##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly period ended September 30, 2006
 Commission File No. 000-50764
 Across America Real Estate Corp.
  Colorado
    
    20-0003432(State or other jurisdiction 
of incorporation)
    
    (IRS Employer File Number)1660 17th Street, Suite 450Denver, Colorado
    
    80202(Address of principal executive offices)
    
    (zip code)
 (303) 893-1003
 þ o
 o þ
  o þ
    1




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##### 



FORM 10-QSB
Across America Real Estate Corp.
 TABLE OF CONTENTS
 PagePART I    FINANCIAL INFORMATIONItem 1.    Financial Statements for the period ended September 30, 2006Condensed Consolidated Balance Sheet (Unaudited)
    
    
    3Condensed Consolidated Statements of Operations (Unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows (Unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    6Item 2.    Managements Discussion and Analysis and Plan of Operation
    
    
    17Item 3.    Controls and Procedures
    
    
    24PART II    OTHER INFORMATION
    
    
    25Item 1.    Legal Proceedings
    
    
    25Item 2.    Changes in Securities
    
    
    25Item 3.    Defaults Upon Senior Securities
    
    
    25Item 4.    Submission of Matters to a Vote of Security Holders
    
    
    25Item 5.    Other Information
    
    
    25Item 6.    Exhibits and Reports on Form 8-K
    
    
    26Signatures
    
    
    27Exhibit 21Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I
    
    FINANCIAL INFORMATION
  
 ITEM 1.
    
    FINANCIAL STATEMENTS
 
 
 AssetsCash and equivalents
    
    $
    4,874,646Escrow deposits (Note 4)
    
    
    955,118Accounts receivable, net (Note 4)Related party
    
    
    60,478Employee advance
    
    
    583Property and equipment, net of accumulated depreciation (Note 5)
    
    
    31,074Construction in progress (Note 2)
    
    
    2,506,843Land held for development (Note 2)
    
    
    7,829,318Current tax asset (Note 7)
    
    
    242,390Deposits
    
    
    18,583Total assets
    
    $
    16,519,033Liabilities and Shareholders EquityLiabilitiesAccounts payable
    
    $
    45,367Accrued liabilities
    
    
    54,798Indebtedness to related party (Note 3)
    
    
    8,007,622Note payable (Note 10)
    
    
    2,155,304Capital lease obligation (Note 9)
    
    
    10,837Security deposit
    
    
    10,000Deferred tax liability (Note 7)
    
    
    67,593Unearned revenue
    
    
    128,183Total liabilities
    
    
    10,479,704Shareholders equity (Note 6)Noncontrolling interest (Note 14)
    
    
    8,681Convertible preferred stock, $.10 par value; 517,000 shares authorized,
517,000 shares issued and outstanding
    
    
    51,700Common stock, $.001 par value; 50,000,000 shares authorized,
16,036,625 shares issued and outstanding
    
    
    16,037Additional paid-in-capital
    
    
    6,314,238Retained earnings
    
    
    (351,327
    )Total shareholders equity
    
    
    6,039,329Total liabilities and shareholders equity
    
    $
    16,519,033
   3




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue:Sales
    
    $
    
    
    
    $
    848,628
    
    
    $
    1,723,000
    
    
    $
    848,628Sales, related parties (Note 2)
    
    
    5,050,000
    
    
    
    
    
    
    
    5,050,000
    
    
    
    Rental income (Note 2)
    
    
    98,694
    
    
    
    38,300
    
    
    
    367,690
    
    
    
    80,951Management fees
    
    
    32,725
    
    
    
    256,490
    
    
    
    59,725
    
    
    
    256,490Total revenue
    
    
    5,181,419
    
    
    
    1,143,418
    
    
    
    7,200,415
    
    
    
    1,186,069Operating expenses:Cost of Sales
    
    
    
    
    
    
    848,613
    
    
    
    1,462,848
    
    
    
    848,613Cost of Sales  related parties (Note 2)
    
    
    4,767,622
    
    
    
    
    
    
    
    4,767,622
    
    
    
    Selling, general and administrative
    
    
    512,843
    
    
    
    183,293
    
    
    
    1,143,337
    
    
    
    429,043Total Operating expenses
    
    
    5,280,465
    
    
    
    1,031,906
    
    
    
    7,373,807
    
    
    
    1,277,656Income/(loss) from operations
    
    
    (99,046
    )
    
    
    111,512
    
    
    
    (173,392
    )
    
    
    (91,587
    )Non-operating expense:Interest Income
    
    
    482
    
    
    
    
    
    
    
    482
    
    
    
    Interest Expense
    
    
    (127,915
    )
    
    
    (58,921
    )
    
