-----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, VAZJuTj/OqnyGFRF6hWgRbHRvTa9qirxgr7PcCvJQNiXIBAVsZi2ImcvHXNGj9RB HdXzu52u72gvXLwTGyMqVw== 0001165527-10-000335.txt : 20100428 0001165527-10-000335.hdr.sgml : 20100428 20100428163851 ACCESSION NUMBER: 0001165527-10-000335 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20100331 FILED AS OF DATE: 20100428 DATE AS OF CHANGE: 20100428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: X-CHANGE CORP CENTRAL INDEX KEY: 0000054424 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 900156146 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-41703 FILM NUMBER: 10777377 BUSINESS ADDRESS: STREET 1: 12655 N. CENTRAL EXPRESSWAY STREET 2: SUITE 1000 CITY: DALLAS STATE: TX ZIP: 75243 BUSINESS PHONE: 972-386-7350 MAIL ADDRESS: STREET 1: 12655 N. CENTRAL EXPRESSWAY STREET 2: SUITE 1000 CITY: DALLAS STATE: TX ZIP: 75243 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 10-Q 1 g4061.txt QTRLY REPORT FOR THE QTR ENDED 3-31-10 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q - -------------------------------------------------------------------------------- (Mark one) [X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2010 [ ] 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 Registrant as Specified in Its Charter) Nevada 90-0156146 (State of Incorporation) (I.R.S. Employer ID Number) 12655 North Central Expressway, Suite 1000, Dallas, Texas 75243 (Address of Principal Executive Offices) (972) 386-7350 (Registrant's Telephone Number) 17120 N. Dallas Parkway, Suite 235, Dallas, Texas 75248 (Former name or former address, if changed since last report) - -------------------------------------------------------------------------------- Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [ ] NO [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): YES [X] NO [ ] State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: April 27, 2010: 136,089,746 Transitional Small Business Disclosure Format (check one): YES [ ] NO [X] THE X-CHANGE CORPORATION Form 10-Q for the Quarter ended March 31, 2010 Table of Contents Page ---- PART I - FINANCIAL INFORMATION Item 1 - Financial Statements 3 Item 2 - Management's Discussion and Analysis or Plan of Operation 12 Item 3 - Quantitative and Qualitative Disclosures About Market Risk 15 Item 4 - Controls and Procedures 15 PART II - OTHER INFORMATION Item 1 - Legal Proceedings 16 Item 2 - Recent Sales of Unregistered Securities and Use of Proceeds 16 Item 3 - Defaults Upon Senior Securities 16 Item 4 - Submission of Matters to a Vote of Security Holders 16 Item 5 - Other Information 16 Item 6 - Exhibits 16 SIGNATURES 16 2 PART I ITEM 1 - FINANCIAL STATEMENTS THE X-CHANGE CORPORATION BALANCE SHEETS March 31, 2010 and December 31, 2009
(Unaudited) (Audited) March 31, December 31, 2010 2009 ------------ ------------ ASSETS CURRENT ASSETS Cash on hand and in bank $ 1,709 $ 1,080 ------------ ------------ TOTAL CURRENT ASSETS 1,709 1,080 ------------ ------------ OTHER ASSETS Prepaid debt financing fees, net of accumulated amortization of approximately $23,998 and $21,332 5,355 8,001 ------------ ------------ TOTAL OTHER ASSETS 5,355 8,001 ------------ ------------ TOTAL ASSETS $ 7,044 $ 9,081 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Convertible debenture payable, net of unamortized discount $ 245,225 $ 249,532 Notes payable to shareholder 733,271 723,926 Accounts payable - trade 12,175 1,245 Accrued interest payable 117,831 97,134 ------------ ------------ TOTAL CURRENT LIABILITIES 1,109,141 1,071,837 ------------ ------------ TOTAL LIABILITIES 1,109,141 1,071,837 ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT) Preferred stock - $0.001 par value 75,000,000 shares authorized none issued and outstanding -- -- Common stock - $0.001 par value 750,000,000 shares authorized 110,239,746 and 106,337,307 shares issued and outstanding 110,240 106,337 Additional paid-in capital 17,815,413 17,729,560 Accumulated deficit (19,027,750) (18,898,653) ------------ ------------ TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (1,102,097) (1,062,756) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 7,044 $ 9,081 ============ ============
The accompanying notes are an integral part of these financial statements. 3 THE X-CHANGE CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Three months ended March 31, 2010 and 2009 (UNAUDITED)
Three months Three months ended ended March 31, March 31, 2010 2009 ------------ ------------ REVENUES - net of returns and allowances $ -- $ -- COST OF SALES -- -- ------------ ------------ GROSS PROFIT -- -- ------------ ------------ OPERATING EXPENSES General and administrative expenses 19,646 758 ------------ ------------ TOTAL OPERATING EXPENSES 19,646 758 ------------ ------------ LOSS FROM OPERATIONS (19,646) (758) OTHER INCOME (EXPENSE) Interest expense, including amortization of financing fees and note discounts (109,451) (374,300) ------------ ------------ TOTAL OTHER INCOME (EXPENSE) (109,451) (274,300) ------------ ------------ LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES (129,097) (375,058) PROVISION FOR INCOME TAXES -- -- ------------ ------------ LOSS FROM CONTINUING OPERATIONS (129,097) (375,058) DISCONTINUED OPERATIONS, NET OF INCOME TAXES Loss from discontinued operations, net of provision for income taxes of $-0- and $-0-, respectively -- -- Loss on disposition of discontinued operations, net of provision for income taxes of $-0- and $-0-, respectively -- (33,500) ------------ ------------ LOSS FROM DISCONTINUED OPERATIONS -- (33,500) ------------ ------------ OTHER COMPREHENSIVE INCOME -- -- ------------ ------------ COMPREHENSIVE LOSS $ (129,097) $ (408,558) ============ ============ Net loss per weighted-average share of common stock outstanding, calculated on Net Loss - basic and fully diluted From continuing operations $ (0.00) $ (0.00) From discontinued operations (0.00) (0.00) ------------ ------------ Total $ (0.00) $ (0.00) ============ ============ Weighted-average number of shares of common stock outstanding 106,597,470 106,019,757 ============ ============
