UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-KSB





(mark
      one)





[x]
            Annual
                Report under Section 13 or 15(d) of the Securities Exchange Act of
                1934





For
      the
      fiscal year ended June 30, 2007





[ 
                ]
            Transition
                Report under Section 13 or 15(d) of the Securities Exchange Act of
                1934





For
      the
      transition period from _____ to _____





Commission
      file number: 0-50993





**LIFE
      EXCHANGE, INC.**


(name
      of
      small business issuer as specified in its charter)




Nevada
              20-2602277(State
                  or other jurisdiction
              (IRS
                  Employee Identification No.)of
                  incorporation or organization)2001
                  Biscayne Boulevard, Suite 2102, Miami, FL
              33137(Address
                  of principal executive offices)
              (zip
                  code)




Issuer's
      telephone number: (866) 907-9766





Securities
      Registered under Section 12(b) of the Act:


None





Securities
      Registered under Section 12(g) of the Act:


Common
      Stock, $0.001 Par Value





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. [ ]





Check
      whether the issuer (1) has filed all reports required to be filed by Section
      13
      or 15(d) of the Securities and Exchange Act of 1934 during the preceding 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  [ ]








Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. [X]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)  Yes [ ]  No [X]





State
      issuer's revenues for its most recent fiscal year - $172,206





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the stock was sold,
      or the average bid and asked prices of such common equity, as of a specified
      date within the past 60 days: September 27, 2007  ($.08) $1,897,200.





(Issuers
      Involved in Bankruptcy Proceedings During the past Five Years)





Check
      whether the issuer has filed all documents and report required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court.Yes [  ]
      No  [  ]





(Applicable
      Only to Corporate Registrants)





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: September 27, 2007 – 176,715,000 shares of
      common stock.





(Documents
      Incorporated by Reference)


None





Transitional
      Small Business Disclosure Format (Check One):   Yes
      [  ]   No [X]





2





Life
      Exchange, Inc.


Form
      10-KSB


Index




PagePart
                  IItem
                  1.
              Description
                  of Business
              4Item
                  2.
              Description
                  of Property
              21Item
                  3.
              Legal
                  Proceedings
              21Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              21Part
                  IIItem
                  5.
              Market
                  for Common Equity and Related  Stockholder Matters and Small
                  Business Issuer Purchases of Equity Securities
              21Item
                  6.
              Management's
                  Discussion and Analysis or Plan of Operation
              22Item
                  7.
              Financial
                  Statements
              29Item
                  8.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              29Item
                  8A.
              Controls
                  and Procedures
              29Part
                  IIIItem
                  9.
              Directors,
                  Executive Officers, Promoters and Control Persons and Corporate
                  Governance; Compliance with Section 16(a) of the Exchange
                  Act
              30Item
                  10.
              Executive
                  Compensation
              31Item
                  11.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              33Item
                  12.
              Certain
                  Relationships and Related Transactions, and Director
                  Independence
              34Item
                  13.
              Exhibits
              34Item
                  14.
              Principal
                  Accountant Fees and Services
              35








3


PART
      I





This
      annual report on Form 10-KSB
      contains forward-looking statements that are based on current expectations,
      estimates, forecasts and projections about the Company, us, our future
      performance, our beliefs and our Management's assumptions. In addition, other
      written or oral statements that constitute forward-looking statements may be
      made by us or on our behalf. Words such as "expects," "anticipates," "targets,"
      "goals," "projects," "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 involve certain risks, uncertainties and assumptions that are
      difficult to predict or assess. Therefore, actual outcomes and results may
      differ materially from what is expressed or forecast in such forward-looking
      statements. Except as required under the federal securities laws and the rules
      and regulations of the SEC, we do not have any intention or obligation to update
      publicly any forward-looking statements after the filing of this Form 10-KSB,
      whether as a result of new information, future events, changes in assumptions
      or
      otherwise.





Item
                1.
            Description
                of Business.





Overview
      and Corporate
      History





Life
      Exchange, Inc. (“we” “us” “Life
      Exchange” “LEI” or “Company”) was incorporated in Delaware in January 2005 to
      develop technology related to a computerized auction process that efficiently
      facilitates the business-to-business sale of life insurance policies in a
      secondary market (hereinafter referred to as “Life Settlement
      Transactions”).





Pursuant
      to that certain Agreement for
      the Exchange of Common Stock dated December 22, 2005 by and among: (a) Life
      Exchange, Inc. a Nevada corporation f/k/a Technology Enterprises, (the
“Issuer”), (b) all of the shareholders of Life Exchange, Inc., a Delaware
      corporation (the “**Shareholders**”), and (c) the Vantage Group
      Ltd., a Delaware corporation (“**Vantage**”), the Issuer issued to
      the Shareholders 120 million shares of its common stock in exchange for 100%
      of
      the outstanding shares of common stock of Life Exchange, Inc. (Delaware) such
      that Life Exchange, Inc. (Delaware) became a wholly-owned subsidiary of Life
      Exchange, Inc. (Nevada Issuer).





Pursuant
      to that certain Stock Purchase
      Agreement dated March 8, 2006 between Life Exchange, Inc. (Nevada Parent) and
      Vantage, Vantage acquired approximately 25% of the capital stock of Life
      Exchange, Inc. (Nevada Parent) in exchange for $320,000.





Pursuant
      to the Nevada and Delaware
      short-form merger rules, on March 29, 2006 Life Exchange, Inc. (Delaware
      subsidiary) merged with and into Life Exchange, Inc. (Nevada Parent), the
      surviving corporation.





On
      March 31, 2006, founder David Dorr,
      assigned to Life Exchange, Inc. all his right title and interest to a Patent
      Application that had been filed with the U.S. Patent office on July 21, 2004,
      patent Application No. 10/895112.





4


On
      April
      20, 2006, Life-Exchange launched version 1.0 of its web-based exchange platform
      to the public and as of July 1, 2006, clients of Life-Exchange had registered
      in
      excess of $500,000,000 in face value worth of life settlement policies onto
      Life-Exchange.