    
    (363,803
    )
    
    
    (101,968
    )Income/(loss) before income taxes
and noncontrolling interest
    
    
    (226,479
    )
    
    
    52,591
    
    
    
    (536,713
    )
    
    
    (193,555
    )Income tax provision
    
    
    (54,041
    )
    
    
    
    
    
    
    (196,439
    )
    
    
    Income/(loss) before noncontrolling interest
    
    
    (172,438
    )
    
    
    52,591
    
    
    
    (340,274
    )
    
    
    (193,555
    )Noncontrolling interest in income of
consolidated subsidiaries
    
    
    (2,867
    )
    
    
    (2,498
    )
    
    
    (92,357
    )
    
    
    Net income/(loss)
    
    $
    (175,305
    )
    
    $
    50,093
    
    
    $
    (432,631
    )
    
    $
    (193,555
    )Basic and diluted income/(loss) per share
    
    
    (0.01
    )
    
    
    0.00
    
    
    
    (0.03
    )
    
    
    (0.01
    )Basic and diluted weighted average common
shares outstanding
    
    
    16,036,625
    
    
    
    16,036,625
    
    
    
    16,036,625
    
    
    
    16,036,625
   4




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Nine Months EndedSeptember 30,2006
    
    
    2005Cash flows from operating activities:Net (loss)
    
    $
    (432,631
    )
    
    $
    (193,555
    )Cash restricted for project development
    
    
    258,818
    
    
    
    (785,668
    )Adjustments to reconcile net income to net cash used by operating activities:Depreciation
    
    
    5,629
    
    
    
    966Changes in current assets and current liabilities:Construction in progress
    
    
    (1,339,028
    )
    
    
    (609,439
    )Real estate held for sale
    
    
    4,855,790
    
    
    
    (2,125,656
    )Land held for development
    
    
    (2,834,900
    )
    
    
    (7,739,748
    )Accounts receivable
    
    
    44,564
    
    
    
    Accounts payable and accrued liabilities
    
    
    (109,941
    )
    
    
    178,360Income tax assets and liabilities
    
    
    (224,415
    )
    
    
    Indebtedness to related party
    
    
    150,000
    
    
    
    Net cash (used in) operating activities
    
    
    373,886
    
    
    
    (11,274,740
    )Cash flows from investing activities:Payments for deposits
    
    
    276
    
    
    
    (13,133
    )Payments for property and equipment
    
    
    (7,514
    )
    
    
    (3,322
    )Issuance of notes receivable
    
    
    (489,958
    )
    
    
    (404,375
    )Unearned Revenue
    
    
    128,183
    
    
    
    Proceeds from repayment of notes receivable
    
    
    25,000
    
    
    
    80,000Security deposit
    
    
    
    
    
    
    Net cash (used in) investing activities
    
    
    (344,013
    )
    
    
    (340,830
    )Cash flows from financing activities:Distributions received from members, net
    
    
    15,846
    
    
    
    Proceeds from sale of convertible preferred stock
    
    
    6,204,000
    
    
    
    Proceeds from related party loans (Note 3)
    
    
    5,488,688
    
    
    
    8,985,247Repayment of related party loans (Note 3)
    
    
    (6,046,546
    )
    
    
    (2,312,432
    )Proceeds from note payable (Note 10)
    
    
    2,901,598
    
    
    
    4,415,365Repayment of note payable (Note 10)
    
    
    (3,897,893
    )
    
    
    Repayment of lease obligation (Note 9)
    
    
    (1,416
    )
    
    
    Net cash provided by financing activities
    
    
    4,664,277
    
    
    
    11,088,180Net change in cash
    
    
    4,694,150
    
    
    
    (527,390
    )Cash and equivalents, beginning of period
    
    
    180,496
    
    
    
    527,390Cash and equivalents, end of period
    
    $
    4,874,646
    
    
    $
    Supplemental disclosure of cash flow information:Cash paid during the period for:Income taxes
    
    $
    
    
    
    $
    Interest
    
    $
    1,155,680
    
    
    $
    
   5




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(1)
    
    Nature of Organization and Summary of Significant Accounting Policies
     Name of Subsidiary
    
    OwnershipCCI Southeast, LLC (CCISE)
    
    
    100.00
    %AARD-Belle Creek, LLC (Belle Creek)
    
    
    100.00
    %CCI Corona, LLC (CCI Corona)
    
    
    100.00
    %AARD-Greeley-Lot 3, LLC (Greeley)
    
    
    100.00
    %Riverdale Carwash Lot 3A, LLC (Riverdale)
    
    
    100.00
    %Across America Real Estate Exchange, Inc.
    
    
    100.00
    %Across America Financial Services, Inc.
    
