements have been prepared on the basis of accounting principles applicable to a "going concern", which assume that the Company will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations. Several conditions and events cast doubt about the Company's ability to continue as a "going concern". The Company has incurred net losses of approximately $134,000 for the period from October 4, 2000 (inception of development stage) to September 30, 2004, has a liquidity problem, and requires additional financing in order to finance its business activities on an ongoing basis. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses. The Company's future capital requirements will depend on numerous factors including, but not limited to its development and acquisition of oil and gas properties. These financial statements do not reflect adjustments that would be necessary if the Company were unable to continue as a "going concern". While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the "going concern" assumption used in preparing these financial statements, there can be no assurance that these actions will be successful. If the Company were unable to continue as a "going concern", then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported expenses, and the balance sheet classifications used. F-6 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Interim Reporting The unaudited financial statements as of September 30, 2004 and for the three and nine month period then ended, reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to fairly state the financial position and results of operations for the three and nine months. Operating results for interim periods are not necessarily indicative of the results which can be expected for full years. Organization and Basis of Presentation The Company was incorporated under the laws of the State of Delaware on February 5, 1969 as Diversified Technologies Group, Inc., the Company reincorporated and changed its domicile to the State of Nevada on October 4, 2000. The Company on December 1, 1999, entered into an agreement (Reorganization Agreement) to acquire all of the outstanding capital stock of S&J (Chatteris) Holdings Limited, a United Kingdom corporation (S&J Holdings). Pursuant to the Reorganization Agreement, the Company agreed to acquire all of the outstanding capital stock of S&J in exchange for shares of Common Stock. The Reorganization Agreement required S&J Holdings to perform certain conditions, including the delivery of audited financial statements. These conditions had not been fulfilled by February 14, 2000; therefore, the agreement was rescinded and deemed to have been void and of no effect from the beginning as if the acquisition had not occurred. All shares issued in the acquisition were returned to treasury. The Company also attempted two acquisitions in 2000, neither of which were able to deliver the required financial statements. The first was rescinded and the second was not consummated. In June 2001, the Company entered into a reorganization agreement that was later rescinded for failure to provide adequate compliance with the representations, warranties and covenants of the agreement. In July 2001, the Company changed its name to The X-Change Corporation. On January 15, 2002, the Company merged with WEBiX, Inc. This merger resulted in the Company acquiring the business and operations of WEBiX, in exchange for the issuance by the Company of a controlling interest in its shares to the former shareholders of WEBiX. On March 13, 2003, the Company rescinded in agreement with WEBiX and reentered the development stage. On February 9, 2004, the Company formed a wholly owned subsidiary, AirGate Technologies, Inc. Subsequently on September 30, 2004 the Company sold 100% of its ownership F-7 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Organization and Basis of Presentation (Continued) in the Company to Michael Sheriff. In June 2004, the Company formed two wholly owned subsidiaries, Innovative Telecommunication Technologies, Inc. (ITT) and OIL ID Systems, Inc. Nature of Business On February 9, 2004, the Company formed a wholly owned subsidiary, AirGate Technologies, Inc., for the purpose of engaging in the development and acquisition of leading-edge wireless internet/networking technologies, principally RFID ("radio frequency identification"). In June 2004, the Company formed two wholly owned subsidiaries, Innovative Telecommunication Technologies, Inc. (ITT) and OIL ID Systems, Inc. The VoIP telephone systems being offered by the Company's ITT subsidiary allow traditional carriers and new voice entrants to build large distributed VoIP networks without central office equipment investment and architecture. The system is virtually a "plug-in" installation working with either LAN-based VoIP phones or PC-based softphones. Demand for radio frequency identification solutions by energy producers and oil field service companies led the Company to create OIL ID Systems as a compliment to its wholly owned subsidiary, AirGate Technologies, Inc. The level of demand for RFID systems in producing oil fields around the world is on the rise, and OIL ID Systems will assist AirGate