The accompanying notes are an integral part of these financial statements. 4 THE X-CHANGE CORPORATION STATEMENTS OF CASH FLOWS Three months ended March 31, 2010 and 2009 (UNAUDITED)
Three months Three months ended ended March 31, March 31, 2010 2009 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss for the period $ (129,097) $ (408,559) Adjustments to reconcile net loss to net cash provided by operating activities Depreciation and amortization 30,998 276,068 Interest expense capitalized as principal -- 72,000 Interest expense paid with common stock 57,756 568 Increase (Decrease) in Accounts payable and other 10,930 15,757 Accrued interest payable 28,332 25,663 ---------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (8,716) (18,503) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES -- -- ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Cash received on related party notes payable 9,345 -- Cash paid on convertible debenture principal -- -- ---------- ---------- NET CASH USED IN FINANCING ACTIVITIES 9,345 -- ---------- ---------- INCREASE (DECREASE) IN CASH 629 (18,503) Cash at beginning of period 18,503 18,503 ---------- ---------- CASH AT END OF PERIOD $ -- $ -- ========== ========== SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID Interest paid for the period $ -- $ -- ========== ========== Income taxes paid for the period $ -- $ -- ========== ========== SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Conversion of Debenture Payable into Common Stock $ 32,000 $ 1,550 ========== ==========
The accompanying notes are an integral part of these financial statements. 5 THE X-CHANGE CORPORATION NOTES TO FINANCIAL STATEMENTS March 31, 2010 and December 31, 2009 NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS The X-Change Corporation (Company) was incorporated under the laws of the State of Delaware on February 5, 1969 and changed its corporate domicile to the State of Nevada on October 4, 2000. We were originally organized to seek merger and/or acquisition candidates and engaged in various transactions since our inception. As of December 31, 2008, we have disposed of all of the assets and operations. On July 20, 2005, the Company exchanged 10,000,000 shares of common stock for 100% of the issued and outstanding stock of AirGATE Technologies, Inc. (AirGATE). This transaction made AirGATE a wholly-owned subsidiary of the Company. In December 2008, the lender of a note payable by AirGATE began foreclosure proceedings against its collateral, which included 100% of the Company's holdings in AirGATE and the right to convert the note into restricted, unregistered shares of the Company's common stock. The foreclosure proceeding was consummated on January 16, 2009 and Company's holdings in AirGATE were forfeited. Due to the timing of this transaction, the foreclosure and related disposition of AirGATE is reflected in the accompanying financial statements as of December 31, 2008. On March 11, 2010, the Company announced a change in our strategic direction and business plan to focus on offering multimedia and e-commerce to the diverse and growing Hispanic markets within the United States and in other countries. The Company anticipates having two distinct divisions and operating each within a wholly-owned operating subsidiary corporation consisting of a Latino-targeted media delivery service and a bilingual home shopping network. On March 25, 2010, we formed the wholly-owned subsidiaries - Caballo Blanco Communications, Ltd. and Commerce Services, Inc. - as Colorado corporations to conduct these operations. NOTE B - PREPARATION OF FINANCIAL STATEMENTS The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has adopted a year-end of December 31. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires 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. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-K containing the Company's financial statements for the year ended December 31, 2009. The information presented within these interim financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein. In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and Exchange Commission's instructions for Form 10-Q are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2010. 