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XCHC News X-Change Corp. Reports Third Quarter Results

DALLAS--(BUSINESS WIRE)--X-Change Corporation (OTCBB: XCHC) today announced that, for the third quarter ended September 30, 2006, the company achieved revenue of $187,322, compared to revenue of $408,906 in the third quarter of 2005, accounting for the acquisition of AirGATE Technologies, Inc. The company reported a net loss of $445,268, or $.02 per share, in the third quarter of 2006, compared to a net loss of $172,452, or $.01 per share, in the third quarter of the previous year.

For the first nine months of 2006, the company achieved revenue of $862,578, compared to revenue of $414,203 for the first nine months of 2005. The company reported a net loss of $584,482, or $.02 per share, in the first three quarters of 2006, compared to a net loss of $42,862, or $.00 per share, in the same period of the previous year. The 2005 net loss included net income of $161,878 from the discontinued operations of Curado Energy Resources, a wholly owned subsidiary of the company sold on June 30, 2006.

The net loss from continuing operations for the first nine months of 2006 was $574,261, or $.02 per share, compared to a net loss from continuing operations of $204,740, or $.01 per share, for the same period in 2005.

At September 30, 2006, the company had total current assets of $277,672 and a net working capital deficit of $582,029, compared to total current assets of $16,455 and a net working capital deficit of $253,955 at December 31, 2005. Net stockholders' deficit at September 30, 2006 was $510,659 compared to a deficit of $212,534 at December 31, 2005.

As of September 30, 2006 the company had drawn down approximately $633,000 against its $1 million line of credit.

X-Change’s increased net loss in the third quarter of 2006 as compared to the same period last year was primarily the result of a reduction in development contract revenue of over $221,000 and an increase in general and administrative expenses of nearly $118,000.

Looking forward, however, during the next six to nine months the company anticipates that several of the products it has developed on behalf of its corporate partners will begin producing recurring revenue streams. These products include a tool developed for Hexion Specialty Chemicals, Inc. for use in the oil and gas industry, an RFID-based system developed for SECURUS Technologies, Inc. that enables correctional facilities to keep track of prisoners’ collect telephone calls, a product developed for Graco Children's Products, Inc., a Newell Rubbermaid company, and a drill pipe tagging system utilizing surface acoustic wave (SAW) technology.

Additional revenue may arise from AirGATE’s proprietary product authentication system that uses Hitachi’s mu-chip, the smallest RFID chip in the world. The global product authentication system is expected to be announced in the first quarter. It is designed to reduce counterfeiting and diversion of a wide variety of valuable goods, including pharmaceuticals.

X-Change Corporation, through its wholly-owned subsidiary, AirGATE Technologies, Inc. is a leader in unique, vertical market applications utilizing RFID and wireless, intelligent, sensor technology. AirGATE Technologies, a full-solution company, handles business assessment, technology selection, including proprietary AirGATE technology, integration and support. The Company has, in an environment of technology cost compression, built a stable of technology partners that are best in class and span a wide range of solutions to support small, medium and large enterprises. Please visit www.AirGATEtech.com or www.x-changecorp.com for further information.

Forward-Looking Statements

Except for historical information contained herein, the statements made in this release constitute forward-looking statements (including within the meaning of Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934). Such forward-looking statements are based on current expectations that are subject to significant risks and uncertainties that are difficult to predict, including statements regarding the intent, belief or current expectations of the X-Change Corporation, AirGATE Technologies and their respective managements regarding strategic directions, prospects and future results. These forward-looking statements include, among other things, statements regarding future events and the future financial performance of the X-Change Corporation that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to the documents filed by the X-Change Corporation, which are on file with the U.S. Securities and Exchange Commission and may be accessed at http://www.sec.gov or the X-Change Corporation's investor relations web page at http://www.x-changecorp.com/index.html, and specifically the most recent reports on Form 10-K and 10-Q, each as it may be amended from time to time, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The X-Change Corporation disclaims any obligation to update or correct any forward-looking statements made herein due to the occurrence of events after the issuance of this press release.