Technologies in developing applications and aggressively capturing market share within this growing RFID market niche. On September 30, 2004, the Company decided that the business plan of AirGate could not be advanced and decided to discontinue its efforts with this plan and disposed of AirGate. In connection with a share purchase agreement with Kolt Oil and Gas, the Company decided to look into the oil and gas industry. The Company's primary objective is to identify, acquire, and develop working interest percentages in smaller, underdeveloped oil and gas projects in Texas that do not meet the requirements of the larger producers and developers. F-8 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Principals of Consolidation The consolidated financial statements include the accounts for The X-Change Corporation and its wholly owned subsidiaries AirGate Technologies, Inc., Innovative Telecommunication Technologies, Inc. (ITT) and OIL ID Systems, Inc. The results of subsidiaries acquired during the year are consolidated from their effective dates of acquisition. All significant intercompany accounts and transactions have been eliminated. On September 30, 2004, the AirGate Technologies was sold and thus is not included in the consolidation. Cash and Cash Equivalents For the purpose of reporting cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Concentrations of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. Pervasiveness of Estimates The preparation of financial statements in conformity with generally accepted accounting principles required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Stock Compensation for Non-Employees The Company accounts for the fair value of its stock compensation grants for non-employees in accordance with FASB Statement 123. The fair value of each grant is equal to the market price of the Company's stock on the date of grant if an active market exists or at a value determined in an arms length negotiation between the Company and the non-employee. F-9 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Earnings (Loss) per Share Basic loss per share has been computed by dividing the loss for the year applicable to the common stockholders by the weighted average number of common shares outstanding during the years. The effects of common stock equivalents are anti-dilutive and thus are not considered. NOTE 2 - INCOME TAXES As of December 31, 2003, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $594,123 that may be offset against future taxable income through 2021. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carryforwards will expire unused. Accordingly, the potential tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount. NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN As is common with a development stage company, the Company has had recurring losses during its development stage. Continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to be successful in its planned activity, and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding and long term financing, which will enable the Company to operate for the coming year. NOTE 4 - COMMITMENTS As of September 30, 2004, all activities of the Company have been conducted from corporate officers either from their home or business offices. There are no commitments for future use of the facilities. F-10 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) NOTE 5 - PREFERRED STOCK The Company has authorized a total of 10,000,000 shares of Preferred Stock. Series A Convertible Preferred Stock is the initial series of Preferred Stock. This series shall consist of 5,000,000 shares with a par value of $.001. The Corporation is under no obligation to pay dividends or to redeem the Series A Convertible Preferred Stock. This series of stock is convertible into 10 shares of Common Stock at the option of the shareholder or upon automatic conversion. In the event of any liquidation, dissolution or winding-up of the Corporation, the holders of outstanding shares of Series A Preferred shall be entitled to be paid out of the assets of the Corporation available for distribution to shareholders, before any payment shall be made to or set aside for holders of the Common Stock, at an amount of $1 per share. As of September 30, 2004, there are no preferred shares issued. NOTE 6 - STOCK TRANSACTIONS On December 31, 2003, certain shareholders contributed back to capital. On March 15, 2004, the Company acquired furniture and fixtures totaling $9,000 for 15,000 shares of common stock. As of June 30, 2004, the Company has not issued these shares. On April 2, 2004, the Company issued 100,000 shares of common stock for consulting services. The shares were valued at $0.53 per share. On April 26, 2004, the Company's president surrendered his stock options contract for 12,000,000 common shares in exchange for the issuance of 4,000,000 shares of restricted common stock. The shares are restricted for 2 years. In connection with issuance of the shares, $15,000 was recorded as consulting expense. On September 30, 2004, the Company sold 100% of its AirGate, a wholly owned subsidiary, shares in exchange for return of 3,500,000 of its