On
      July 7, 2006, Life Exchange entered
      into a note agreement with Vantage Group Ltd. to provide $300,000 of additional
      financing. The note: (a) is unsecured, (b) provides for 7% interest payable
      quarterly, (c) matures on June 1, 2008, and (d) is convertible into shares
      of
      the common stock of Life Exchange. The conversion option is triggered if Life
      Exchange attains revenue of no less than $250,000 for the month ended December
      31, 2006. In such case, the Note may be converted into shares of the Company's
      common stock at a conversion price equal to the lesser of $1.50 (the
“**Conversion Price**”) or (ii) two times the average of the three
      lowest closing prices of the Company's Common Stock on the Pink Sheets (or
      such
      other principal market or exchange where the Common Stock is listed or traded
      at
      the time of conversion) immediately preceding the date of conversion (the
“**Variable Conversion Price**”).





If
      Life Exchange generates monthly
      revenue of no less than $500,000 for the month ended December 31, 2006, the
      Note
      shall be converted into shares of the Company's common stock at a conversion
      price equal to the lesser of (i) the Conversion Price, or (ii) three times
      the
      Variable Conversion Price.





On
      April
      2, 2007, the Company entered into a note agreement with Vantage Group Ltd.
      to
      provide $150,000 of additional financing.  The terms of the note
      provide for 7% interest payable quarterly.  The note is unsecured and
      matures on April 30, 2008, which may be extended to April 30, 2009 at the option
      of the holder.  The requirement to make quarterly interest payments
      through August 31, 2007 was also waived to require interest accrued to be paid
      at maturity.  The note also provides Vantage with conversion rights
      based on the Company attaining certain performance criteria as
      follows.  The note may be converted into shares of the Company’s
      common stock at (i) $0.10 or (ii) fifty percent (50%) of the three lowest
      closing prices of the Company’s Common Stock on the Pink Sheets (or such other
      principal market or exchange where the Common Stock is listed or traded at
      the
      time of conversion) immediately preceding the date of
      conversion.





The
      Viatical and Life Settlement
      Industry





A
      Viatical and/or Life Settlement
      (herein referred to as a “**Life Settlement**”) is the sale to a
      third party of an existing life insurance policy for more than its cash
      surrender value but less than its net death benefit. The insurance industry
      generally uses the term Viatical Settlement to refer to a transaction involving
      the terminally or chronically ill insured and the term Life Settlement to refer
      to a transaction involving an insured who is not terminally or chronically
      ill,
      but generally over the age of sixty five (65).





The
      U.S. secondary market for life
      insurance policies has experienced phenomenal growth over the past several
      years. While some $50 million in policy face value was the subject of life
      settlements in 1990 (1), according
      to
      some estimates that figure rose to approximately $3 billion in the late 1990's
      (2). According
      to public reports, we estimate that the total face value of viatical and life
      settlement transactions completed during 2005 was approximately $8.0
      billion(3).
      Public estimates for the face value of transactions to be conducted in 2006
      range between $9 and $14 billion (4).




________________________________________


(1)  Carrie
      Coolidge, Death Wish Investors in Insurance Policies for the Terminally Ill
      are
      Watching Their Capital Get Annihilated, FORBES (March 19, 2001).


(2)  Erich
      W. Sippel and Alan H. Buerger, A Free Market for Life Insurance Contingencies
      (Mar. 2002) (citing studies by Erich Sippel & Company and the Viatical
      Association of America).


(3)  Dafina
      Dunmore, Our Take On The Secondary Market For Life Insurance Consumers Get
      More
      Choice, and we Don’t Think Insurers Will Take a Big Hit, Morningstar (June 16,
      2006) (citing studies by A.M. Best & Company).


(4)  Holman
      W. Jenkins Jr., Life Insurers Face The Future, Grudgingly, the Wall Street
      Journal (August 9, 2006) (citing studies by Sanford C. Bernstein &
Co.).




5




While
      the dollar volume of the life
      settlement industry is significant, the number of industry participants is
      not.
      At present, there are approximately 35 institutional buyers and 50 major brokers
      representing sellers of life settlement policies in the U.S. Indeed, it is
      the
      unique size of this marketplace which makes it possible for Life-Exchange to
      potentially capture the majority of all transactions between buyers and
      sellers.





Life
      settlement buyers, also known as
“providers”, purchase policies from policyholders for immediate cash settlement.
      Once a provider acquires a policy, the providers continue to pay the policy
      premiums until the death of the insured, at which time they collect the policy's
      proceeds. Some life settlement providers negotiate directly with policyholders,
      but the majority of Life Settlement transactions are conducted through a life
      settlement broker. Most states require providers to be licensed in the states
      in
      which they purchase policies. Many providers are well-financed by large
      institutional investors. Not only does this institutional backing provide a
      secure funding source for secondary market transactions, but it also provides
      the highest degree of consumer protection with regard to privacy and
      confidentiality.





Life
      settlement sellers, also known as
“**brokers**”, act on behalf of the policyholders in order to
      secure the highest price from the sale of the policyholder's life insurance
      policy. Life settlement brokers work with the insured, the policy owner, their
      life insurance agents, and/or financial planners. In an attempt to secure the
      highest price for a policyholder, brokers will typically present a life
      insurance policy to multiple providers. Brokers are required to collect and
      prepare critical policy information and medical records on the insured for
      use
      in evaluating the value a policyholder's life insurance policy.





An
      important industry group is the Life
      Insurance Settlement Association (LISA). This industry association promotes
      self-regulation of the industry, and advises and recommends regulations to
      governing bodies. They also lobby for new laws and regulations to help protect
      the consumer and keep fraud out of the industry.





Our
      Products and
      Services





Life-Exchange
      is an Internet-based,
      business-to-business exchange for the life settlement industry. By providing
      a
      secure, feature rich, electronic trading platform specifically designed for
      life
      settlements, Life-Exchange addresses many of the inefficiencies and difficulties
      currently facing the industry.