    
    100.00
    %Cross Country Properties II, LLC (CCPII)
    
    
    80.00
    %AARD-Stonegate, LLC (Stonegate)
    
    
    51.00
    %AARD-Charmar-Olive Branch, LLC (Olive Branch)
    
    
    51.00
    %AARD-Cypress Sound, LLC (Cypress Sound)
    
    
    51.00
    %AARD-TSD-CSK Firestone, LLC (Firestone)
    
    
    51.00
    %South Glen Eagles Drive, LLC(West Valley)
    
    
    51.00
    %119th and Ridgeview, LLC (Ridgeview)
    
    
    51.00
    %53rd and Baseline, LLC (Baseline)
    
    
    51.00
    %Hwy 278 and Hwy 170, LLC (Bluffton)
    
    
    51.00
    %State and 130th, LLC (American Fork)
    
    
    51.00
    %Clinton Keith and Hidden Springs, LLC (Murietta)
    
    
    51.00
    %Hwy 46 and Bluffton Pkwy, LLC (Bluffton 46)
    
    
    51.00
    %AARD Bader Family Dollar Flat Shoals, LLC
    
    
    51.00
    %AARD Westminster OP7, LLC (Westminster)
    
    
    51.00
    %Eagle Palm I, LLC (Eagle)
    
    
    51.00
    %AARD Econo Lube Stonegate, LLC (Econo Lube)
    
    
    51.00
    %AARD Bader Family Dollar MLK, LLC (MLK)
    
    
    51.00
    %L-S Corona Pointe, LLC (L-S Corona)
    
    
    50.01
    %Cross Country Properties III, LLC (CCPIII)
    
    
    50.00
    %
   6




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(2)
    
    Real Estate Development Projects
  Riverdale
    Stonegate
    7




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Cypress Sound
 Ridgeview  th
 Bluffton 278
  8




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American Fork  th
 Laveen  rd
 Bluffton 46
 West Valley
 AARD Stonegate Econolube
  9




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(3)
    
    Related Party Transactions
      10




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GDBA
    
    
    BOCOSenior Subordinated Note
    
    $
    3,500,000
    
    
    $
    3,500,000Subordinated Revolving Note
    
    $
    507,622
    
    
    $
    500,000Total
    
    $
    4,007,622
    
    
    $
    4,000,000
 (4)
    
    Notes Receivable and Development Deposits
  (5)
    
    Property and Equipment
  Equipment
    
    $
    20,443Furniture and fixtures
    
    
    6,270Computers and related equipment
    
    
    12,47739,190Less accumulated depreciation
    
    
    (8,116
    )$
    31,074
   11




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(6)
    
    Shareholders Equity


Preferred Stock


Common Stock
  12




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(7)
    
    Income Taxes
  Current:Federal
    
    $
    (232,715
    )State
    
    
    (31,317
    )(264,032
    )Deferred:Federal
    
    
    59,719State
    
    
    7,87467,593Total income tax provision
    
    $
    (196,439
    )
  Tax at US federal statutory rates
    
    $
    (213,832
    )State income taxes, net of federal
    
    
    (28,416
    )(242,248
    )Change in beginning deferred balance
    
    
    45,809Total income tax benefit
    
    $
    (196,439
    )
  Deferred tax assets:Deferred revenue
    
    $
    109,432Prepaid expense
    
    
    3,160Depreciation
    
    
    2,201Deferred tax liability:Revenue
    
    
    (77,030
    )Capital gains
    
    
    (52,724
    )Prepaid expense
    
    
    (52,632
    )Net deferred income tax liability
    
    $
    (67,593
    )
  (8)
    
    Operating Lease Commitments
 
  December 31,2006
    
    $
    12,438
  13




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(9)
    
    Capital Lease Obligations
   December 31,2006
    
    $
    6932007
    
    
    2,7722008
    
    
    2,7722009
    
    
    2,7722010
    
    
    2,079$
    11,088Less imputed interest
    
    
    251$
    10,837
 (10)
    
    Senior Credit Facilities
      14




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December 31,2006
    
    $
    -0-2007
    
    $
    607,5802008
    
    $
    1,547,724$
    2,155,304
 (11)
    
    Concentration of Credit Risk for Cash
  (12)
    
    Variable Compensation Plan
    15




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(13)
    
    Capitalized Interest and Interest Expense
  (14)
    
    Noncontrolling Interests
  EarningsEarnings allocated
    
    
    disbursed/accruedBalance
    
    
    to Noncontrolling
    
    
    for Noncontrolling
    
    
    BalanceNoncontrolling Interest
    
    January 1, 2006
    
    
    Interest
    
    
    Interest
    
    
    September 30, 2006Firestone
    
    $
    0
    
    
    $
    -106,477
    
    
    $
    106,477
    
    
    $
    0Cypress
    
    
    4,594
    
    
    
