SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 2004
The X-Change Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 0-41703 43-1594165
- --------------------------- -------------------------- -------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
100 Allentown Parkway
Suite 204
Allen, TX 75002
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 390-0750
ITEM 1. CHANGE IN CONTROL.
Formation of Air Gate Technologies and Entry into RFID Market:
On February 9, 2004, registrant, The X-Change Corporation, a Nevada corporation
("XCHC"), formed a wholly owned subsidiary, Air Gate Technologies, Inc. ("Air
Gate"), for the purpose of engaging in the development and acquisition of
leading-edge wireless internet/networking technologies, principally RFID ("radio
frequency identification"). Air Gate is proposing to market products and
services of unsurpassed convenience, performance, reliability and value in this
industry in order to provide customers with innovative wireless RFID solutions
at a cost substantially lower than current implementations.
Of the many technologies currently undergoing development, management feels
wireless technologies, including RFID, qualify as the most likely to have a
transformative effect on business in the near-term, essentially transforming how
business operates and organizes. Wireless technologies will generate not only
new consumer and business products but also entirely new categories of products
and services.
Wireless technologies are currently transforming the culture of industrialized
countries and have the potential to do the same for developing and undeveloped
regions of the world. The migration to third-generation cellular-phone
technologies, proceeding in fits and starts and at various rates throughout the
world, continues to change how people communicate. RFID tags are optimizing
business supply chains. A plethora of wireless local-area network (WLAN)
standards compete for market share in a variety of applications and niches as
newcomers such as ultrawideband applications continue to be developed. The rapid
market acceptance of cellular phones and WLANs, including "hotspots" has focused
attention on the viability of traditional telecom providers and the cost of
wireline technologies.
Concurrent with the formation of Air Gate, Mr. Mike Sheriff was engaged by XCHC
and Air Gate to act as their Chairman of the board of directors and chief
executive officer, president and treasurer. Mr. Sheriff, in exchange for his
services, has received an option to purchase up to 12,000,000 shares of common
stock at the market therefore on the date of his engagement. These options and
the underlying shares are not registered. The share structure of XCHC was
adjusted by several shareholders so that the number of shares outstanding
immediately prior to the formation of Air Gate was brought down to 13,000,000 in
number.
Industry Analysis: RFID:
Radio frequency identification (RFID) and Electronic Product Code (EPC)
technologies are being implemented to improve supply chain efficiency and reduce
shrinkage by providing more accurate tracking of goods and assets throughout the
chain. RFID are being used to replace the bar codes now used to identify
products. Many large retailers, including Wal-Mart, have recently announced
their intentions to move over to RFID technology in the near future. RFID allows
these companies to track their products using radio-frequency identification
tags that can be scanned by radio waves at any time. Recently, there has been a
groundswell of RFID-related products and services from IT providers. Microsoft,
Intel, IBM and Sun Microsystems have joined vendors such as Texas Instruments,
Symbol Technologies, NCR, Accenture and Bearing Point in advocating the
technology as the solution for optimizing supply chain operations.
An RFID tag is a chip that, even in its simplest form, is superior to standard
bar codes. It can contain information such as a product's expiration date and
temperature, and it can be scanned from a distance of up to 30 feet. This makes
it a lot easier for a retailer to find products in a warehouse and keep track of
what condition they're in -- big advantages when it comes to managing inventory.
Management believes 2004 will be a crucial year for radio frequency
identification (RFID), with large-scale deployments bringing the controversial
technology into the mainstream. Manufacturers and distributors of RFID are
working to meet the requirements of high-profile deployments from organizations
including Wal-Mart and the US Department of Defense, according to IDC.
Normally, innovations in retail industry and Department of Defense do not
typically converge. However, the Radio Frequency Identification (RFID)
technology is creating precisely the convergence that is about to create a
unique set of business opportunities.
The Retail Industry and the Department of Defense, constitute the largest global
entities, those procure thousands of parts and supplies. Both `industries' have
mandated that RFID technology become an inherent part of their operations. With
such a large, organized and funded push, RFID is slated to become the
`e-barcode' or the electronic barcode of the future.
Numerous `drivers' are motivating a change of this magnitude, to enumerate a
few: accurate and automated inventory management, accurate and secure shipping
financial accounting along with comprehensive Home Land Security management and
tracking.