6 THE X-CHANGE CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 2010 and December 31, 2009 NOTE C - GOING CONCERN UNCERTAINTY As of March 31, 2010, the Company has no operations, limited cash on hand, and significant debt related to the financing of the operations of its former subsidiary, AirGATE. Because of these factors, the Company's auditors have issued an audit opinion on the Company's financial statements which includes a statement describing our going concern status. This means, in the auditor's opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion. The Company's current business plan is to focus on offering multimedia and e-commerce to the diverse and growing Hispanic markets within the United States and in other countries. The Company anticipates having two distinct divisions and operating each within a wholly-owned operating subsidiary corporation consisting of a Latino-targeted media delivery service and a bilingual home shopping network. On March 25, 2010, we formed the wholly-owned subsidiaries - Caballo Blanco Communications, Ltd. and Commerce Services, Inc. - as Colorado corporations to conduct these operations. The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis. Further, the Company faces considerable risk in its business plan and a potential shortfall of funding due to any inability to raise capital in the equity securities market. If no additional operating capital is received during the next twelve months, the Company will be forced to rely on existing cash in the bank and additional funds loaned by management and/or significant stockholders. The Company may become dependent upon additional external sources of financing; including being dependent upon its management and/or significant stockholders to provide sufficient working capital in excess of the Company's initial capitalization to preserve the integrity of the corporate entity. The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company. The Company's certificate of incorporation authorizes the issuance of up to 75,000,000 shares of preferred stock and 750,000,000 shares of common stock. The Company's ability to issue preferred stock may limit the Company's ability to obtain debt or equity financing, The Company's ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities. The Company's current controlling stockholder has maintained the corporate status of the Company and has provided all nominal working capital support on the Company's behalf since the December 2008 foreclosure action. Because of the Company's lack of operating assets, its continuance is fully dependent upon the majority stockholder's continuing support. It is the intent of this controlling stockholder to continue the funding the nominal necessary expenses to sustain the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding. Further, the Company is at the mercy of future economic trends and business operations for this controlling stockholder to have the resources available to support the Company. Should this pledge fail to provide financing, the Company has not identified any alternative sources of working capital to support the Company. In such a restricted cash flow scenario, the Company would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities. Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market. While the Company is of the opinion that good faith estimates of the Company's ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps. 7 THE X-CHANGE CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 2010 and December 31, 2009 NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. Cash and cash equivalents For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. Cash overdraft positions may occur from time to time due to the timing of making bank deposits and releasing checks, in accordance with the Company's cash management policies. 2. Financing Fees Financing fees recorded in connection with debt issuances are amortized on a straight-line basis over the maturity term of the related debt. 3. Convertible Debt Instruments The Company records debt net of debt discount for beneficial conversion features and warrants, on a relative fair value basis. Beneficial conversion features are recorded pursuant to the Beneficial Conversion Feature and Debt Topics of the FASB Accounting Standards Codification. The amounts allocated to warrants and beneficial conversion rights are recorded as debt discount and as additional paid-in-capital. Debt discount is amortized to interest expense over the life of the debt. 5. Accounting for Stock Options The Company has adopted the provisions of the Compensation Topic of the FASB Accounting Standards Codification which requires the measurement and recognition of compensation expense for all share-based payment awards made to its employees and directors based on estimated fair values at the time of grant. In addition, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 "Share-Based Payment" (SAB 107) in March 2005, which provides supplemental accounting guidance. The valuation techniques used in applying these provisions are sensitive to certain assumptions and parameters used including the volatility and liquidity of the Company's stock. The Black Scholes option valuation model used in this process was developed for use in estimating the fair value of trading options that have no vesting restrictions and are fully transferable. Because the Company's stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock options. The Company has recorded in the past, and may record in the future, substantial non-cash compensation expense which is not expected to have a significant effect on our financial condition or cash flows but are expected to have a significant, adverse effect on our reported results of operations. The Company follows the provisions of the Compensation topic of the FASB Accounting Standards Codification for equity instruments granted to non-employees. 6. Income taxes The Company files income tax returns in the United States of America and various states, as appropriate and applicable. As a result of the Company's bankruptcy action, the Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for any period prior to December 31, 2006. The Company does not anticipate any examinations of returns filed for periods ending after December 31, 2006. 