common shares. These shares were returned to treasury and subsequently canceled. F-11 THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) NOTE 7 - CONTINGENCIES On September 30, 2004, the Company entered into a recision agreement with Michael Sheriff and AirGate Technologies, Inc. whereby 100% of AirGates stock owned by X-Change Corporation would be sold to Michael Sheriff in exchange for the return of 3,500,000 common shares of X- Change Corporation's stock. As part of the purchase price, X-Change Corporation is entitled to 15 percent of the net proceeds resulting from contracts with Standard Motor Products, Medtronics - Cranial and Spinal Division, Borden Chemical and proceeds from the sale or license of the Child Safety Seat technology. NOTE 8 - MERGER/ACQUISITION On January 15, 2002, the Company and its newly created wholly owned subsidiary X-Change Technologies Corp, merged with WEBiX, Inc. (a Florida Corporation). As a result, the Company acquired the business and operations of WEBiX, in exchange for the issuance of a controlling interest in The X-Change Corporations' shares to the former shareholders of WEBiX. Under the Plan of Merger, 24,000,000 shares of Common Stock, 4,000,000 shares of Series A Convertible Preferred Stock (convertible into 40,000,000 shares of Common Stock) and 40,000,000 warrants were issued. In addition, certain existing shareholders of the Company surrendered approximately 9,500,000 shares of Common Stock to treasury. In connection with this merger, the par value of the Series A Convertible Preferred Stock changed from $.01 to $.001. On March 13, 2003, the Company rescinded its agreement with X-Change Technologies. The rescission, essentially, resulted in the return of all X-Change Corporation's assets in exchange for the surrender of all securities held by the former X-Change Technologies shareholders in the Company and the assumption by X-Change Technologies Corp. of all the Company's debt immediately prior to closing. The rescission effected a change in control over the business, policies and affairs of the Company from the X-Change shareholders to those shareholders holding securities in the Company prior to January 15, 2002. As a result, 15,062,000 shares of common stock and 5,000,000 shares of preferred stock were returned to treasury and the Company now has 22,540,000 shares of common stock, which was the amount outstanding immediately prior to closing of the X- Change Technologies Corp. acquisition on January 15, 2002. All lock-up agreements pertaining to these shares were released effective with the closing. NOTE 9 - SUBSEQUENT EVENTS On September 30, 2004, the Company entered into a share purchase agreement with Kolt Oil and Gas, a Texas Corporation, whereby it will acquire the business, operations and prospects of Kolt Oil & Gas for 2,500,000 shares of common stock. The acquisition is expected to close November 19, 2004. F-12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION This discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's annual report on Form 10-KSB for the year ended December 31, 2003. PLAN OF OPERATION The X-Change Corporation's business model consists of several key differentiators that, management feels, will set it apart from its competition. The Company's focus is to create long-term shareholder value by: (1) Pursuing intelligent, opportunistic acquisitions of other oil & gas exploration and production company opportunities whose business plans and operations are complementary; (2) consolidating redundant functions, such as oilfield operations, billing and accounting and customer support; (3) Partnering with other oil and gas exploration and production company software, that can provide leverage for the Company's activities; (4) Joining with energy industry organizations, highlighting the Company's technology solutions and oil and gas expertise and (5) Building a recognizable brand identity for its operating subsidiaries. MANAGEMENT DEAN L. ELLIOTT Dean L. Elliott holds a Bachelor of Arts degree from the University of Texas. Mr. Elliott has over 25 years experience in the oil and gas industry. The first 15 years was spent in the crude oil marketing division of Tesoro Petroleum Corp. (NYSE), Mitsuri & Co. (NYSE) subsidiary of Avant Petroleum and Adams Resources, Inc. (AMEX) subsidiary Gulfmark Energy, Inc. where the negotiated purchase and sales and logistics movements of millions of barrels of oil. From 1991 to present, Mr. Elliott has acted as president of Independent oil Companies Kolt Oil & Gas, Inc. and PRL Oil Company, Inc. His responsibilities include seeking, securing, and overseeing exploration projects, producing oil and gas property acquisitions, raising necessary capital from private investors, supervision of pumpers, field personnel, administrative staff dealing with entering into contacts and all other aspects of operations from prospects to pipeline. BERT MAXWELL Mr. Maxwell has been actively involved in all aspects of corporate financing for the last 25 years. Mr. Maxwell has been responsible for providing 30 million dollars in private investment in the oil & gas industry over the past 10 years. Previously to his participation in