Licensed
      brokers, on behalf of their
      clients, register and submit to Life-Exchange information and documentation
      on
      life insurance policies which they are seeking to sell. Life-Exchange provides
      brokers a means by which to shop their client's policies to the entire community
      of buyers and sell them to the highest bidder. Our automated listing and auction
      processes encourage bidding on policies as it allows more buyers into the
      marketplace, and thus, Life-Exchange helps to create greater value for policy
      owners.





6


On
      the buy side of the transaction
      process, licensed providers register and list the criteria that they use in
      evaluating the feasibility of purchasing life insurance policies through
      Life-Exchange. Life-Exchange allows providers to significantly cut their
      operating costs by providing a means to sort and filter through thousands of
      policies in minutes - not months; and thus focus their resources on just those
      policies most appropriate to their needs.





After
      a policy has been registered and
      submitted to auction on Life-Exchange, the policy enters a preview period which
      allows all potential buyers the opportunity to underwrite the policy. After
      this
      preview period, the policy enters a live auction period where providers are
      able
      to bid against each other for the right to purchase the life insurance policy
      in
      a real-time, online auction.





At
      such time that a provider locates
      and successfully bids on a life insurance policy, the provider then negotiates
      and enters into a contract with the broker. We do not participate in said
      negotiation.





Our
      electronic exchange became
      operational on April 20, 2006. Life-Exchange generated its first revenues in
      September, 2006 from its news distribution services, which revenue totaled
      $1,720. Life-Exchange generated its first revenues from the sale of a life
      settlement policy through its electronic exchange in December, 2006. For the
      yearr ending June 30, 2007 Life-Exchange generated net revenue in the amount
      of
      $172,206.





Fee
      Structure





The
      Life-Exchange business model is
      based on three primary revenue streams: (a) transaction fees, (b) listing fees,
      and (c) news distribution fees. The fee structure for each of these revenue
      streams is designed to provide both brokers (sellers) and providers (buyers)
      with a compelling cost justification to use Life-Exchange as their primary
      means
      to execute life settlement transactions.





Transaction
      Fees. We charge a
      non-commission based transaction fee to the provider (buyer) in accordance
      with
      the terms of the Provider Agreement. This Transaction fee is based on a
      percentage of the face amount of the life insurance policy purchased by the
      provider. This fee arrangement allows us to remain neutral and avoid being
      classified as a life settlement broker with a fiduciary responsibility to the
      policy owner. We do not represent or negotiate on behalf of the policy
      owners.





License
      and Listing Fees. In order to
      have access to the exchange, both brokers and providers are required to enter
      into a User Agreement and pay an annual license fee of $5,000.00. This license
      fee includes access for up to 10 users. Additional users can be granted access
      to the system at a charge of $500.00 per additional user. In addition, brokers
      are required to pay a listing fee of  $150.00 for every policy
      submitted to auction on Life-Exchange.





7


News
      Distribution Fees. The secondary
      life insurance market is a niche marketplace with a unique blend of
      participants. And while this marketplace is experiencing tremendous growth,
      it
      is still difficult to target the firms and individuals that are most active
      in
      it. To address this need, Life-Exchange maintains the industry's largest
      database of influential readers focused on life settlements. In order to
      monetize this subscriber base, Life-Exchange provides a news distribution
      service. For a fee, Life-Exchange will distribute press releases to its
      subscriber base. The news distribution fee ranges from $500 to $2,000 depending
      on the specific nature of the press release.





The
      Life-Exchange
      Automation





While
      the majority of the life
      settlement industry is backed by technologically sophisticated, Fortune 500
      financial institutions, the technological sophistication of the life settlement
      industry itself is antiquated and highly inefficient. The majority of policy
      transactions are labor-intensive, cumbersome and disorganized undertakings.
      There is significant duplication of work, inappropriate policy transactions,
      miscommunication and poor follow through. All of these factors contribute to
      an
      un-productive and un-equitable marketplace.





Life-Exchange
      automates and modernizes
      the life settlement industry by introducing buyers to sellers (and vice versa)
      in a virtual, online marketplace. Our features and functionality are
      specifically designed to improve regulatory compliance, increase customer value,
      reduce transaction costs, create new revenue models, and add efficiency to
      an
      inefficient market.





With
      our web-based document management
      features and scalable database, Life-Exchange greatly assists clients by
      removing the confusion caused by different employees making changes to the
      same
      documents and not communicating the changes explicitly. Brokers and providers
      have access to the correct documents, and the ability to make and communicate
      changes, 24/7 from anywhere via secure internet connection. Each client's
      employee's responsibilities and completed work can be tracked using the audit
      feature built in to Life-Exchange, ensuring accountability.





Of
      particular importance to our
      industry, is the fact that the transfer of medical information requires
      adherence to HIPAA compliance procedures. In order to ensure compliance with
      the
      laws regulating the transmission of medical information, especially in
      electronic format, Life-Exchange offers all members a secure hosting center
      to
      store, retrieve, and exchange medical data in a manner that maintains compliance
      with HIPAA and state regulations.





In
      addition to the above factors, there
      is a significant influx of institutional capital entering the life settlement
      industry and the pressure to place this capital continues to increase.
      Automating the Life-Settlement transaction process and allowing more buyers
      and
      sellers to transact business through a single, highly efficient electronic
      exchange will greatly improve value for both buyer and seller by bringing
      greater liquidity to the life settlement marketplace. Life settlement brokers
      benefit by having equal and greater access to potential buyers, ensuring their
      clients receive the highest bids for their policies while maintaining compliance
      with stringent state-by-state regulations. Providers benefit by having access
      to
      more suitable investment opportunities, and are thus able to place their capital
      more rapidly and with greater efficiently, thus increasing their internal rate
      of return.





8


Intellectual
      Property and
      Patents





On
      March 31, 2006, David C. Dorr, our
      president, assigned his rights in a Patent pending application for Letters
      Patent of the United States filed July 21, 2004, U.S. Patent Application No.
      10/895112. Said patent relates to our processes described herein.