8 THE X-CHANGE CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 2010 and December 31, 2009 NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 6. Income taxes - continued The Company uses the asset and liability method of accounting for income taxes. At March 31, 2010 and December 31, 2009, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals. The Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification. The Codification Topic requires the recognition of potential liabilities as a result of management's acceptance of potentially uncertain positions for income tax treatment on a "more-likely-than-not" probability of an assessment upon examination by a respective taxing authority. As a result of the implementation of Codification's Income Tax Topic, the Company did not incur any liability for unrecognized tax benefits. 7. Income (Loss) per share Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements. Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants). Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company's net income (loss) position at the calculation date. As of March 31, 2010 and 2009, the Company's outstanding stock options, warrants, and convertible debentures are considered to be anti-dilutive due to the Company's net operating loss. 8. New and Pending Accounting Pronouncements The Company is of the opinion that any and all pending accounting pronouncements, either in the adoption phase or not yet required to be adopted, will not have a significant impact on the Company's financial position or results of operations. NOTE E - NOTE PAYABLE TO STOCKHOLDER During Calendar 2009, the Company executed a $100,000 Line of Credit Note Payable with South Beach Live, Ltd. (South Beach), a significant Company stockholder, to provide funds necessary to support the corporate entity and comply with the periodic reporting requirements of the Securities Exchange Act of 1934, as amended. This note bears interest at 10.0% and matures in Calendar 2011. Through March 31, 2010, South Beach or its affiliates have advanced an aggregate of approximately $65,000 against this note. 9 THE X-CHANGE CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 2010 and December 31, 2009 NOTE F - COMMON STOCK TRANSACTIONS In January 2009, the Company issued an aggregate 2,118,506 shares of restricted, unregistered common stock in connection with the redemption of $1,550 in convertible debenture debt. As the conversion price was below the "fair value" of the securities issued, the Company experienced a non-cash charge to operations of approximately $568 which was classified as "interest expense" in the accompanying financial statements. On March 26, 2010, LJII issued a Debenture Conversion Notice to the Company for the conversion of $32,000 of the outstanding debenture balance into 3,902,439 shares of the Company's common stock. This conversion was completed on April 12, 2010 with the delivery of the shares to LJII. As the conversion price was below the "fair value" of the securities issued, the Company experienced a non-cash charge to operations of approximately $57,760 which will be classified as "interest expense" in the financial statements for the quarter ended March 31, 2010. In conjunction with conversions from 2008 through 2010, a continued disagreement exists between LCII and the Company's management over the requirements of the contractual mandatory exercise of approximately 475,500 warrants related to the conversion of an aggregate $45,500 of the debenture balance. The disputed balance on this transaction is approximately $475,500 due to the Company on contractually exercisable warrants by LCII. There is a remote possibility that this delinquency could be deemed a default by LCII by the Company's management. The Company's management is investigating potential remedies to this situation. NOTE G - CONTINGENCIES On December 15, 2008, the Company defaulted on its promissory note obligation to Melissa CR 364, LTD. for failing to remit the outstanding balance and unpaid, but accrued, interest payable on the contractual maturity date. Melissa CR 364, LTD. served the Company with a demand for payment in full of the promissory note. As of the demand date, the Company did not have the funds available to pay Melissa CR 364, LTD. Melissa CR 364, LTD. has a security interest in the shares of stock of our wholly owned subsidiary, AirGATE. Additionally, a default under the Melissa CR 364, LTD. note triggered a default under our loan agreement with La Jolla Cove Investors, Inc. Upon an event of default under the La Jolla Cove Investors, Inc. debenture, the Company may be (I) required to pay a default rate equal to 3.75% percent and (ii) accelerate the payment of the entire outstanding amounts owed at 120% of the outstanding principal amount. On January 21, 2009, Melissa CR 364, LTD. informed the Company it had completed a foreclosure on its security interest in the 100% of the issued and outstanding shares of the stock of our wholly-owned subsidiary, AirGATE Technologies, Inc. and held a sale of the AirGATE stock on January 16, 2009. As disclosed in the Company's Form 8-K, filed on January 26, 2009, Melissa CR 364, LTD.'s foreclosures and auction of their holdings reduced the Company's debt to Melissa CR 364, LTD. by $10,000, the amount realized from the auction. After this foreclosure action and auction sale, The X-Change Corporation (Company) had no operations or operating assets. On January 26, 2009, we received notice of a default on our Amended and Restated Senior Secured Convertible