Three powerful, compelling and disruptive forces are converging to propel us to
an RFID enabled world: the build-out of ubiquitous wireless networks, the
absolute needs of Homeland Security and the mandates from deeply funded
entities: Department of Defense and WalMart, the largest retail chain in the
world.
RFID may lead to universal identifier; wherein distinct `entities' ranging from
humans - RFID embedded driver license, a can of Campbell soup, or airline travel
tickets or individualized and customized drug-prescription formulation and
dispensing have embedded RFID technology.
The simplicity of and Zero-power requirement of an RFID electronic tag has made
it technically and financially feasible to usher in a world of universal
identification.
As a result, of the oncoming RFID tsunami, business opportunities are being
created in multiple and diverse vertical industries: from wireless `sensors' to
high-speed data links to RFID tag fabrication and finally to the computer
systems that will be needed to `ingest' vast amounts of scan data, that has
never before existed, and moreover, integrate and evolve current business
systems.
Once retailers get involved, the number of tags in use will jump from the
millions to billions, predicts Bill Allen, a marketing manager at TI, which has
sold RFID chips for 15 years. "The supply chain has long been considered the
holy grail for RFID," he says. That explains why the $1 billion market for
RFID-specific hardware, software, and services could balloon to $3.2 billion by
2008, says Erik Michielsen, senior analyst at tech consultancy ABI Research in
Oyster Bay, N.Y.
New technologies must be invented, adapted, and marketed in order to gain
mind-share, customer-share and revenue share. A strong cycle of innovation is
about to be unleashed that will inevitably create a long, sustained period of
business acquisitions of fast moving, young start-up technology savvy companies.
The analyst group of IDC predicts that RFID spending for the US retail supply
chain will grow from $91.5 million in 2003 to nearly $1.3 billion in 2008. The
IDC study, US RFID for the Retail Supply Chain Spending Forecast and Analysis,
2003-2008 expects hardware purchases to dominate RFID spending over the forecast
period, reaching $875 million in 2007. Software spending will accelerate in the
second half of the forecast period as more and more companies feel the need for
RFID middleware, an Airgate strong point.
Air Gate's Business Model:
Key Business Differentiators:
Airgate Technologies' business model consists of several key differentiators
that, management feels, will set it apart from its competition. Airgate
Technologies' focus is to create long-term shareholder value by: (1) Pursuing
intelligent, opportunistic acquisitions of other wireless opportunities whose
business plan and operations are complementary; (2) Consolidating redundant
functions, such as network operations, billing and accounting and customer
support; standardizing on technology and selected vendors; (3) Partnering with
wireless and RFID solution providers, both hardware and software; (4) Partnering
with industry organizations, highlighting AGTI wireless solutions; and (5)
Building a recognizable brand identity.
Wireless Connectivity:
AirGate will offer, for purposes of employing its RFID solutions, a wireless,
high-speed alternative to the costly and time consuming DSL, ADSL, cable modem,
and T-1 plans in use today, implementing the 802.11b and 802.11a/g WiFi standard
and gravitating to and implementing the 801.16 standard. WiFi is an open
standard that enables wireless connectivity with a local area network and/or
high-speed access to the Internet. Like other dislocating technologies, WiFi is
pervading wireless applications.
Because of the growing pervasiveness of the technology, Air Gate's technological
innovations in RFID can be immediately deployed.
Advantages:
Mobility:
Wireless LAN and RFID implementation provide users with access to real-time
information anywhere in their organization. This mobility supports productivity
and service opportunities not possible with a wired network and barcodes.
Installation Speed, Simplicity and Flexibility:
Installing a wireless LAN system is comparatively less time consuming and
difficult and reduces costs 50 to 80 percent over traditional wired solutions.
Companies can eliminate the need to pull cable through walls and ceilings.
Wireless technology allows the network to go where wires cannot go. The
LAN/Internet can now be accessed from all over the building, corporate campus or
user environment. Relocation of employees within a facility takes minutes
instead of days to complete. Productivity is enhanced.