The
      Life Settlement Market and
      Competition





The
      life settlement industry developed
      out of the viatical industry which began in the late 1980s as large numbers
      of
      AIDS patients found themselves coping with the catastrophic costs of a terminal
      illness. Many had life insurance policies that seemed to be limited or
      inaccessible prior to the death of the insured. A creative solution was to
      offer
      AIDS patients a lump sum payment of cash greater than their cash surrender
      value, in exchange for transferring the ownership and beneficiary of a policy.
      Viewing a life insurance policy as a financial asset, which could be transferred
      for value had begun and unfortunately, as with many new financial concepts,
      lack
      of regulation lead to several incidences of fraud and other
      improprieties.





Over
      the past several years the market
      has evolved into a multi-billion dollar industry, which is heavily regulated
      and
      institutionally backed. The demand driving the growth of this product has been
      the rapid increase in the senior population, constantly changing estate planning
      needs and most profoundly the awareness that these insurance policies can be
      sold on a secondary market as financial instruments to institutionally backed
      buyers.





Life-Exchange
      is currently the only
      operational, fully independent, and nonaligned business-to-business trading
      platform for life settlement brokers and providers to exchange information
      and
      transact business.





With
      respect to indirect competition,
      there exist two companies -- SIMEX (www.Simex.com) and Life-X (www.life-X.com)
      -- which claim to provide consumers with the ability to auction their life
      insurance policies. While at first glance these companies may appear as direct
      competitors, their success, their neutrality, and their business models are
      quite different than that of Life-Exchange.





·      These
      companies are owned and operated by current life settlement brokers. This fact
      makes it difficult for these operations to attract other life settlement brokers
      as they are direct competitors. Simply stated, these companies are asking their
      competitors, to place policies on their exchange and in the process, disclose
      the source of their deal flow.


·      Unlike
      the Life-Exchange business model -- which focuses on a business (broker) to
      business (provider) transaction process -- these operations are focused on
      a
“business to consumer” transaction where individual insurance policy holders and
      their insurance agents can post policies available for sale.





9


As
      another form of indirect competition
      to life settlements, the life insurance industry has responded with policy
      features offering various pre-death, cash benefits (sometimes called accelerated
      death benefits). While in some cases accelerated death benefits may compete
      with
      life settlements, we do not expect the availability of accelerated death
      benefits to affect the life settlement market significantly at this time. The
      availability of accelerated death benefits is generally more restricted than
      life settlements. For example, policies often limit such benefits to persons
      who
      have a life expectancy of less than one year, in contrast to life settlements
      that are usually available to persons with life expectancies of two to 15 years.
      Life settlements generally offer sellers a greater dollar amount than they
      would
      receive under accelerated death benefit provisions.





Finally,
      access to capital, the
      insurance industry's addition of pre-death cash benefits, law enforcement
      pressure on companies operating illegally, and increasing government regulation
      have all contributed to a stabilization in the number and sophistication of
      life
      settlement companies, both those purchasing for their own accounts and those
      who
      act as agents for purchasers.





Government
      Regulation





Although
      our services do not require us
      to be licensed under federal or state law as a provider, broker or otherwise,
      we
      believe these laws and regulations have generally had a positive effect on
      the
      industry and on our ability to compete in the life settlement
      marketplace.





Currently
      the life settlement industry
      is regulated on a state-by-state basis, and at this time almost all states
      regulate life settlement transactions. Depending on the state, different
      licenses may be required for viatical and life settlements transactions, as
      well
      as for life settlement brokers and life settlement providers. Of those states
      that regulate the life settlement transactions, most require both the
      Viatical/Life Settlement Broker and the Viatical/Life Settlement Provider to
      be
      licensed.





The
      foundation for these regulations is
      based largely from the NAIC Viatical Settlements Model Act (the “**Model
      Act**”), which act encompasses a model law and regulations promulgated by
      the National Association of Insurance Commissioners (the
“**NAIC**”). Most states have now adopted some version of this
      model law or another form of regulation governing in some way viatical or life
      settlement companies or both. These laws generally require the licensing of
      providers and brokers, require the filing and approval of settlement agreements
      and disclosure statements, describe the content of disclosures that must be
      made
      to potential viators and/or life settlors, describe various periodic reporting
      requirements for settlement companies and prohibit certain business practices
      deemed to be abusive.





10


In
      December 2006, a committee of the
      NAIC approved amendments to the Model Act. The amended Model Act will be
      presented to the NAIC’s executive committee for final approval. The amended
      version of the Model Act is still being worked on.





In
      1996, Congress passed the Health
      Insurance Portability & Accountability Act (“**HIPAA**”). The
      purpose of HIPAA is to prevent fraud in the health care industry and to protect
      confidential patient information. HIPPA standardizes and provides enforcement
      mechanisms for ROI rules and guidelines to protect personal healthcare
      information. HIPAA effects entities involved with electronic health care
      information - including health care providers, health plans, employers, public
      health authorities, life insurers, clearinghouses, billing agencies, information
      systems vendors, service organizations, universities, and even single-physician
      offices. The final version of the HIPAA Privacy regulations was issued in
      December 2000, and went into effect on April 14, 2001. A two-year "grace" period
      was included; enforcement of the HIPAA Privacy Rules began on April 14,
      2003.





Licensing
      in
      Florida





Florida
      regulates both viatical and
      life settlements pursuant to the Florida Viatical Settlement Act set forth
      in
      Florida Statutes Sections 626.991--626.99295 (the “**Florida
      Act**”). The Florida Act makes no distinction between viatical and life
      settlements and refers to all settlements as viatical settlements.





The
      settlement process begins when the
      policy owner executes a viatical settlement application and provides
      authorization to the insured's attending physician and the issuing insurance
      company to disclose confidential information pertaining to the insured's health
      and insurance coverage. This information is necessary for a buyer to evaluate
      the policy for potential purchase. If the policy owner is not also the insured,
      both the viator and the insured typically will be required to review and sign
      the application. In addition to the policy owner's execution of the application
      documents, he or she is also required to provide some form of photo
      identification, a copy of the life insurance policy to be sold, and a copy
      of
      the application for the policy. As a general rule, policy owners are not
      required to submit to a medical examination as part of the application
      process.