Term Notes - Tranche A and our Senior Secured convertible Term Note - Tranche B from Samson Investment Company, Ironman PI Fund (QP), L.P. and John Thomas Bridge and Opportunity Fund, L.P., with a collective principal amount of $3,600,000, plus unpaid, but accrued, interest payable, related to Melissa CR 364, LTD.'s notice of foreclosure on the AirGATE stock. Samson Investment Company, Ironman PI fund (QP), L.P. and John Thomas Bridge and Opportunity Fund, L.P. collectively demanded redemption of the notes within seven days of the notice of default date for $1,975,162.87, $1,975,162.87 and $637,149.31, respectively. At the time notice of default was received, the Company did not have the funds available to satisfy the collective obligations. Samson Investment Company, Ironman PI Fund (QP), L.P. and John Thomas Bridge and Opportunity Fund, L.P., has a security interest in all of the assets of AirGATE. 10 THE X-CHANGE CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 2009 and December 31, 2008 NOTE G - CONTINGENCIES - CONTINUED On May 4, 2009, the Company entered into a Settlement Agreement and Release with AirGATE Technologies Inc. (AirGATE), HM Energy Technologies Inc. (HM), WM Chris Mathers (Mathers), Kathleen Hanafan (Hanafan), Duke Loi (Loi), Samson Investment Company (Samson), Ironman PI Fund (QP), L.P. (Ironman), John Thomas Bridge and Opportunity Fund, LP (John Thomas and, collectively with Samson and Ironman, SIJ) and Melissa CR 364, LTD (Melissa). Under the terms of the Agreement, (I) SIJ foreclosed on the assets of AirGATE, which had been security for the SIJ Notes; (ii) SIJ transferred and assigned 7,196,429 shares of the Company's common stock held by Samson, 7,196,429 shares of the Company's common stock held by Ironman and 2,321,428 shares of the Company's common stock held by John Thomas, comprising all of the shares of Company common stock owned by them, to Melissa and others; (iii) SIJ cancelled the SIJ Notes, SIJ Guaranty, the Tranche A Warrants and the Tranche B Warrants issued in connection with the SIJ Notes, and any other security convertible or exchangeable into the common stock of X-Change; (iv) SIJ and Hanafan paid $75,000.00 to Melissa to defray costs to be incurred by the Company for completion of an audit of the consolidated financial statements of the Company and AirGATE for the fiscal year ended December 31, 2008; and (v) all the parties agree to mutual releases and confidentiality, except that Melissa did not release the Company from the balance of the Melissa Note. In summary, as a result of the various transactions effected under the Agreement, SIJ surrendered all of their shares in the Company; cancelled financial obligations of the Company that exceeded $3.6 million, with interest; and terminated their rights under warrant and guaranty agreements. The Company provided all parties with a full release of claims, known and unknown, in exchange for these various surrenders, cancellations and terminations. To the extent that the cancellation of debt constitutes a taxable event, management is of the opinion that the Company's cumulative net operating loss carryforward will more than offset any taxes due as a result of this event. On May 26, 2009, effective as of December 15, 2008, the Company issued 51,000,000 shares of its $0.001 par value common stock to K & D Equity Investments, Inc. (K&D) , a Texas corporation, pursuant a Debt Assignment and the conversion features of the Convertible Promissory Note between the Company, AirGATE and Melissa CR 364, LTD. The issuance was originally approved by the Board in December 2008, but was not accepted by Melissa CR 364, LTD. and assigned to K & D until May 26, 2009. This issuance is reflected in the accompanying financial statements as of the effective date of the Board Action. NOTE H - SUBSEQUENT EVENTS Management has evaluated all activity of the Company through April 28, 2010 (the issue date of the financial statements) and concluded that no subsequent events, other than as disclosed above, have occurred that would require recognition in the financial statements or disclosure in the notes to financial statements. (Remainder of this page left blank intentionally) 11 PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (1) CAUTION REGARDING FORWARD-LOOKING INFORMATION Certain statements contained in this quarterly filing, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings. Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments. (2) GENERAL The X-Change Corporation (Company) was incorporated under the laws of the State of Delaware on February 5, 1969 and changed its corporate domicile to the State of Nevada on October 4, 2000. We were originally organized to seek merger and/or acquisition candidates and engaged in various transactions since our inception. As of December 31, 2008, we have disposed of all of the assets and operations. On July 20, 2005, the Company exchanged 10,000,000 shares of common stock for 100% of the issued and outstanding stock of AirGATE Technologies, Inc. (AirGATE). This transaction made AirGATE a wholly-owned subsidiary of the Company. In December 2008, the lender of a note payable by AirGATE began foreclosure proceedings against its collateral, which included 100% of the Company's holdings in AirGATE and the right to convert the note into restricted, unregistered shares of the Company's common stock. The note and accrued, and unpaid, interest was converted to 51,000,000 shares of the Company's common stock and the foreclosure proceeding was consummated on January 16, 2009. Due