the oil & gas industry, Mr. Maxwell arranged financing for the real estate industry totaling 2 billion dollars and consulted and advised on every aspect of the transaction. Mr. Maxwell attended the University of North Texas. F-13 ROBERT BARBEE Robert Barbee holds a Business Degree from Kilgore College in 1992. He has 13 years experience in oil and gas operations having worked with a fortune 500 energy companies supervising field operations with production if 1,000 barrels of oil per day in the East Texas Field Mr. Barbee currently operates over 30 oil and gas wells in East Texas for Kolt oil and gas, Inc. while maintaining executive position with Oil Patch and Supply Company, a large oil field distributor to major and large independent oil and gas operations in Kilgore, Texas. MICHAEL P. MCINERNEY Michael P. McInerney joined the company on October 21, 2004 as a consultant, through his company Energy Advisors, Inc., and will be coordinating corporate development. Mr. McInerney brings 30 years experience to the company with emphasis on North American oil & natural gas markets and foreign exploration and production. Past experience includes executive officer positions with two major New York Stock Exchange listed companies, overseeing corporate development and investor relations and serving on the board of directors of Canadian and European subsidiaries of US based international energy concerns. In 1994, Mr. McInerney formed Energy Advisors, Inc., an energy consulting concern, representing U.S. and international exploration and production companies. Mr. McInerney conducted meeting, developed presentation material coordinated field trips to the Far East, U.S. and Canada, Europe and South America for institutional investors and was successful in arranging private investor financing. Mr. McInerney holds a BBA from the University of Michigan and is a member of the American Institute of Certified Public Accountants. His distinguished credentials included past President of Petroleum Investor Relations Association and Institute of Management Accountants. He is highly regarded by his peers and his outstanding achievements and long time contacts will compliment and contribute significantly to the goals set forth for the continued future growth and success of The X- Change Corporation. BILL BOTTO William (Bill) Botto holds degrees in both Biology, with an emphasis in microbiology, and Petroleum Geology. Mr. Botto is also a Registered Professional Geologist in the state of Texas. Mr. Botto has over 23 years experience in the oil & gas industry. His experience ranges from F-14 frontier exploration in the East Texas Cretaceous carbonates and sands to the tertiary sands of offshore Texas and Louisiana. He has worked for Placid Oil Co., Sage Energy Co., and SPG Exploration. In 1991 he co-founded Micro-TES, Inc. Micro-TES' primary focus is designing biological products for enhancing oil production (Microbial Enhanced Oil Recovery, "MEOR"), bioremediation, and related products. Currently he is involved in oil recovery projects in the USA, China, Russia, and the Athabasca TAR sands in western Canada. Mr. Botto is an active member of the AAPG (American Association of Petroleum Geology) and the American Society of Microbiology. OIL ID SYSTEMS, INC. In June 2004, the Company formed a new subsidiary, OIL ID Systems, Inc. OIL ID Systems, Inc. is an independent oil & gas exploration and production company with headquarters in Dallas, Texas. The principals involved in the company have 25 years of experience in the marketing of and exploration for petroleum products and services. Demand for radio frequency identification solutions by energy producers and oil field service companies led the Company to create OIL ID Systems as a compliment to its oilfield operations. Radio Frequency Identification is a technology that employs miniature radio transmitters in conjunction with microprocessors that can be utilized to track oil movement and migration and will be a valuable tool in assessing and identifying producing oil & gas formations prior to fracturing. The level of demand for RFID systems in producing oil fields around the world is on the rise, and OIL ID Systems will assist in discovering additional oil and gas reserves. Dean Elliott, a twenty-five year veteran of the petroleum industry, has been named President of the new subsidiary. The Company had $4,575 and $8,759 in general and administrative expenses for the three and nine month periods ended September 30, 2004, respectively and for the same periods in 2003 were $626 and $6,976. The increase in general and administrative expenses is due to the fact that the company was dormant for most of 2003, and has just started working on a business plan. For the three and nine months ended September 20, 2004 and 2003, the Company had no revenues. Losses on operations will continue until sufficient revenues can be achieved from the various business units of the company. F-15 RESULTS OF OPERATIONS The Company had $4,575 and $8,759 in general and administrative expenses for the three and nine month periods ended September 30, 2004, respectively and for the same periods in 2003 were $626 and $6,976. The increase