    0
    
    
    
    0
    
    
    
    4,594Stonegate
    
    
    -9,843
    
    
    
    2,515
    
    
    
    -937
    
    
    
    -8,265Bluffton
    
    
    478
    
    
    
    2,024
    
    
    
    
    
    
    
    2,502Bluffton 46
    
    
    0
    
    
    
    60
    
    
    
    
    
    
    
    60Laveen
    
    
    0
    
    
    
    298
    
    
    
    
    
    
    
    298West Valley
    
    
    0
    
    
    
    298
    
    
    
    
    
    
    
    298American Fork
    
    
    269
    
    
    
    8,925
    
    
    
    
    
    
    
    9,1940Total
    
    $
    -4,502
    
    
    $
    -92,357
    
    
    $
    105,540
    
    
    $
    8,681
 (15)
    
    Statement of Cash Flows Reclassification from Prior Year
  (16)
    
    Executive Employment Arrangement
   16




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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
  Forward-Looking Statements
  Risk Factors
  WHILE WE HAVE GENERATED A MODEST PROFIT IN OUR LAST TWO FISCAL YEARS, WE WERE UNPROFITABLE IN THE
MOST RECENT FISCAL QUARTER. THERE IS NO GUARANTEE THAT WE WILL CONTINUE TO BE PROFITABLE.
   17




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WE WILL NEED ADDITIONAL FINANCING IN THE FUTURE BUT CANNOT GUARANTEE THAT IT WILL BE AVAILABLE TO
US.
  AS A COMPANY WITH LIMITED OPERATING HISTORY, WE ARE INHERENTLY A RISKY INVESTMENT. OUR OPERATIONS
ARE SUBJECT TO OUR ABILITY TO FINANCE REAL ESTATE PROJECTS.
  WE HAVE A HEAVY RELIANCE ON OUR CURRENT FUNDING COMMITMENT WITH OUR LARGEST SHAREHOLDERS
   18




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WE DO NOT HAVE A LONG HISTORY OF BEING ABLE TO SELL PROPERTIES AT A PROFIT
  THE MANNER IN WHICH WE FINANCE OUR PROJECTS CREATES THE POSSIBILITY OF A CONFLICT OF INTEREST.
  INTENSE COMPETITION IN OUR MARKET COULD PREVENT US FROM DEVELOPING REVENUE AND PREVENT US FROM
ACHIEVING ANNUAL PROFITABILITY.
  OUR SUCCESS WILL BE DEPENDENT UPON OUR MANAGEMENTS EFFORTS.
   19




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OUR STOCK PRICE MAY BE VOLATILE, AND YOU MAY NOT BE ABLE TO RESELL YOUR SHARES AT OR ABOVE THE
PUBLIC SALE PRICE.
  *
    
    actual or anticipated fluctuations in our operating results;*
    
    changes in financial estimates by securities analysts or our failure to perform in line with such
estimates;*
    
    changes in market valuations of other real estate oriented companies, particularly those that
market services such as ours;*
    
    announcements by us or our competitors of significant innovations, acquisitions, strategic
partnerships, joint ventures or capital commitments;*
    
    introduction of technologies or product enhancements that reduce the need for our services;*
    
    the loss of one or more key customers; and*
    
    departures of key personnel.
   BUYING A LOW-PRICED PENNY STOCK SUCH AS OURS IS RISKY AND SPECULATIVE.
   20




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WE DO NOT EXPECT TO PAY DIVIDENDS ON COMMON STOCK
      th
  Results of Operations
   21




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Liquidity and Capital Resources
   22




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Recently Issued Accounting Pronouncements
 Seasonality
 Critical Accounting Policies
  23




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ITEM 3.
    
    CONTROLS AND PROCEDURES
    24




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PART II.
    
    OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
  
 ITEM 2.
    
    CHANGES IN SECURITIES
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5.
    
    OTHER INFORMATION
         25




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ITEM 6.
    
    EXHIBITS AND REPORTS ON FORM 8-K
  21
    
    
    List of Subsidiaries31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a)31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a)32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 Reports on Form 8-K
  26




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ACROSS AMERICA REAL ESTATE CORP.Dated: November 9, 2006
    By:
    /s/ Ann L. SchmittAnn L. SchmittPresident, Chief Executive Officer,Dated: November 9, 2006
    By:
    /s/ James W Creamer IIIJames W Creamer IIITreasurer, Chief Financial Officer  27




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ExhibitNo.
    
    Description21
    
    
    List of Subsidiaries31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a)31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a)32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  28