SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 [x]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
EXCHANGE ACT OF 1934
 
 For the
Quarterly period ended   June 30,
2009
 
 []
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
EXCHANGE ACT OF 1934
 Commission
File No. 0-52533
 
 Across America Real Estate
Exchange, Inc.
 (Exact
Name of Issuer as specified in its charter)
 
 Colorado
                    20-8097439(State
      or other jurisdiction
                    (IRS
      Employer File Number)of
      incorporation)123
      North College Ave, Suite 200Fort Collins, Colorado
                    80524(Address
      of principal executive offices)
                    (zip
      code)
 
 (970)
530-0325
 (Registrant's
telephone number, including area code)
 
 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
[X]  No [ ]
 
 Indicate
by check mark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of “large
accelerated filer,” “accelerated filer,” and “small reporting company” in Rule
12b-2 of the Exchange Act.
 
 Large
      accelerated filer
      []
              Accelerated
      filer []Non-accelerated
      filer [] (Do not check if a smaller reporting company)
              Smaller
      reporting company  [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 [
]
  The
number of shares outstanding of the Registrant's common stock, as of the latest
practicable date, August  12, 2009, was
1,810,476.
  
  
  
 FORM
10-Q
 Across
America Real Estate Exchange, Inc.
 
 TABLE OF
CONTENTS
 
 
 
 PART
      I  FINANCIAL INFORMATIONItem
      1. Financial StatementsCondensed
      Balance Sheets at June 30, 2009 (Unaudited) and December 31,
      2008
                                3Condensed
      Statements of Operations (Unaudited) for the quarters ended June
      30,
                                  2009
      and 2008, for the six months ended June 30, 2009 and 2008 and for
      the
                                  period
      December 1, 2005 (inception) through June 30, 2009
                                4Condensed
      Statement of Shareholders’ Equity (Unaudited) for the period
      from
                                  December
      31, 2008 through June 30, 2009
                                5Condensed
      Statements of Cash Flows (Unaudited) for the six months ended June
      30,
                                  2009
      and 2008 and for the period December 1, 2005 (inception) through June
      30,
                                  2009
                                6Notes to the Condensed Financial Statements
                                7Item
      2. Management’s Discussion and Analysis and Plan of
    Operation
                                10Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk
                                11Item
      4. Controls and Procedures
                                11Item
      4T. Controls and Procedures
                                12PART
      II  OTHER INFORMATIONItem
      1. Legal Proceedings
                                12Item
      1A. Risk Factors
                                12Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                                14Item
      3. Defaults Upon Senior Securities
                                14Item
      4. Submission of Matters to a Vote of Security Holders
                                14Item
      5. Other Information
                                14Item
      6. Exhibits
                                15Signatures
                                16
  
  -
2 -
  
 
 PART
I  FINANCIAL INFORMATION
 
 References
in this document to "us," "we," or "Company" refer to Across America Real Estate
Exchange, Inc.
 
 ITEM
1.  FINANCIAL STATEMENTS
  
 Across
      America Real Estate Exchange, Inc.(A
      Development Stage Company)Condensed
      Balance SheetsAt
      June 30, 2009 and December 31, 2008(Unaudited)June
      30,
                                      
                                      
                                      December
      31,2009
                                      
                                      
                                      2008(Unaudited)AssetsCash
      and cash equivalents  (note 1)
                                      
                                      $
                                      25,603
                                      
                                      
                                      $
                                      39,712Prepaid
      expenses
                                      
                                      
                                      3,148
                                      
                                      
                                      
                                      1,902Total
      assets
                                      
                                      $
                                      28,751
                                      
                                      
                                      $
                                      41,614Liabilities
      and Shareholders' DeficitLiabilitiesAccounts
      payable
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Accrued
      liabilities  (note 1)
                                      
                                      $
                                      3,600
                                      
                                      
                                      $
                                      8,300Note
      payable, related party  (note 2)
                                      
                                      
                                      143,153
                                      
                                      
                                      
                                      135,298Total
      liabilities
                                      
                                      
                                      146,753
                                      
                                      
                                      
                                      143,598Shareholders'
      deficit (note 3)Preferred
      stock, $.10 par value; 1,000,000 shares authorized,-0-
      shares issued and outstanding
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Common
      stock, $.001 par value; 50,000,000 shares authorized,1,810,476
      shares issued and outstanding
                                      
                                      
                                      1,810
                                      
                                      
                                      
                                      1,810Additional
      paid-in-capital
                                      
                                      
                                      24,614
                                      
                                      
                                      
                                      24,614Deficit
      accumulated during development stage
                                      
                                      
                                      (144,426
                                      )
                                      
                                      
                                      (128,408
                                      )Total
      shareholders' deficit
                                      
                                      
                                      (118,002
                                      )
                                      
                                      
                                      (101,984
                                      )Total
      liabilities and shareholders' deficit
                                      
                                      $
                                      28,751
                                      
                                      
                                      $
                                      41,614
  The accompanying notes are an integral part of these
condensed financial statements.
  -
3 -
  