A
**viator**
      is the owner
      of a life insurance policy, who seeks to sell a policy. The insured may or
      may
      not have a catastrophic or life threatening condition.





A
**viatical
      settlement
      provider** is a person or company who purchases a life insurance policy
      from a viator A viatical settlement provider must be licensed by the Florida
      Department of Financial Services (the
“**Department**”).





A
**viatical
      settlement
      broker** is a person who negotiates an agreement between a viator and a
      viatical settlement provider. The broker has a fiduciary responsibility to
      act
      according to the viator’s instructions and in the viator’s best interests and
      must be licensed by the Department. Brokers typically work closely with policy
      owners and collect their commissions from providers after the contract has
      been
      executed. After October 1, 2006, a person must be licensed with the Department
      as a life agent in order to act as a viatical broker.





11


An
**escrow
      agent** or
**trustee** is the party who holds the documents and the money
      until ownership rights of the policy have been transferred from the viator
      to
      the viatical settlement provider.  In some cases they retain
      investor’s funds until they have been placed on a life insurance policy and
      could be the party responsible for insuring payment to the
      investor.  Escrow agents or trustees are not licensed by the
      Department.





A
**viatical
      settlement
      investment**, as of July 1, 2005, is subject to the Florida Securities
      and Investor Protection Act.  For an investor, this means full
      disclosure and access to company information.  In addition, a
      determination of the investment’s suitability for the investor would have to be
      made after considering the investor’s financial and tax status, and the
      investor’s investment objectives.  It also means that the viatical
      settlement investment must either be registered with the Department or exempt
      from registration.  In addition, the person offering or selling the
      viatical settlement investment must be licensed with the Department to sell
      these securities.





In
      order to make their medical records
      available to third parties in the viatical settlement process, insured's must
      authorize their physicians and other health care givers, in writing, to release
      their private medical records.





The
      medical release allows the viatical
      settlement broker to obtain current medical records from the insured's
      physician. At a minimum, two years of records are required. These records are
      then provided to a review company that specializes in viatical and life
      settlement mortality profiles for a determination of an estimated life
      expectancy. Once a medical underwriter has obtained all of the policy owner's
      medical records, it can generate a preliminary estimate of the insured's life
      expectancy and thereafter issue a final report. The report is then used by
      the
      viatical settlement provider to determine if the offered policy comes within
      its
      underwriting guidelines for purchase.





The
      evaluation of a viatical settlement
      focuses on the specific terminal illness with which the insured has been
      diagnosed. In the case of a life settlement, however, where there is no terminal
      illness, other factors must be examined in order to determine estimated life
      expectancy.





Once
      the parties agree on a price, they
      will enter into a viatical settlement contract and other related agreements
      necessary to close the transaction. The viatical settlement contract contains
      the price to be paid to the policy owner for the policy and other important
      terms and conditions of the sale, including those dealing with mandatory
      disclosures, the policy owner's right to rescind the contract, and post-closing
      contact with the insured for health status updates. Other related forms
      typically include an escrow agreement with the entity that will hold the funds
      payable to the policy owner, the forms from the issuing insurance company
      necessary to record the change in the policy ownership and beneficiary(ies),
      releases for execution by the existing policy beneficiary(ies), a power of
      attorney and funding instructions.





12


The
      Florida Act defines a viatical
      settlement contract as one in which the provider pays compensation or value
      to
      the policy owner in an amount less than the expected death benefit of the
      subject insurance policy, and the policy owner in return assigns, transfers,
      sells, devises, or bequeaths ownership of all or a portion of the subject
      insurance policy to the provider. The contract can also include a loan secured
      primarily by a life insurance policy, or a loan secured by the cash value of
      the
      policy, excepting loans made by life insurers to insured under the guidelines
      of
      the subject policy.





A
      viatical settlement contract and the
      related forms must be pre-approved by the State of Florida Office of Insurance
      Regulation. By statute, the department must reject any viatical settlement
      contract or related form that is unreasonable, contrary to the public interest,
      discriminatory, or misleading or unfair to the policy owner. As part of the
      form
      approval process, the department requires that each form have a unique number
      in
      the lower left hand corner. This approval requirement provides policy owners
      with a measure of protection in that the department has reviewed the provisions
      of the viatical settlement contract and related forms and has required the
      removal of any unfair provisions prior to use of the form.





A
      viatical settlement purchase
      agreement is defined as a contract between a purchaser and a party other than
      the policy owner to purchase an interest in a life insurance policy. This is
      usually the investment contract between the purchaser and the
      provider.





As
      a further condition to a sale,
      Florida law requires the policy owner to confirm or agree in writing the
      following:





1.
            Consent
                to the viatical settlement
                contract;




2.
            Represent
                that he or she has a full and complete understanding of the viatical
                settlement contract and the benefits of the life insurance
                policy;




3.
            Release
                his or her medical records; and




4.
            Acknowledge
                that he or she has entered into the viatical settlement contract
                freely
                and voluntarily.




Finally,
      in Florida, all viatical settlement contracts must close in escrow in order
      to
      assure that the policy owner is paid. The independent escrow agent's role in
      a
      viatical settlement transaction is to receive and hold the executed viatical
      settlement contract and related documents, including the insurance company
      forms
      executed by the policy owner to transfer the ownership of the policy, and to
      receive and hold the funds transferred from the viatical settlement provider
      in
      the amount of the agreed-upon purchase price for the policy. After expiration
      of
      the policy owner's fifteen day right of rescission, the viatical settlement
      provider or its agent begins tracking or monitoring the policy owner's health
      status.





Florida
      law requires viatical
      settlement providers or brokers to provide specific information to policy owners
      before entering into a viatical settlement contract. Nearly all jurisdictions
      that regulate viatical settlements require substantially similar disclosures,
      the purpose of which is to give a person who is contemplating the sale of a
      life
      insurance policy basic information that may be material to that decision.
      Florida requires the following information to be disclosed:





13


1.
            That
                there are possible alternatives to viatical settlement contracts
                including, but not limited to, accelerated benefits available from
                the
                insurer that issued the policy.