Reduced Cost-of-Ownership:
In most cases, the initial investment required for 802.11a/b/g Wireless hardware
is no higher than the cost of wired LAN hardware. In additional, the overall
installation expense and life cycle costs can be significantly lower. Long-term
cost benefits are the greatest in dynamic environments requiring frequent moves
and changes. This is especially applicable to RFID deployments. The low cost of
the wireless technology and the expected rapid decline in RFID as standards
formalize makes upgrades easier for the Company as improvements are made in
hardware. The high cost of infrastructure for the larger companies inhibits
their ability to modify their systems.
Scalability:
Wireless LAN/Internet access systems can be configured in a variety of
topologies to meet the needs of specific applications and installations of RFID.
Configurations are easily changed and range from peer-to-peer networks suitable
for a small number of users to full infrastructure networks of thousands of
users roaming over a broad area, as in open campus environments or large
production facilities.
Ease of Use:
Users are logged on to the LAN/Internet with the usual familiar access
protocols, so using the LAN/Internet is easy with the appropriate WiFi tools
Wireless LAN Benefits for RFID Implementation:
AirGate has chosen to build its wireless solution on the 802.11a/b/g with
802.16a support because it offers numerous advantages including:
High-speed data transmission for large files and graphics
Standards-based solution supported by major PC and networking vendors
Ability to use standard laptops, browsers and applications
Wide availability of low-cost, 802.11a/b wireless network cards
($150-250; available from Lucent, Cisco, 3Com, online
retailers and others)
Large coverage areas--one access point covers 20,000 to 50,000 square
feet
802.16 up to 30 miles non line of sight
Ease of installation and use
Applicability across many environments including hospitality/travel,
corporate, retail, manufacturing and residential; applications can be
mixed to maximize utilization of coverage area - an important RFID
consideration License free, no fees, no tariffs; no "last mile.
Typical Applications:
WiFi liberates users from dependence on hard-wired access to the network
backbone; giving them anytime, anywhere network access. This freedom to roam
offers numerous user benefits for a variety of work environments. RFID wireless
networking helps link factory buildings on the outside and factory floor
workstations and data collection devices on the inside; improving database
access for roving supervisors such as production line managers, warehouse
auditors, or construction engineers. In warehouses, mobile stock and inventory
personnel can use mobile, forklift mounted data terminals and notebook computers
to receive and update stock and inventory information and update and maintain
location of stock, pallets and boxes with RFID. RFID enables real-time inventory
tracking and reduces the costs of physical inventory counts.
Transportation/Distribution:
As suggested earlier, RFID systems are uniquely suited for use in the rigorous
rail environment. Field programmable tags permit the full industry standard
12-character identification of each car by type, ownership and serial number.
Tags are attached to the vehicle undercarriage; antennae are installed between
or adjacent to the tracks, and readers or display devices are typically located
within 40 to 100 feet in a wayside hut along with other control and
communications equipment. A primary objective in rail applications is the
improved fleet utilization that permits reductions in fleet size and/or deferral
of investment in new equipment.
Commercial truckers are using RFID systems to monitor access and egress from
terminal facilities. Combined with weigh-in-motion scales, the same systems can
be used for transaction recording at refuse dumps, recycling plants, mines and
similar operations, or for credit transactions at truck stops or service depots.
Industrial:
In the plant environment, RF systems are ideally suited for the identification
of high-unit-value products moving through a tough assembly process (e.g.,
automobile or agricultural equipment production where the product is cleaned,
bathed, painted and baked). RF systems also offer the durability essential for
permanent identification of captive product carriers such as:
Tote boxes, containers, barrels, tubs, and pallets; Tool carriers,
monorail and power, and free conveyor trolleys; and Lift trucks,
towline carts, and automatic guided vehicles.
Primary applications fall into two basic categories:
1. Direct product identification wherein the tag specifically identifies the
item to which it is attached (e.g., by part number or serial number or, in the
case of read/write systems, assembly or process instructions for the item).
2. Carrier identification where content is identified manually (or with a bar
code reader) and fed to the control system along with the carrier's
machine-readable RF "license plate number." Strategically deployed RF readers
accomplish subsequent load tracking.