 
 Across
      America Real Estate Exchange, Inc.(A
      Development Stage Company)Condensed
      Statements of OperationsFor
      the quarters ended June 30, 2009 and 2008 and for thesix
      months ended June 30, 2009 and 2008 and for theperiod
      from December 1, 2005 (inception) to June 30, 2009(Unaudited)
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    December
      1,2005(Inception)For
      the three months ended
                                    
                                    
                                    For
      the six months ended
                                    
                                    
                                    ThroughJune
      30,
                                    
                                    
                                    June
      30,
                                    
                                    
                                    June
      30,2009
                                    
                                    
                                    2008
                                    
                                    
                                    2009
                                    
                                    
                                    2008
                                    
                                    
                                    2009Operating
      expenses:Selling,
      general and administrative
                                    
                                    $
                                    3,824
                                    
                                    
                                    $
                                    3,867
                                    
                                    
                                    $
                                    8,163
                                    
                                    
                                    $
                                    11,858
                                    
                                    
                                    $
                                    93,260Total
      operating expenses
                                    
                                    
                                    3,824
                                    
                                    
                                    
                                    3,867
                                    
                                    
                                    
                                    8,163
                                    
                                    
                                    
                                    11,858
                                    
                                    
                                    
                                    93,260Loss
      from operations
                                    
                                    
                                    (3,824
                                    )
                                    
                                    
                                    (3,867
                                    )
                                    
                                    
                                    (8,163
                                    )
                                    
                                    
                                    (11,858
                                    )
                                    
                                    
                                    (93,260
                                    )Non-operating
      expense:Interest
      expense, beneficial conversion (note 2)
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (24,000
                                    )Interest
      expense, related party (note 2)
                                    
                                    
                                    (3,949
                                    )
                                    
                                    
                                    (3,612
                                    )
                                    
                                    
                                    (7,855
                                    )
                                    
                                    
                                    (5,856
                                    )
                                    
                                    
                                    (27,166
                                    )Loss
      before income taxes
                                    
                                    
                                    (7,773
                                    )
                                    
                                    
                                    (7,479
                                    )
                                    
                                    
                                    (16,018
                                    )
                                    
                                    
                                    (17,714
                                    )
                                    
                                    
                                    (144,426
                                    )Net
      loss
                                    
                                    $
                                    (7,773
                                    )
                                    
                                    $
                                    (7,479
                                    )
                                    
                                    $
                                    (16,018
                                    )
                                    
                                    $
                                    (17,714
                                    )
                                    
                                    $
                                    (144,426
                                    )Basic
      and diluted loss per share
                                    
                                    $
                                    (0.00
                                    )
                                    
                                    $
                                    (0.00
                                    )
                                    
                                    $
                                    (0.01
                                    )
                                    
                                    $
                                    (0.01
                                    )Basic
      and diluted weighted average commonshares
      outstanding
                                    
                                    
                                    1,810,476
                                    
                                    
                                    
                                    1,810,476
                                    
                                    
                                    
                                    1,810,476
                                    
                                    
                                    
                                    1,810,476
  The
accompanying notes are an integral part of these condensed financial
statements.
  -
4 -
  
 
 Across
      America Real Estate Exchange, Inc.(A
      Development Stage Company)Condensed
      Statement of Changes in Shareholders' DeficitFor
      the period December 31, 2008 through June 30, 2009(Unaudited)DeficitAccumulatedPreferred
      Stock
                        
                        
                        Common
      Stock
                        
                        
                        Additional
                        
                        
                        DuringPar
                        
                        
                        
                        
                        
                        Par
                        
                        
                        Paid-in
                        
                        
                        DevelopmentShares
                        
                        
                        Value
                        
                        
                        Shares
                        
                        
                        Value
                        
                        
                        Captial
                        
                        
                        Stage
                        
                        
                        TotalBalance
      at December 31, 2008
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        
                        1,810,476
                        
                        
                        $
                        1,810
                        
                        
                        $
                        24,614
                        
                        
                        $
                        (128,408
                        )
                        
                        $
                        (101,984
                        )Net
      loss, for the six months endedJune
      30, 2009
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (16,018
                        )
                        
                        
                        (16,018
                        )Balance
      at June 30, 2009
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        
                        1,810,476
                        
                        
                        $
                        1,810
                        
                        
                        $
                        24,614
                        
                        
                        $
                        (144,426
                        )
                        
                        $
                        (118,002
                        )
  The
accompanying notes are an integral part of these condensed financial
statements.
  -
5 -
 
 
 
 Across America Real Estate Exchange,
      Inc.(A
      Development Stage Company)Condensed
      Statements of Cash FlowsFor
      the six months ended June 30, 2009 and 2008 and for the period
      fromDecember
      1, 2005 (inception) to June 30, 2009(Unaudited)December
      1,2005(Inception)For
      the six months ended
                                  
                                  
                                  ThroughJune
      30,
                                  
                                  
                                  June
      30,2009
                                  
                                  
                                  2008
                                  
                                  
                                  2009Cash
      flows from operating activities:Net
      loss
                                  
                                  $
                                  (16,018
                                  )
                                  