2.
            That
                proceeds of the viatical settlement could be
                taxable.




3.
            That
                viatical settlement proceeds could be subject to the claims of
                creditors.




4.
            That
                receipt of the viatical settlement proceeds could adversely affect
                the
                recipient's eligibility for Medicaid or other government benefits
                or
                entitlements.




5.
            That
                all viatical settlement contracts must contain an unconditional rescission
                provision; and




6.
            The
                name, business address, and telephone number of the independent third
                party escrow agent.




The
      basic
      regulatory mechanism of the act is licensure. Brokers, providers, and sales
      agents are expressly subject to specific licensure requirements. Brokers must
      submit fingerprints, organizational documents, and sworn biographical
      statements, and must undergo a background check before receiving a license.
      Providers also must submit fingerprints and organizational documents and must
      undergo a background check as a prerequisite to licensure. Additionally,
      providers must meet a minimum trust deposit requirement of $100,000 with the
      Department of Insurance. Sales agents must hold valid life insurance agent
      licenses as defined in §626.051 of the Florida Insurance Code.





The
      Act provides safeguards for the
      policy owners and purchasers who deal with brokers, providers, and sales agents.
      For example, brokers must disclose to policy owners the amount of the broker's
      compensation and the method used in determining compensation. In addition,
      providers may not enter into contracts with policy owners whose policies provide
      accelerated death benefits in amounts and with prerequisites equal to those
      offered by the provider, unless the policy owner's insurer denies a request
      to
      release the accelerated death benefit in writing, or does not respond to such
      a
      request within 30 days of receipt. Policy owners may also rescind a viatical
      settlement contract within 15 days after receipt of the settlement proceeds,
      contingent upon return of the proceeds.





The
      provider must inform the policy
      owner of the following: that there are alternatives to viatical settlements,
      including accelerated death benefits offered by the policy owner's insurer;
      that
      proceeds of the settlement may be taxable; that proceeds of the settlement
      could
      be subject to the claims of creditors; and that the policy owner's receipt
      of
      the settlement sum could adversely affect the policy owner's eligibility for
      Medicaid or other government benefits.





Moreover,
      the act provides for the use
      of independent escrow agents for the simultaneous delivery of contract documents
      and settlement funds. This last protection reduces much of the policy owner's
      transaction risk and results in orderly, real estate style settlement
      closings.





For
      purchasers, the act provides for
      the following mandatory disclosures to be made by providers, among others:
      that
      the represented return of the investment is directly tied to the lifespan of
      one
      or more insured; that the projected life span of the insured is tied to the
      return, if a return is represented; that the investor shall be responsible
      for
      the payment of insurance premiums on the policy, late fees, surrender fees,
      and
      other costs, if required by the terms of the viatical contract; that the life
      expectancy and rate of return are only estimates and cannot be guaranteed;
      and
      that the viatical investment should not be considered a liquid purchase, since
      it is impossible to predict the exact timing of its maturity and the funds
      may
      not be available until the death of the insured. Furthermore, providers and
      sales agents are expressly prohibited from misrepresenting the nature of the
      viatical transaction, the expected return, or that the return is guaranteed
      by
      any government authority, which it is not.





14


In
      June 2006, the Florida Office of
      Insurance Regulation concurred with our conclusions that we would not be
      required to be licensed as a life settlement provider as a result of our
      business operations.





In
      September 2006, the Florida
      Department of Financial Services concurred with our conclusions that we would
      not be required to be licensed as a Life Settlement Provider as a result of
      our
      business operations.





Research
      and Development
      Activities





Product
      and development costs consist
      of the costs to develop and operate the online exchange platform's web based
      application and transaction database and are expensed as incurred. Our
      electronic exchange platform became operational on April 20, 2006, consequently,
      we only expended $13,213 for the current fiscal year ended June 30, 2007 on
      research and development compared to $104,435 for the prior fiscal year end
      June
      30, 2006See additional discussion of Research and Development in our Management
      Discussion and Analysis Section below.





Effect
      of Environmental
      Laws





Life
      Exchange is not affected by
      environmental laws.





Employees





As
      of June 30, 2007, we have 3 full
      time employees, none of whom are represented by a labor union. We consider
      our
      employee relations to be satisfactory.





Risk
      Factors





In
      addition to other information in
      this annual report on Form 10-KSB, the following risk factors should be
      carefully considered in evaluating us and our business because such factors
      significantly affect or could significantly affect our business, operating
      results or financial condition. Some of the statements contained herein discuss
      future expectations, contain projections of our plan of operation or financial
      condition or state other forward-looking information. In this annual report,
      forward-looking statements are generally identified by the words such as
      "anticipate", "plan", "believe", "expect", "estimate", and the like.
      Forward-looking statements involve future risks and uncertainties. These
      statements are subject to known and unknown risks, uncertainties, and other
      factors that could cause the actual results to differ materially from those
      contemplated by the statements.  Forward-looking information is based
      on various factors and is derived using numerous assumptions. A reader, whether
      investing in the Company's securities or not, should not place undue reliance
      on
      these forward-looking statements, which apply only as of the date of this
      report. Important factors that may cause actual results to differ from
      projections include, for example:




15


·
            the
                success or failure of management's efforts to implement our plan
                of
                operation;


·
            the
                ability to fund our operating
                expenses;


·
            the
                ability to compete with other companies that have a similar plan
                of
                operation;


·
            the
                effect of changing economic conditions impacting our plan of
                operation;


·
            the
                ability to meet the other risks as may be described in future filings
                with
                the SEC.





Readers
      are cautioned not to place
      undue reliance on the forward-looking statements contained herein, which speak
      only as of the date hereof.  We believe the information contained in
      this Form 10-KSB to be accurate as of the date hereof.  Changes may
      occur after that date.  We will not update that information except as
      required by law in the normal course of its public disclosure
      practices.