to the timing of this transaction, the foreclosure and related disposition of AirGATE is reflected in the accompanying financial statements as of December 31, 2008. On May 4, 2009, the Company entered into a Settlement Agreement and Release with AirGATE, HM Energy Technologies, Inc. (HM), Wm. Chris Mathers, the Company's former CFO, (Mathers), Kathleen Hanafan, the Company's former CEO, (Hanafan), Duke Loi, an employee of AirGATE, (Loi), Samson Investment Company (Samson), Ironman PI Fund (QP), L.P. (Ironman), John Thomas Bridge and Opportunity Fund, LP ("John Thomas" collectively with Samson and Ironman, SIJ) and Melissa CR 364, LTD (Melissa). Under the terms of the Agreement, (I) SIJ foreclosed on the assets of AirGATE, which had been security for the SIJ Notes; (ii) SIJ transferred and assigned 7,196,429 shares of the Company's common stock held by Samson, 7,196,429 shares of the Company's common stock held by Ironman and 2,321,428 shares of the Company's common stock held by John Thomas, comprising all of the shares of Company common stock owned by them, to Melissa and its assigns; (iii) SIJ cancelled the SIJ Notes, SIJ Guaranty, the Tranche A Warrants and the Tranche B Warrants issued in connection with the SIJ Notes, and any other security convertible or exchangeable into the common stock of the Company; (iv) SIJ and Hanafan paid $75,000.00 to Melissa to defray costs to be incurred by Melissa on behalf of the Company for various general and administrative expenses; and (v) all the parties agree to mutual releases and confidentiality, except that Melissa did not release the Company from the Melissa Note. As a result of the various transactions effected under the Agreement, SIJ surrendered all of their shares in the Company; cancelled all financial obligations of the Company, which approximated $3.96 million, including accrued but unpaid interest); and terminated their rights under the various warrant and guaranty agreements. The Company provided all parties with a full release of claims, known and unknown, in exchange for these various surrenders, 12 cancellations and terminations. To the extent that the cancellation of these debts constitutes a taxable event, the Company's net operating loss carry-forward is anticipated to compensate for any taxes due from this event. On March 11, 2010, we announced a change in our strategic direction and business plan to focus on offering multimedia and e-commerce to the diverse and growing Hispanic markets within the United States and in other countries. The Company anticipates having two distinct divisions and operating each within a wholly-owned operating subsidiary corporation consisting of a Latino-targeted media delivery service and a bilingual home shopping network. On March 25, 2010, we formed the wholly-owned subsidiaries - Caballo Blanco Communications, Ltd. and Commerce Services, Inc. - as Colorado corporations to conduct these operations. (3) RESULTS OF OPERATIONS The Company had no separately earned revenue, except for nominal interest income, for either of the three month periods ended March 31, 2010 or 2009, respectively. All operating revenues through December 31, 2008 were earned in the Company's former wholly-owned subsidiary, AirGATE Technologies, Inc. General and administrative expenses for the three months ended March 31, 2010 and 2009 were approximately $19,600 and $700, respectively. The increase in the 2010 expenditures over the 2009 costs was due to the Company's effort to become and remain current with its reporting requirements under the Securities Exchange Act of 1934, as amended. During the 1st quarter of 2009, the Company was virtually dormant due to ongoing litigation and actions surrounding the foreclosure of the Company's former wholly-owned subsidiary, AirGATE Technologies, Inc. The Company recognized interest accruals, amortization of debt financing fees and accretion of debt discounts of approximately $109,451 and $374,000 during the three months ended March 31, 2010 and 2009, respectively. The Company's convertible debenture with La Jolla Cove Investors, Inc. matures in August 2010. This debenture is discussed more fully in our Annual Report on Form 10-K for the year ended December 31, 2009. We specifically note that all of the Company's debt is in default due to the December 2008 foreclosure action and, accordingly, has been classified as "current" on the Company's balance sheet regardless of the stated maturity date(s). Due to the minimal expenditures in 2009, management anticipates that future expenditure levels will fluctuate, either up or down, as the Company complies with its periodic reporting requirements and implements the business plan of identifying a suitable situation for a business combination transaction. Earnings per share for the respective three month periods ended March 31, 2010 and 2009 were $(0.00) and $(0.00) based on the weighted-average shares issued and outstanding at the end of each respective period. The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under the Securities Exchange Act of 1934 unless and until such time that the Company completes a business combination transaction. (4) PLAN OF BUSINESS On March 11, 2010, we announced a change in our strategic direction and business plan to focus on offering multimedia and e-commerce to the diverse and growing Hispanic markets within the United States and in other countries. Our management intends to develop and leverage relationships with existing home shopping networks to build significant Hispanic audiences that purchase merchandise