                                  $
                                  (17,714
                                  )
                                  
                                  $
                                  (144,426
                                  )Adjustments
      to reconcile net loss to net cash used by operating
      activities:Warrant
      expense  (note 4)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  424Benefical
      conversion on convertible debt  (note 2)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  24,000Changes
      in operating assets and operating liabilities:Prepaid
      expenses
                                  
                                  
                                  (1,246
                                  )
                                  
                                  
                                  (1,246
                                  )
                                  
                                  
                                  (3,148
                                  )Accounts
      payable and accrued liabilities
                                  
                                  
                                  3,155
                                  
                                  
                                  
                                  3,654
                                  
                                  
                                  
                                  14,753Net
      cash (used in) operating activities
                                  
                                  
                                  (14,109
                                  )
                                  
                                  
                                  (15,306
                                  )
                                  
                                  
                                  (108,397
                                  )Cash
      flows from financing activities:Proceeds
      from sale of common stock
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2,000Proceeds
      from note payable, related party (note 2)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  15,000
                                  
                                  
                                  
                                  132,000Net
      cash provided by financing activities
                                  
                                  
                                  -
                                  
                                  
                                  
                                  15,000
                                  
                                  
                                  
                                  134,000Net
      change in cash
                                  
                                  
                                  (14,109
                                  )
                                  
                                  
                                  (306
                                  )
                                  
                                  
                                  25,603Cash
      and cash equivalents, beginning of period
                                  
                                  
                                  39,712
                                  
                                  
                                  
                                  3,761
                                  
                                  
                                  
                                  —Cash
      and cash equivalents, end of periood
                                  
                                  $
                                  25,603
                                  
                                  
                                  $
                                  3,455
                                  
                                  
                                  $
                                  25,603Supplemental
      disclosure of cash flow information:Cash
      paid during the period for:Income
      taxes
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  —Interest
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  4,512
                                  
                                  
                                  $
                                  16,012
  The
accompanying notes are an integral part of these condensed financial
statements.
  -
6 -
  ACROSS
AMERICA REAL ESTATE EXCHANGE, INC.
 (A
Development Stage Company)
 Notes
to the Condensed Financial Statements
 (Unaudited)
 
 
 
 (1) 
Nature of Organization and Summary of Significant Accounting
Policies
 
 Nature
of Organization and Basis of Presentation
 
 Across
America Real Estate Exchange, Inc. (the “Company”, or “Real Estate Exchange”)
was incorporated in the state of Colorado on December 1, 2005 and was formerly a
wholly-owned subsidiary of Across America Real Estate Corp. (“AARD”). The
Company commenced operations on November 9, 2006, after the approval of its
business plan.
 
 The
Company is a development stage enterprise in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by
Development Stage Enterprises”. The Company was organized to facilitate the
exchange of real estate properties between individuals through the use of
Section 1031 of the Internal Revenue Code. It plans to act as a “Qualified
Intermediary” for a fee to facilitate these exchanges.
 
 The
accompanying interim condensed financial statements have been prepared pursuant
to the rules of the Securities and Exchange Commission (the "SEC") for quarterly
reports on Form 10-Q and do not include all of the information and note
disclosures required by generally accepted accounting principles. These
financial statements and notes herein are unaudited, but in the opinion of
management, include all the adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the Company’s financial
position, results of operations, and cash flows for the periods presented. These
financial statements should be read in conjunction with the Company's audited
financial statements and notes thereto included in the Company’s Form 10-K for
the year ended December 31, 2008 as filed with the SEC. Interim operating
results are not necessarily indicative of operating results for any future
interim period or for the full year.
 
 
 (2)  
Income Taxes
 
 The
Company records its income taxes in accordance with SFAS No. 109, “Accounting
for Income Taxes”. The Company incurred net operating losses during all periods
presented resulting in a deferred tax asset, which was fully allowed for;
therefore, the net benefit and expense resulted in $-0- income
taxes.
 
  (3) 
 Related Parties
 
 Promissory
Note and Warrants
 In
January 2007, Safe Harbor I, LLC., formerly known as Safe Harbor Business
Development Company (“Safe Harbor”), a related party controlled by the Company’s
president, agreed to provide the Company operating capital in the form of a loan
of $250,000. This loan is evidenced by an unsecured promissory note dated
January 12, 2007. The note carries a 15% interest rate and matured on January
12, 2008. The Company extended the maturity date by one year to January 12,
2009.  Included with the extension is a renewal fee equal to 1.5% of
the outstanding principal balance as of January 12, 2008. Interest payments are
due every 90 days and any payments not received by the due date will incur a
default interest rate of 24%. On October 16, 2008, we paid off the
principal and accrued interest due on our loan to Safe Harbor Development
Company, as assigned to Safe Harbor 1, LLC. At the same time, we entered into a
loan arrangement with West Mountain Prime, LLC., which is affiliated with our
President, Mr. Klemsz. We borrowed $132,000 from West Mountain Prime, LLC to
provide operating capital to cover operating expenses. This loan is evidenced by
an unsecured promissory note (the “Note”) which is now due October 16, 2009,
unless converted. All principal and interest accrues until the Note is due or
converted. The applicable interest rate on the Note is 12% per annum except in
the event that we fail to convert any portion of the principal and pay the
interest due in which case the applicable rate on the Note shall thereafter be
18% per annum.At
any time prior to the due date of the Note, all outstanding principal under the
Note may, at the sole option of the Holder, be converted into our common shares
equal to the outstanding principal amount of the note divided by
..22.
 