in general and administrative expenses is due to the Company was dormant for most of 2003, and has just started working on a business plan. For the three and nine months ended September 30, 2004 and 2003, the Company had no revenues. Losses on operations will continue until sufficient revenues can be achieved from the various business units of the Company. LIQUIDITY AND CAPITAL RESOURCES At September 30, 2004 and December 31, 2003, the Company had no assets. The Company had a net working capital (deficit) of $0 at September 30, 2004 and ($926) at December 31, 2003. Net stockholders' equity (deficit) in the Company was and $0 as of September 30, 2004 and ($926) at December 31, 2003. The Company continues to seek strategic alternatives, including discussions with joint venture partners and investors. On May 9, 2004, the Company signed a revolving line of credit promissory note for $500,000 with certain shareholders. The accompanying quarterly financial statements have been prepared assuming the Company will continue as a going concern. The Company's ability to continue as a going concern, however, is dependent upon the Company's ability to implement its business objectives in order to generate cash flow. ITEM 3. CONTROLS AND PROCEDURES The Company's Chief Executive Officer and Chief Financial Officer have concluded, based on an evaluation conducted within 90 days prior to the filing date of this Quarterly Report on Form 10-QSB, that the Company's disclosure controls and procedures have functioned effectively so as to provide those officers the information necessary whether: (i) this Quarterly Report on Form 10-QSB contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report on Form 10-QSB, and (ii) the financial statements, and other financial information included in this Quarterly Report on Form 10-QSB, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Quarterly Report on Form 10-QSB. There have been no significant changes in the Company's internal controls or in other factors since the date of the Chief Executive Officer's and Chief Financial Officer's evaluation that could F-16 significantly affect these internal controls, including any corrective actions with regards to significant deficiencies and material weaknesses. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES On September 30, 2004, the Company sold 100% of its AirGate, a wholly owned subsidiary, shares in exchange for return of 3,500,000 of its common shares. These shares were returned to treasury and subsequently canceled. Item 3. Defaults Upon Senior Securities ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION On September 30, 2004, Michael Sheriff resigned President, Chief Executive Officer , Treasurer and Chairman and Dean Elliott was appointed as new CEO and President and Robert Barbee and Bert Maxwell were appointed as new directors of the Company. On September 30, 2004, the Company entered into a share purchase agreement with Kolt Oil and Gas, a Texas Corporation, whereby it will acquire the business, operations and prospects of Kolt Oil & Gas for 2,500,000 shares of common stock. The acquisition is expected to close November 19, 2004. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS The following exhibits are included as part of this report: Exhibit Number Title of Document F-17 31 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. REPORTS No reports were filed on Form 8-k for the quarter ending September 30, 2004. F-18 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this November 15, 2004 THE X-CHANGE CORPORATION (Registrant) DATE: November 15, 2004 By:/s/ Dean Elliott ------------------------------- ------------------------------ Dean Elliott, President, Chief Executive Officer and Chairman (Principal Executive Officer) By: /s/ Bert Maxwell Bert Maxwell, Secretary/Treasurer (Principal Executive Officer) F-19 EX-31 2 form10qsb093004ex31-1.txt Exhibit 31.1 SECTION 302 CERTIFICATIONS I, Dean Elliott, 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: November 15, 2004 /s/ Dean Elliott Dean Elliott, President, Chief Executive Officer and Chairman (Principal Executive Officer) EX-31 3 form10qsb093004ex31-2.txt Exhibit 31.2 SECTION 302 CERTIFICATIONS I, Bert Maxwell, 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: November 15, 2004 /s/ Bert Maxwell Bert Maxwell, Secretary/Treasurer (Principal Financial Officer) EX-32 4 form10qsb093004ex32-1.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 September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dean Elliott, 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/ Dean Elliott Dean Elliott, President, Chief Executive Officer , Treasurer and Chairman (Principal Executive and Financial Officer) November 15, 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. EX-32 5 form10qsb093004ex32-2.txt EXHIBIT 32.2 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 September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bert Maxwell, Secretary/Treasurer 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/ Bert Maxwell Bert Maxwell, Secretary/Treasurer (Principal Financial Officer) November 15, 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-----