The automotive industry uses RFID systems to track vehicles through assembly,
where tags must perform even after repeated subjection to temperatures of 150 to
200 C, painting, etc. A primary objective for use of the technology in this
environment is verification of vehicle identity prior to execution of given
assembly tasks. Although manufacturers sequentially track vehicles through
assembly, undetected removal of a single vehicle from the line could be costly.
Because RFID tags need not be "seen" to be read, they can be buried within
pallets, tote boxes, and other containers and provide solid performance for the
life of the carrier. As an example, in a casting operation RF tags are attached
to wire baskets which travel through a variety of degreasing, etching and
cleaning tanks by means of an overhead power and free conveyor - not a job for
optical or magnetic identification media. In a manner similar to carrier
identification, RF tags can be used for tool management. Miniature tags can be
placed within tool heads of various types such as block or Cat V-flange, or even
within items such as drill bits where individual bits can be read and selected
by reader guided robot arms.
RFID systems are used for lift truck and guided vehicle identification in a
number of installations. One approach buries tags at strategic locations
throughout the facility and verifies vehicle location via on-board DC-powered
readers. Other users station readers at the ends of warehouse aisles to monitor
lift truck activity. Here, throughput rates permit multiplexing multiple
antennae per reader.
Security and Access Control:
The movement and use of valuable equipment and personnel resources can be
monitored through RF tags attached to tools, computers, etc. or embedded in
credit-card-size security badges. This type of monitoring also provides an extra
measure of security for personnel working in high-risk areas in case of an
emergency evacuation.
Animal Identification:
Valuable breeding stock, laboratory animals involved in lengthy and expensive
research projects, meat and dairy animals, wildlife, and even prized companion
animals all present unique identification problems that can be solved by
innovative applications of RFID technology.
Management Team:
Michael Sheriff
Michael Sheriff has over twenty-five years of experience in the computer and
telecommunications industry. In 1998 Mr. Sheriff founded Net Access Exchange,
Inc., dba YPAY. YPAY was a new Internet media network that provided advertisers
with a unique and compelling value proposition to reach consumers via the
Internet through use of broadband-like rich media over dial-up connections - the
first broadband over narrowband advertising and entertainment network. YPAY
utilized a patented message delivery system that supports true 1:1 targeting and
allows local businesses, not just large multinational advertisers, to harness
the power of the Internet with multi-media and market-targeting capabilities not
available in any other advertising medium.
YPAY's proprietary technology provided a robust platform that delivered a unique
customer experience. The experience was built around extensive use of rich media
and animated icons that make the service fun and entertaining, including movie
trailers, music videos, and sports highlights. TV-like advertising without
compromising or interfering with the user's Internet connection. YPAY brought
together the effectiveness of rich media advertising and the power of the
Internet as the ultimate 1:1 marketing tool. YPAY's strategy and unique,
software was developed from the beginning to be an advertising solution.
Therefore, YPAY was able to eliminate the problems associated with traditional
web site, browser-based advertising.
In 1995, Mr. Sheriff founded CyberQuest -- a full-service Internet development
company -- focusing its efforts on Internet commerce in the business-to-consumer
and business-to-business marketplaces. The company also developed, implemented
and maintained creative business Web sites, Intranets and databases for client
companies. Under Mr. Sheriff's leadership, the company's Internet e-commerce
flagship, bid4it, as well as its other e-commerce sites, were developed to bring
shopping directly into customers' homes and offices utilizing a revolutionary
new "bid-and-ask" matching technology. Mr. Sheriff sold CyberQuest in October
1998 to a NASD OTC:BB listed company. He then served as CEO of the public
company, CBQ, Inc., as well as being Chairman of the company's Board of
Directors.
In 1994, Mr. Sheriff founded and developed Good Stuff Cheap (GSC), a first to
market Internet-based retail site. The company was the first to use intelligent
shopping agents and was featured in Wired Magazine in December 1994. According
to Point Communications, an Internet survey group, GSC was one of the top five
retail sites on the Internet in 1994. Internet Marketing Association awarded GSC
the top retail site award for December 1995. GSC was also featured on the
Discovery Channel in December 1996.
Mr. Sheriff is also the former founder, President and CEO of Action Fax
International, Inc. Action Fax operates one of the largest public fax networks
in the world with locations in most world airports.