 As the
fair market value of common stock was determined to be $0.26 per share at time
of the convertible note issuance, the convertible promissory note carries an
imbedded beneficial conversion feature.  The intrinsic value of the
beneficial conversion feature related to the note holder’s option for conversion
into the Company’s common stock totals $24,000.  As the conversion feature
is available at any time before the note becomes due, the full amount of the
beneficial conversion feature was recorded as interest expense, beneficial
conversion at the time of issuance.
  -
7 -
  ACROSS
AMERICA REAL ESTATE EXCHANGE, INC.
 (A
Development Stage Company)
 Notes
to the Condensed Financial Statements
 (Unaudited)
 
 
 On
January 12, 2007, the Company issued Safe Harbor warrants to purchase 200,000
shares of the Company’s common stock at a price of $.01 per share. The warrants
expire five years from the date of issuance.
 
 
 As
      of  June 30, 2009Principal
                    
                    $
                    132,000Accrued
      interest
                    
                    
                    11,153$
                    143,153
  
 (4)  
Stockholders’ Equity
 
 On
January 10, 2007, the directors of AARD approved, subject to the effectiveness
of a registration with the Securities and Exchange Commission, a spin off to its
shareholders of record as of March 1, 2007 (the “Record Date”), on a pro rata
basis, with one share each of Real Estate Exchange to be issued for each ten
shares issued and outstanding of common stock or common stock upon conversion of
AARD preferred stock owned by such AARD shareholders as of the Record Date.
Since AARD’s business is related to the proposed activities of Real Estate
Exchange, the AARD directors decided it was in the best interest of AARD and
Real Estate Exchange and AARD’s shareholders to spin-off Real Estate Exchange to
minimize any potential of conflict of interest.
 
 The spin-off was completed on March 21,
2007. As of June 30, 2009 the total shares issued and outstanding is 1,810,476.
The remaining 189,524 shares after the spin-off were cancelled and the par value
of those shares is reflected in additional paid-in capital in the amount of
$190.
  
 (5)  
Warrant Expense
 
 On
January 12, 2007, the Company issued Safe Harbor warrants to purchase 200,000
shares of the Company’s common stock at a price of $.01 per share. The warrants
expire five years from the date of issuance.
 
 The fair
value of the each warrant was calculated on the grant date of January 12, 2007
using the Black-Scholes model and was valued at $0.0021 using the following
assumptions and inputs:
 
 Quarter
      endedJune
      30,2009Risk
      free interest rate
                  
                  
                  4.76
                  %Expected
      life
                  
                  
                  5.0Dividend
      yield
                  
                  
                  0.00
                  %Expected
      volatility
                  
                  
                  0.00
                  %Fair
      Value
                  
                  $
                  0.0021
 
  There are
a number of assumptions and estimates used in calculating the fair value of
warrants. These include the expected term of the warrant, the expected
volatility and the risk free interest rate. These assumptions are included in
the charts above. The basis for our expected volatility and expected term
estimates is a combination of our historical information. The risk-free interest
rate is based upon yields of U.S. Treasury strips with terms equal to the
expected life of the warrants or award being valued. Across America Financial
Services, Inc. does not currently pay a dividend on its common stock , nor does
the Company expect to pay a dividend on its common stock.
 
 We accrue
the warrant expense in the period in which the warrants are issued. The total
amount of compensation calculated for the full amount of warrants granted and
accrued is $424. This expense was recorded in Selling, general and
administrative on the Statements of Operations.
  -
8 -
   ACROSS
AMERICA REAL ESTATE EXCHANGE, INC.
 (A
Development Stage Company)
 Notes
to the Condensed Financial Statements
 (Unaudited)
 
 
 Warrant
activity through the quarter ended June 30, 2009 is summarized as
follows:
 
 Warrants
      Outstanding
                                                  
                                                  Warrants
      ExercisableNumber
                                                    of
                                                    Warrants
                                                  
                                                  Weighted
                                                    Average
                                                    Exercise
      Price
                                                  
                                                  Weighted
                                                    Remaining
                                                    Contractual
      Term
                                                  
                                                  Aggregate
                                                    Intrinsic
      Value
                                                  
                                                  Shares
                                                    Exercisable
                                                  
                                                  Weighted
      Average
                                                    Exercise
      Price
                                                  
                                                  Weighted
                                                    Remaining
                                                    Contractual
      Term
                                                  
                                                  Aggregate
                                                    Intrinsic
      ValueBalance
      at December 31,2008
                                                  