***We
      Are Operating in Markets that May Change Dramatically***





We
      are operating in the viatical and
      life settlement markets. The viatical settlement market is approximately 15
      years old. While the market saw tremendous growth in its initial years, the
      market growth in recent years has moderated somewhat. The life settlement market
      is less than a decade old. How and to what extent it will develop is uncertain.
      As more insureds become aware of life settlements as a financial planning
      option, we expect the size of the market to grow substantially. Any dramatic
      growth, however, will depend heavily upon the entry of institutional purchasers.
      Until a sufficient number of institutional purchasers commit to this industry
      and create a relatively stable demand, our financial performance during any
      period may be dramatically affected by the entry or departure from the market
      of
      one or more institutional providers.





Our
      prospects must be considered in
      light of the risks, expenses and difficulties encountered by those attempting
      to
      operate in rapidly evolving markets. We cannot assure you that we will be
      successful in addressing the risks we face. The failure to do so could have
      a
      material adverse effect on our business, financial condition, and results of
      future operations.





***Because
      we have a short operating history under our current management, there is limited
      information upon which you can evaluate our business.***





Our
      Company was formed in January 2005.
      As such, we have not engaged in a sufficient amount of consistent activity
      over
      a sustained period of time to establish an operating history in our current
      line
      of business. Since beginning operations in our current line of business, we
      have
      not been profitable, and we have limited financial results upon which you may
      judge our potential. As of June 30, 2007, our accumulated losses total
      $1,059,354.





You
      should consider our prospects in
      light of the risks, uncertainties and difficulties frequently encountered by
      companies that are, like us, in their early stages of earning revenues and
      growing their businesses particularly companies in the rapidly evolving market
      of viatical and life settlements. Similarly, we will require additional capital
      in order to execute our current business plan. As a Company that recently
      emerged from the development-stage, we may in the future experience
      under-capitalization, shortages, setbacks and many of the problems, delays
      and
      expenses encountered by any early stage business. As a result of these factors,
      other factors described herein and unforeseen factors, we may not be able to
      successfully implement our business model.





16


***Our
      Success Depends on Maintaining Relationships within our Referral
      Networks***





In
      the viatical market, we rely
      primarily upon brokers to refer potential viators and life settlors to us and
      upon financial planners, known as licensees, to refer viatical and life
      settlement purchasers to us. These relationships are essential to our operations
      and we must maintain these relationships to be successful. We do not have fixed
      contractual arrangements with the brokers or financial planners and they are
      free to do business with our competitors. In addition, the pool of viatical
      brokers and referring financial planners is relatively small, which can increase
      our reliance on our existing relationships.





As
      we develop our own network of
      insurance and financial planning professionals, known as producers, to refer
      potential sellers to us, we expect referrals from this source to grow. As with
      brokers, our ability to build and maintain these relationships will depend
      upon
      our closing rates and the level of compensation we pay to the referring
      professional. The compensation paid to the referring professional will affect
      the offer price to the seller and the compensation we receive. We must balance
      these interests successfully to build our referring network and attain greater
      profitability.





***We
      must Develop our Life Settlement Referral Network***





An
      impediment to our expansion in the
      life settlement market could be the difficulty in identifying a large volume
      of
      potential sellers. These sellers are typically affluent persons over the age
      of
      70 and not terminally or chronically ill. The target market is relatively narrow
      and advertising methods such as direct mailings or print media advertising
      are
      not likely to be cost effective. We believe the best way to reach this market
      is
      generally through life insurance professionals and, to a lesser extent, through
      professionals engaged in estate planning, such as attorneys, accountants, and
      financial planners. Settlement brokers will also reach this market. Our business
      plan utilizes both insurance professionals and brokers as sources of policies,
      as well as the development of a life settlement referral network.





We
      intend to rapidly expand our
      referring network of insurance professionals to educate potential life settlors
      on the options presented by life settlements. We are actively working to expand
      our network through direct solicitation, calls to managing general insurance
      agents, and by word-of-mouth contacts. To a lesser extent, we will also use
      advertising in financial planning trade publications and our Internet website.
      This is a new market and building our referral network will depend on our
      ability to educate insurance professionals about the benefits of senior life
      settlements to potential sellers and to the professionals themselves. While
      we
      believe we have been successful in publicizing the benefits of viatical
      settlements, we cannot assure you that our past successes will carry over into
      this new market. Our business, financial condition and results of operations
      could be materially adversely affected to the extent we fail to expand the
      referral network.





17


***We
      Depend on Growth in both the Viatical and Life Settlement
      Market***





While
      the existing markets for viatical
      and life settlements provide opportunity for growth, greater opportunity lies
      in
      the growth in the life settlement market. Growth of the life market and our
      expansion within the market may be affected by a variety of factors,
      including:





•  the
      inability to locate sufficient numbers of life settlors;





•  the
      inability to convince potential sellers of the benefits of life
      settlements;





•  the
      inability to attract institutional purchasers;





•  competition
      from other life settlement companies;





•  the
      occurrence of illegal or abusive business practices resulting in negative
      publicity about the market; and





•  the
      adoption of overly burdensome governmental regulation.





In
      addition, the life settlement market may evolve in ways we have not anticipated
      and we may be unable to respond in a timely or cost-effective manner. If the
      life settlement market fails to grow as quickly as or in the directions we
      have
      anticipated, our business, financial condition and results of operations would
      be materially adversely affected as it relates to our large-scale
      growth.





***Government
      Regulation Could Negatively Impact Our Business***





At
      least 36 states have now adopted
      some version of the model law promulgated by the National Association of
      Insurance Commissioners or another form of regulation governing viatical
      settlement companies in some way. These laws generally require the licensing
      of
      viatical providers and brokers, require the filing and approval of viatical
      settlement agreements and disclosure statements, and describe the content of
      disclosures that must be made to potential viators, describe various periodic
      reporting requirements for viatical settlement companies and prohibit certain
      business practices deemed abusive.





In
      addition, some states and the
      Securities and Exchange Commission treat viatical and life settlements as
      securities under state and federal securities laws. Because of legal precedent
      relating to the structure of our transactions, we do not believe that the
      application of securities laws will have a material adverse effect on our
      operations, but cannot assure you that state regulators or private individuals
      will not file these types of actions in the future or that such actions would
      not have a material adverse effect on our business.