Prior to ActionFax, Mr. Sheriff was the founder and President of First National
Computer Corporation, which pioneered the rental of personal computers. Under
his direction, First National Computer became one of the largest PC rental firms
in the United States.
Mr. Sheriff has held senior sales, marketing and management positions with
National Semiconductor, Northern Telecom, SYCOR, Inc. and SINGER.
Tom Tucker
Tom Tucker has been involved with Internetworking technologies for over 15
years, most recently as a Senior Internet Systems Engineer with Genuity,
formerly known as GTE Internetworking and BBN. While at Genuity he provided
technical both pre- and post-sales support on IP solutions to customers,
architecting IP technology solutions that leveraged Internet technologies
including secure eBusiness hosting, dedicated connectivity, broadband
connectivity, remote access, managed firewall and Virtual Private Networks. Tom
has been instrumental in developing Genuity's Virtual Internet Service Provider
platform and closing many large multi-million dollar sales.
Prior to Genuity, Tom was an Internetworking Architect and then Director of
Intranet Engineering for Associates Information Systems, the information
technology division of Associates First Capital, a $12B diversified financial
services organization recently acquired by Citigroup. While with the Associates,
Tom was instrumental in the acceptance and implementation of Internet and
Intranet solutions throughout the company. Tom directly managed or coordinated
all Intranet development and implementation projects and established technology
standards for internal web platforms and applications.
Prior to the Associates, Tom was Chief Operating Officer for Private Networks,
Inc., PNI. PNI leveraged Internet technologies to provide Extranet services for
affinity groups and trade associations. These Extranets provided global Internet
access and secured Web based communities for communication between the affinity
group and its membership and suppliers of goods and service to those members.
Prior to PNI, Tom was a Senior Technical Architect for SHL Systemhouse, where he
planned and managed systems and network integration projects. Tom worked
directly with customers to define business requirements and strategies for
designing and developing integrated client/server solutions based upon open
systems architectures. Tom also worked with the sales organization to develop
persuasive proposals of targeted technology service offerings in response to
customer requests.
Prior to SHL, Tom spent five years with GTE Directories in progressively
responsible positions. He joined GTE Directories as a Systems Analyst providing
UNIX systems administration and application support.
Frank Kwong
Originally from Hong Kong, Frank Kwong immigrated to the U.S as a teenager. Mr.
Kwong has had a life-long interest in computers, system design and program
development, both as a user and hobbyist. He achieved U.S. citizenship and was
educated as an engineer at the University of Minnesota. In 1976 he began his
career with the Donaldson Corporation as an industrial engineer.
The Econotherm Corporation recruited Mr. Kwong in 1977. He was design engineer
for the company's heat exchanger program. His responsibility included management
of the FORTRAN-based computer design programs in an online time-share
environment.
Mr. Kwong joined the Cabot Corporation in the alloy products fabrication
department as design engineer in 1978. His primary responsibility was ASME coded
design. He obtained his Professional Engineer license in 1979 and was promoted
to Engineering Manager.
In 1982, Mr. Kwong was employed by General Motors' Delco division as project
leader in semiconductor equipment design. He was the system manager for APPLICON
CAD, a leading edge cad/cam development system. During this time, Mr. Kwong
formed Computer Accessory Technology, which sold various TRS-80 products. The
company was formed and operated with the permission of General Motors.
Mr. Kwong served as a staff engineer for GM in Detroit, MI. in 1984, where he
began development of cutting-edge computer applications in image processing.
Based upon needs he saw at GM, Mr. Kwong began development of ASP-db and took
early retirement from GM in 1997. He formed FK & Associates and USIntertech,
Inc. to market ASP-db, which was launched in February 1998. USIntertech is a
technology service company maintaining a faculty of experienced information
technology professionals who deliver results through technology integration
services. The Company is a provider of efficient database solutions. With an
extensive technology background involving a number of Fortune 100
telecommunications and manufacturing companies, USIntertech offers unrivaled and
deliverable solutions.
Frank Kwong received his BSc in Mechanical Engineering in 1974, and his MSc in
1976 from the University of Minnesota. He resides with his family in Plano,
Texas.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
The X-Change Corporation
By: /s/ Michael Sheriff
Title: Chief Executive Officer
Date: February 13, 2004