                                                  
                                                  200,000
                                                  
                                                  0.01
                                                  
                                                  
                                                  3.0
                                                  
                                                  -
                                                  
                                                  
                                                  200,000
                                                  
                                                  0.01
                                                  
                                                  
                                                  3.0
                                                  
                                                  -Activity
      during 2009:Granted
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -Expired/Cancelled
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -Forfeited
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -Exercised
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  -Balance,
      at June 30, 2009
                                                  
                                                  
                                                  200,000
                                                  
                                                  0.01
                                                  
                                                  
                                                  2.5
                                                  
                                                  -
                                                  
                                                  
                                                  200,000
                                                  
                                                  0.01
                                                  
                                                  
                                                  2.5
                                                  
                                                  -
   -
9 -
  ITEM
2.    MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF
OPERATION
 
 The
following discussion of our financial condition and results of operations should
be read in conjunction with, and is qualified in its entirety by, the
consolidated financial statements and notes thereto included in, Item 1 in this
Quarterly Report on Form 10-Q.  This item contains forward-looking
statements that involve risks and uncertainties.  Actual results may
differ materially from those indicated in such forward-looking
statements.
 
 Forward-Looking
Statements
  This
Quarterly Report on Form 10-Q and the documents incorporated herein by reference
contain forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of
1995.  Such forward-looking statements are based on current
expectations, estimates, and projections about our industry, management beliefs,
and certain assumptions made by our management.  Words such as
“anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”,
variations of such words, and similar expressions are intended to identify such
forward-looking statements.  These statements are not guarantees of
future performance and are subject to certain risks, uncertainties, and
assumptions that are difficult to predict; therefore, actual results may differ
materially from those expressed or forecasted in any such forward-looking
statements.  Unless required by law, we undertake no obligation to
update publicly any forward-looking statements, whether as a result of new
information, future events, or otherwise.  However, readers should
carefully review the risk factors set forth herein and in other reports and
documents that we file from time to time with the Securities and Exchange
Commission, particularly the Report on Form 10-K, and Annual Reports on Form
10-K, Quarterly reports on Form 10-Q and any Current Reports on Form
8-K.
  Overview
and History
  We were
formed under the laws of the State of Colorado on December 1, 2005. Until March
23, 2007, we were a wholly-owned subsidiary of Across America Real Estate
Corp.(“AARD”).
 
 On
January 10, 2007, the directors of AARD approved, subject to the effectiveness
of a registration with the Securities and Exchange Commission, the pro rata
spin-off of Real Estate Exchange to AARD shareholders of record on March 1, 2007
on a pro rata basis. Since AARD’s business is related to the proposed activities
of Real Estate Exchange, the AARD directors decided it was in the best interest
of AARD and Real Estate Exchange and AARD’s shareholders to spin-off Real Estate
Exchange to minimize any potential of conflict of interest.
  The
shares of Real Estate Exchange were owned by AARD, who distributed our shares to
the AARD shareholders on or about March 23, 2007.
  Our
principal business address is 123 North College Ave, Suite 200, Fort Collins,
Colorado 80524. We are a development stage company.  Our
development stage began when we approved our business plan on November 9, 2006.
Our plan is to facilitate the exchange of real estate properties between
individuals through the use of Section 1031 of the Internal Revenue
Code.
  We have
not been subject to any bankruptcy, receivership or similar
proceeding.
 
 Results
of Operations
 The
following discussion involves our results of operations for the three
months and six months ended June 30, 2009 and June 30, 2008 and from
inception through June 30, 2009.  We had no revenues for the three
months ended June 30, 2009 or for the three months ended June 30,
2008.  We had no revenues for the six months ended June 30, 2009 or
for the six months ended June 30, 2008. We had no revenues from inception
through June 30, 2009.
 
 We had no
Cost of Sales during those periods.
 Selling,
general and administrative costs were $3,824 for the three months ended June 30,
2009, compared to $3,867 for the three months ended June 30,
2008.  Selling, general and administrative costs were $8,163 for the
six months ended June 30, 2009, compared to $11,858 for the six months ended
June 30, 2008.  Selling, general and administrative costs were $93,260
from inception through June 30, 2009. Most of the costs were attributable
professional fees relating to filing of the quarterly
reports.   We believe .that our selling, general and
administrative costs will increase as we grow our business activities going
forward.
 
 We had a
net loss of $7,773 for the three months ended June 30, 2009 compared to a net
loss of $7,479 for the three months ended June 30, 2008. We had a net loss
of $16,018  for the six months ended June 30, 2009 compared to a net
loss of $17,714 for the six months ended June 30, 2008. We had a net loss
of $144,426 from inception through June 30, 2009. The losses in each
year over year period reflect higher start up costs to develop our business
plan.
 Liquidity
and Capital Resources
 
 Our cash
balance on June 30, 2009 was $25,603. This compares to a cash balance of
$3,455 on June 30, 2008.  We plan to generate operating cash by acting
as a Qualified Intermediary in Section 1031 Exchanges. We will be dependent
on our ability to market our services in order to generate revenue for our
operations.
 