via internet connections and through other smart mobile devices. These relationships and the know-how of management will conserve capital that would ordinarily be required for buying, inventory warehousing management, development of an online sales infrastructure, shipping and returns, customer service, and the focus on effective merchandising and marketing. Our management understands and is in a position to monitor the buying preferences and behaviors of its markets--each of which has unique characteristics. We intend to develop intriguing episodic productions that feature popular Hispanic talent promoting their product lines, an approach that has been successfully implemented at other home shopping platforms such as QVC. Our media-delivery network will be similar to the approach taken by video services such as Hulu(R) with a focus on providing popular Hispanic entertaining and informative content as streaming media to the web and mobile devices. The state of the art of video-delivery technology is sophisticated and advanced, and this business is considered a content-licensing and promotion play, where the entity's value grows with viewership. Revenue shall be derived from advertising, subscriptions, and the sale of smartphone applications. Channels will organize content on offer to the widely varying tastes of its markets and individual subscribers, ranging from romance to mystery to science fiction to drama to police procedurals. The content will be a combination of individual segments, serial productions, and motion pictures. On March 17, 2010, we announced that we reached agreement with Los Angeles-based technology company IPTVWorld, Inc., to work as partners in the development and deployment of a broad range of Internet-based services, with a first release of 13 a new product line scheduled for staged release starting in May, 2010. These services will include compelling video programming, including entertainment, information, news, sports, religion, lifestyle, shopping, and country-specific programs. These offerings are anticipated to be made available several ways, including on a subscription basis through television set-top boxes, through web browsers, and, in future versions, through mobile devices. Subscriptions will be offered that are similar to but far less expensive than traditional cable or satellite plans. Also, among the completely integrated Internet services to be offered will be a home telephone service featuring a low-cost international calling component which is expected to be a popular option in the targeted consumer markets. On March 25, 2010, we formed the wholly-owned subsidiaries - Caballo Blanco Communications, Ltd. and Commerce Services, Inc. - as Colorado corporations to conduct these operations. We anticipate that the operations of Caballo Blanco Communications, Ltd. will be housed at One Wilshire, a premier communications hub located in Southern California to assure reliable and fast delivery of our programming. (5) LIQUIDITY AND CAPITAL RESOURCES At March 31, 2010 and December 31, 2009, respectively, the Company had a working capital of approximately $(1,107,000) and $(1,071,000). The Company's current business plan is to focus on offering multimedia and e-commerce to the diverse and growing Hispanic markets within the United States and in other countries. The Company anticipates having two distinct divisions and operating each within a wholly-owned operating subsidiary corporation consisting of a Latino-targeted media delivery service and a bilingual home shopping network. On March 25, 2010, we formed the wholly-owned subsidiaries - Caballo Blanco Communications, Ltd. and Commerce Services, Inc. - as Colorado corporations to conduct these operations. The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis. Further, the Company faces considerable risk in its business plan and a potential shortfall of funding due to any inability to raise capital in the equity securities market. If no additional operating capital is received during the next twelve months, the Company will be forced to rely on existing cash in the bank and additional funds loaned by management and/or significant stockholders. The Company may become dependent upon additional external sources of financing; including being dependent upon its management and/or significant stockholders to provide sufficient working capital in excess of the Company's initial capitalization to preserve the integrity of the corporate entity. The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company. The Company's certificate of incorporation authorizes the issuance of up to 75,000,000 shares of preferred stock and 750,000,000 shares of common stock. The Company's ability to issue preferred stock may limit the Company's ability to obtain debt or equity financing, The Company's ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities. The Company's current controlling stockholder has maintained the corporate status of the Company and has provided all nominal working capital support on the Company's behalf since the December 2008 foreclosure action. Because of the Company's lack of operating assets, its continuance is fully dependent upon the majority stockholder's continuing support. It is the intent of this controlling stockholder to continue the funding the nominal necessary expenses to sustain the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding. Further, the Company is at the mercy of future economic trends and business operations for this controlling stockholder to have the resources available to support the Company. Should this pledge fail to provide financing, the Company has not identified any alternative sources of working capital to support the Company. In such a restricted cash flow scenario, the Company would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities. Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market. While the Company is of the opinion that good faith estimates of the Company's ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps. 14 Regardless of whether the Company's cash assets prove to be inadequate to meet the Company's operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash. (6) CRITICAL ACCOUNTING POLICIES Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (GAAP). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements. Our significant accounting policies are summarized in Note D of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report. (7) EFFECT OF CLIMATE CHANGE LEGISLATION The Company currently has no known or identified exposure to any current or proposed climate change legislation which could negatively impact the Company's operations or require capital expenditures to become compliant. Additionally, any currently proposed or to-be-proposed-in-the-future legislation concerning climate change activities, business operations related thereto or a publicly perceived risk associated with climate change could, potentially, negatively impact the Company's efforts to identify an appropriate target company which may wish to enter into a business combination transaction with the Company. ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company may be subject to certain market risks, including changes in interest rates and currency exchange rates. At the present time, the Company does not undertake any specific actions to limit those exposures. ITEM 4 - CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2010. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to our Company required to be included in our reports filed or submitted under the Exchange Act. (b) Changes in Internal Controls There were no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the quarter ended March 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 15 PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS The Company may become involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters should not have an adverse material impact either individually or in the aggregate on results of operations, financial position or cash flows of the Company. ITEM 2 - RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS In March 2010, the Company issued an aggregate 3,902,439 shares of restricted, unregistered common stock in connection with the redemption of $32,000 in convertible debenture debt. As the conversion price was below the "fair value" of the securities issued, the Company experienced a non-cash charge to operations of approximately $57,760 which will be classified as "interest expense" in the financial statements for the quarter ended March 31, 2010. ITEM 3 - DEFAULTS ON SENIOR SECURITIES None. ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company has held no regularly scheduled, called or special meetings of stockholders during the reporting period. ITEM 5 - OTHER INFORMATION None ITEM 6 - EXHIBITS 31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002 32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 - -------------------------------------------------------------------------------- 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 Dated: April 28, 2010 By: /s/ Haviland Wright -------------- ------------------------------------------- Haviland Wright Chairman, Chief Executive Officer, Acting Chief Financial Officer and Director 16 EX-31.1 2 ex31-1.txt SECTION 302 CERTIFICATION EXHIBIT NO. 31.1 The X-Change Corporation File No. 002-41703 Form 10-Q Quarter ended March 31, 2010 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Haviland Wright, certify that: 1. I have reviewed this report on Form 10-Q for the quarter ended March 31, 2010 of The X-Change Corporation; 2. Based on my knowledge, this 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 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 officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: April 28, 2010 By: /s/ Haviland Wright -------------- ------------------------------ Haviland Wright Chief Executive Officer and Acting Chief Financial Officer EX-32.1 3 ex32-1.txt SECTION 906 CERTIFICATION EXHIBIT NO. 32.1 The X-Change Corporation File No. 002-41703 Form 10-Q Quarter ended March 31, 2010 CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - CHIEF EXECUTIVE AND ACTING CHIEF FINANCIAL OFFICER In connection with the Quarterly Report of The X-Change Corporation (Company) on Form 10-Q for the period ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (Report), I, Haviland Wright, Chief Executive and Acting Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, adopted as pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (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. Dated: April 28, 2010 By: /s/ Haviland Wright -------------- ------------------------------ Haviland Wright Chief Executive Officer and Acting Chief Financial Officer - -------------------------------------------------------------------------------- A signed original of this written statement required by Section 906 has been provided to The X-Change Corporation and will be retained by The X-Change Corporation and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----