 We had
cash used in operating activities  of $14,109 for the six months ended
June 30, 2009.  We had cash used in operating activities  of
$15,306 for the six months ended June 30,
2008.
  -
10 -
  We had
cash used or provided by financing activities of $-0- for the six months
ended June 30, 2009, compared to cash provided by financing activities of
$15,000 for the six months ended June 30, 2008.
 
 No cash
was used or provided for investing activities during the relevant
periods.
 Management
continues to assess our capital resources in relation to its ability to fund
continued operations on an ongoing basis.  As such, management may
seek to access the capital markets to raise additional capital through the
issuance of additional equity, debt or a combination of both in order to fund
our operations and growth.
 
 Plan
of Operation for December 31, 2008 to December 31, 2009
 
 We intend
to facilitate the exchange of real estate properties between individuals through
the use of Section 1031 of the Internal Revenue Code. Real Estate Exchange acts
as a “Qualified Intermediary” for a fee to facilitate these exchanges. Through a
Section 1031 Exchange, the tax on the gain is deferred until some future
date.
 
 Our
operating costs are expected to range between $30,000 and $50,000 for the fiscal
year ending December 31, 2009. These operating costs include insurance, taxes,
utilities, maintenance, contract services and all other costs of operations.
However, the operating costs and expected revenue generation are difficult to
predict. We expect to generate revenues in the next twelve months from Section
1031 exchange transactions using referrals from AARD and unrelated individuals
and entities that operate in the real estate exchange business. We will use
contract employees who will be paid on a per transaction basis as each real
estate exchange is closed. Since there can be no assurances that revenues will
be sufficient to cover operating costs for the foreseeable future, it may be
necessary to raise additional funds. Due to our lack of operating history,
raising additional funds may be difficult. In January, 2008, an organization
named Safe Harbor, I, LLC, formerly known as Safe Harbor Business Development
Company (“Safe Harbor”), which is controlled by our former President, Mr.G.
Brent Backman, agreed to provide operating capital in the form of a loan of
$250,000 to cover operating expenses. This loan is evidenced by an unsecured
promissory note which was due January 23, 2009. Effective October 16, 2008, we
paid off the principal and accrued interest due on our loan to Safe Harbor. At
the same time, we entered into a loan arrangement with West Mountain Prime,
LLC., which is affiliated with our President, Mr. Klemsz. We borrowed $132,000
from West Mountain Prime, LLC to provide operating capital to cover operating
expenses. This loan is evidenced by an unsecured promissory note (the “Note”)
which is now due October 16, 2009, unless converted. All principal and interest
accrues until the Note is due or converted. If we are unable to raise funds to
cover any operating deficit after fiscal year ending December 31, 2009, our
business may fail.
 
 We
generated no revenues through June 30, 2009, and management does not anticipate
any revenues until December, 2009.
 
 Seasonality
 
 Our
revenues are not impacted by seasonal demands for our products or
services.
 
 Critical
Accounting Policies
 
 The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires us to
make a number of 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.  Such estimates and assumptions
affect the reported amounts of revenues and expenses during the reporting
period.  On an ongoing basis, we evaluate estimates and assumptions
based upon historical experience and various other factors and
circumstances.  We believe our estimates and assumptions are
reasonable in the circumstances; however, actual results may differ from these
estimates under different future conditions.
 
 We
believe that the estimates and assumptions that are most important to the
portrayal of our financial condition and results of operations, in that they
require subjective or complex judgments, form the basis for the accounting
policies deemed to be most critical to us.  These relate to bad debts,
impairment of intangible assets and long lived assets, contractual adjustments
to revenue, and contingencies and litigation.  We believe estimates
and assumptions related to these critical accounting policies are appropriate
under the circumstances; however, should future events or occurrences result in
unanticipated consequences, there could be a material impact on our future
financial conditions or results of operations.
 
 ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
 
 None.
 
 ITEM
4. CONTROLS AND PROCEDURES
 
 Not
applicable.
  -
11 -
  .
 
 ITEM
4T. CONTROLS AND PROCEDURES
 
 As of the
end of the period covered by this report, based on an evaluation of our
disclosure controls and procedures (as defined in Rules 13a -15(e) and
15(d)-15(e) under the Exchange Act), our Chief Executive Officer and the Chief
Financial Officer each have concluded that our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in our Exchange Act reports is recorded, processed, summarized, and reported
within the applicable time periods specified by the SEC’s rules and
forms.
 
 There
were no changes in our internal controls over financial reporting that occurred
during our most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
 
 This
report does not include an attestation report of the company’s registered public
accounting firm regarding internal control over financial reporting. Identified
in connection with the evaluation required by paragraph (d) of Rule 240.13a-15
or Rule 240.15d-15 of this chapter that occurred during the registrant’s last
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting.
 
 PART
II.  OTHER INFORMATION
 
 ITEM
1.  LEGAL PROCEEDINGS
 
 There are
no legal proceedings, to which we are a party, which could have a material
adverse effect on our business, financial condition or operating
results.
 
 ITEM
1A. RISK FACTORS
  You
should carefully consider the risks and uncertainties described below; and all
of the other information included in this document. Any of the following risks
could materially adversely affect our business, financial condition or operating
results and could negatively impact the value of your investment.
  The occurrence of any of the
following risks could materially and adversely affect our business, financial
condition and operating result. In this case, the trading price of our common
stock could decline and you might lose all or part of your
investment.
 
 If we do not
generate adequate revenues to finance our operations, our
business may
fail.
 
 We have
not generated revenues from our inception. As of June 30, 2009, we had a cash
position of $25,603. Operating costs are expected to range between $30,000 and
$50,000, for the fiscal year ending December 31, 2009. These operating costs
include insurance, taxes, utilities, maintenance, contract services and all
other costs of operations. We will use contract employees who will be paid on a
per transaction basis as each real estate exchange is closed. However, the
operating costs and expected revenue generation are difficult to predict. We
expect to generate revenues in the next twelve months from Section 1031 exchange
transactions using referrals from AARD and unrelated individuals and entities
that operate in the real estate exchange business. Since there can be no
assurances that revenues will be sufficient to cover operating costs for the
foreseeable future, it may be necessary to raise additional funds. Due to our
lack of operating history, raising additional funds may be difficult. In
January, 2008, an organization named Safe Harbor Business Development Company
(“Safe Harbor”), which is affiliated with our President, Mr. Klemsz, and our
largest shareholder, GDBA Investments, LLLP, agreed to provide operating capital
in the form of a loan of $250,000 to cover operating expenses. This loan is
evidenced by an unsecured promissory note which was due January 23, 2009.
Effective October 16, 2008, we paid off the principal and accrued interest due
on our loan to Safe Harbor. At the same time, we entered into a loan arrangement
with West Mountain Prime, LLC., which is affiliated with our President, Mr.
Klemsz. We borrowed $132,000 from West Mountain Prime, LLC to provide operating
capital to cover operating expenses. This loan is evidenced by an unsecured
promissory note (the “Note”) which is now due October 16, 2009, unless
converted. All principal and interest accrues until the Note is due or
converted. If we are unable to raise funds to cover any operating deficit after
fiscal year ending December 31, 2009, our business may fail.
 
 Because we had
incurred a loss and have no current operations, our
accountants have expressed
doubts about our ability to continue as a going concern.
 
 For the
fiscal year ended December 31, 2008, our accountants have expressed doubt about
our ability to continue as a going concern as a result of lack of history of
operations, limited assets, and operating losses since inception. Our ability to
achieve and maintain profitability and positive cash flow is dependent
upon:
 
 our
ability to locate clients who will use our real estate intermediary services;
and
 
 our
ability to generate revenues.
  -
12 -
  
 
 Based
upon current plans, we expect to incur operating losses in future periods
because we will be incurring expenses and not generating sufficient revenues. We
expect our operating costs to range between $30,000 and $50,000 for the fiscal
year ending December 31, 2009. We cannot guarantee that we will be successful in
generating sufficient revenues or other funds in the future to cover these
operating costs. Failure to generate sufficient revenues will cause us to go out
of business.
 
 The lack of a
broker or dealer to create or maintain a market in our stock could adversely
impact the price and liquidity of our securities.
 
 We have
no agreement with any broker or dealer to act as a market maker for our
securities and there is no assurance that we will be successful in obtaining any
market makers. Thus, no broker or dealer will have an incentive to make a market
for our stock. The lack of a market maker for our securities could adversely
influence the market for and price of our securities, as well as your ability to
dispose of, or to obtain accurate information about, and/or quotations as to the
price of, our securities.
 
 As our stock will
not be listed on Nasdaq or another national exchange, trading in our shares
will be subject to rules governing “penny stocks,” which will impair trading
activity in our shares.
 
 As we do
not intend to list our stock on Nasdaq or another national exchange, our stock
will therefore be subject to rules adopted by the Commission regulating broker
dealer practices in connection with transactions in “penny stocks.” Those
disclosure rules applicable to “penny stocks” require a broker dealer, prior to
a transaction in a “penny stock” not otherwise exempt from the rules, to deliver
a standardized list disclosure document prepared by the Commission. That
disclosure document advises an investor that investment in “penny stocks” can be
very risky and that the investor’s salesperson or broker is not an impartial
advisor but rather paid to sell the shares. The disclosure contains further
warnings for the investor to exercise caution in connection with an investment
in “penny stocks,” to independently investigate the security, as well as the
salesperson with whom the investor is working and to understand the risky nature
of an investment in this security. The broker dealer must also provide the
customer with certain other information and must make a special written
determination that the “penny stock” is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the transaction. Further, the
rules require that, following the proposed transaction, the broker provide the
customer with monthly account statements containing market information about the
prices of the securities.
 
 These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for our common stock. Many brokers may be
unwilling to engage in transactions in our common stock because of the added
disclosure requirements, thereby making it more difficult for stockholders to
dispose of their shares. You will also find it difficult to obtain accurate
information about, and/or quotations as to the price of, our common
stock.
 
 Issuances of our
stock could dilute current shareholders and adversely affect the market price
of our common stock, if a public trading market develops.
 
 We have
the authority to issue up to 50,000,000 shares of common stock, 1,000,000 shares
of preferred stock, and to issue options and warrants to purchase shares of our
common stock without stockholder approval. Although no financing is planned
currently, we may need to raise additional capital to fund operating losses. If
we raise funds by issuing equity securities, our existing stockholders who
receive shares in the spin-off may experience substantial dilution. In addition,
we could issue large blocks of our common stock to fend off unwanted tender
offers or hostile takeovers without further stockholder approval.
 
 The
issuance of preferred stock by our board of directors could adversely affect the
rights of the holders of our common stock. An issuance of preferred stock could
result in a class of outstanding securities that would have preferences with
respect to voting rights and dividends and in liquidation over the common stock
and could, upon conversion or otherwise, have all of the rights of our common
stock. Our board of directors’ authority to issue preferred stock could
discourage potential takeover attempts or could delay or prevent a change in
control through merger, tender offer, proxy contest or otherwise by making these
attempts more difficult or costly to achieve.
 
 Colorado law and
our Articles of Incorporation protect our directors from certain types of
lawsuits, which could make it difficult for us to recover damages from them
in the event of a lawsuit.
 
 Colorado
law provides that our directors will not be liable to our company or to our
stockholders for monetary damages for all but certain types of conduct as
directors. Our Articles of Incorporation require us to indemnify our directors
and officers against all damages incurred in connection with our business to the
fullest extent provided or allowed by law. The exculpation provisions may have
the effect of preventing stockholders from recovering damages against our
directors caused by their negligence, poor judgment or other circumstances. The
indemnification provisions may require our company to use our assets to defend
our directors and officers against claims, including claims arising out of their
negligence, poor judgment, or other circumstances.
 
  -
13 -
  Competition
in the real estate exchange industry is intense.
 
 Our
primary business plan involves facilitating real estate exchanges under Section
1031 of the Internal Revenue Code. This business is highly competitive. There
are numerous similar companies providing such services in the United States of
America. Our competitors will have greater financial resources and more
expertise in this business. Our ability to obtain revenue from facilitating real
estate exchanges under Section 1031 of the Internal Revenue Code will depend on
our ability to successfully market our services in this highly competitive
environment. We cannot guarantee that we will be able to do so
successfully.
 
 The share control
position of the Mr. Backman, our former President, will limit the ability of
other shareholders to
influence corporate actions.
 
 After
distribution of our shares to the AARD shareholders, an entity controlled by our
former President, Mr. Backman, owns approximately 1,178,144 shares and thereby
controls approximately 65% of our outstanding shares. Because the entity will
beneficially control more than a majority of the outstanding shares, other
shareholders, individually or as a group, will be limited in their ability to
effectively influence the election or removal of our directors, the supervision
and management of our business or a change in control of or sale of our company,
even if they believed such changes were in the best interest of our shareholders
generally.
 
 Our future
success depends, in large part, on the continued service of
our President.
 
 We depend
almost entirely on the efforts and continued employment of Mr. Brian L. Klemsz,
our current President. Mr. Klemsz is our primary executive officer, and we will
depend on him for nearly all aspects of our operations. In addition, a company
affiliated with Mr. Klemsz is our only source of financing. We do not have an
employment contract with Mr. Klemsz , and we do not carry key person insurance
on the life of either. The loss of the services of Mr. Klemsz, through
incapacity or otherwise, would have a material adverse effect on our business.
It would be very difficult find and retain qualified personnel such as Mr.
Klemsz and a financing source to replace the one we currently have.
 
 ITEM 2. UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
 None
  
 ITEM
3.  DEFAULTS UPON SENIOR SECURITIES
  None
 
 ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  None
 
 ITEM
5.  OTHER INFORMATION
 
 None
  -
14 -
  
 ITEM
6.  EXHIBITS
 
 Exhibits
 
 3.1
                    Articles
      of Incorporation *3.2
                    Bylaws*4.1
                    Warrant
      dated January 23, 2008 for Safe Harbor Development
  Company*10.1
                      10.2
                    Promissory
      Note dated January 23, 2008 with Safe Harbor Development
      Company*
                      Promissory
      Note dated October 16, 2008 with West Mountain Prime,
  LLC**31.1
                    Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Rule
      13a-14(a)/15(d)-14(a)32.1
                    Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002
 
 *
Previously filed with Form SB-2 Registration Statement, January 29,
2008.
 **
Previously filed with Form 8-K, November 7, 2008.
 
 Reports on Form
8-K
 
 We filed
no report under cover of Form 8K for the fiscal quarter ended June 30,
2009.
  -
15 -
  
 
 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 thereunto
duly authorized on August 14, 2009.
 
 ACROSS
      AMERICA REAL ESTATE EXCHANGE, INC.,
                  a  Colorado
      corporationBy:
                /s/ Brian
      L. KlemszBrian
      L. Klemsz, President, Chief Executive Officer,
                  Chief
      Financial Officer and Director (Principal Executive,
                  Accounting
      and Financial Officer)
 - 16
-