18


While
      we welcome reasonable regulation
      of the viatical and senior life markets and believe that such regulation will
      benefit these markets, attempts to regulate these markets through application
      of
      their securities laws - either through actions by state agencies or private
      individuals may adversely affect the markets. We cannot assure you that we
      will
      not encounter regulatory difficulties in the future, some of which could have
      a
      material adverse effect on our business. In addition, government regulation
      could affect our referral networks or settlement purchasers, which could in
      turn
      have a material adverse effect on our business.





***Our
      Founder Beneficially Owns 42.8% of Our Common Stock and, as a Result, Can
      Exercise Significant Influence over Our Company***





Mr.
      David Dorr, our founder, is the
      beneficial owner of approximately 42.8% of our common stock. In addition, Brian
      Dorr, our secretary and treasurer, owns 12.3% of our common stock. He will
      be
      able to influence most matters requiring approval by our shareholders, including
      the election of directors and approval of significant corporate transactions.
      This concentration of ownership may also have the effect of delaying or
      preventing a change in control, which in turn could have a material adverse
      effect on the market price of our common stock or prevent our shareholders
      from
      realizing a premium over the market price for their shares of common
      stock.





***Our
      Stock Is Thinly Traded and the Stock Price May Be
      Volatile***





Shares
      of our common stock are quoted
      on the “pink sheets,” and we cannot assure you that any other trading market for
      our securities will develop and you should anticipate bearing the economic
      risk
      of your investment for an indefinite period of time. The average volume on
      the
      stock is very low and the sale of even small blocks of shares could cause a
      significant decrease in the per share price.





If
      the Company were to seek to have
      shares of its common stock quoted on the OTC Bulletin Board or other trading
      medium, it may be subject to lengthy delays in doing so, and there can be no
      assurance that the Company's efforts will be successful. Moreover, in the event
      that the Company's shares become quoted on any such trading medium, we will
      be a
      penny stock and subject to the penny stock rules by the Securities and Exchange
      Commission that require brokers to provide extensive disclosure to their
      customers prior to executing trades in penny stocks, and as such there may
      be a
      reduction in the trading activity of our common stock.





***Our
      common stock is subject to the “penny stock” rules of the SEC, which will make
      transactions in our common stock cumbersome and may depress the trading price
      of
      our common stock.***





Life
      Exchange’s common stock is a
      "penny stock," as defined in Rule 3a51-1 under the Exchange Act. The penny
      stock
      rules apply generally to companies whose common stock trades at less than $5.00
      per share, subject to certain limited exemptions. Such rules require, among
      other things, that brokers who trade “penny stocks” to persons other than
“established customers” complete certain documentation, make suitability
      inquiries of investors and provide investors with certain information concerning
      trading in the security, including a risk disclosure document and quote
      information under certain circumstances Many brokers have decided not to trade
      “penny stocks” because of the requirements of these rules and, as a result, the
      number of broker-dealers willing to act as market makers in such securities
      is
      limited. In the event that we remain subject to the penny stock rules for any
      significant period, there may develop an adverse impact on the market, if any,
      for our securities.





19


***We
      will incur significant additional expense related to compliance with the
      internal control over financial reporting requirements and other requirements
      of
      the Sarbanes Oxley Act of 2002 (“Sarbanes-Oxley”), and any inability to comply
      with these requirements may harm our business and the price of our common
      stock***.





As
      directed by Section 404 of
      Sarbanes-Oxley, the SEC has adopted rules requiring public companies to conduct
      a comprehensive review and assessment of the effectiveness of their internal
      control over financial reporting, and to include a report of management on
      internal control over financial reporting in their annual reports, including
      Annual Reports on Form 10-KSB, which we will be required to file after the
      effectiveness of this registration statement. In addition, the independent
      registered public accounting firm that audits a public company's financial
      statements must attest to and report on management's assessment of the
      effectiveness of the company's internal control over financial reporting as
      well
      as the operating effectiveness of the company's internal control over financial
      reporting. These requirements may first apply to our annual report on Form
      10-K
      or 10-KSB for the fiscal year ending June 30, 2008 and the auditor attestation
      with not be required until fiscal year ending June 30, 2009.





We
      are currently evaluating our
      internal control over financial reporting in order to allow our management
      to
      report on, and our independent registered public accounting firm to attest
      to,
      our internal controls, and to identify weaknesses and deficiencies in or
      internal controls that require remediation. Currently, we do not have an
      independent audit committee. Until our board of directors has established a
      qualified, independent audit committee, it is highly unlikely that our
      management will be able to conclude that our internal control over financial
      reporting is effective. We expect to expend significant resources during our
      2008 and 2009 fiscal years developing the necessary internal controls, and
      in
      documentation and testing procedures required by Section 404 of the
      Sarbanes-Oxley Act related to these internal controls. We also expect a
      significant increase in audit fees and related expenses related to Section
      404.
      Despite these efforts, a review of our financial systems and controls may
      uncover additional deficiencies in existing systems and controls, and our
      efforts to correct any such deficiencies may be costly and may strain our
      management resources and negatively impact earnings. In the event we identify
      significant deficiencies or material weaknesses in our internal controls over
      financial reporting that we cannot remediate in a timely manner or we receive
      an
      adverse report from our independent registered public accounting firm with
      respect to our internal controls over financial reporting, investors and others
      may lose confidence in the reliability of our financial statements and our
      ability to obtain equity or debt financing could be adversely affected. In
      addition to the above, in the event that our independent registered public
      accounting firm is unable to rely on our internal controls over financial
      reporting in connection with their audit of our financial statements, and in
      the
      further event that they are unable to devise alternative procedures in order
      to
      satisfy themselves as to the material accuracy of our financial statements
      and
      related disclosures, it is possible that we could receive a qualified or adverse
      audit opinion on those financial statements. In that event, the market for
      our
      common stock could be adversely affected. In addition, investors and others
      may
      lose confidence in the reliability of our financial statements and our ability
      to obtain equity or debt financing could be adversely affected.





20


***Stockholders
      are subject to potential dilution as a result of future issuances of
      securities.***





In
      the event the Company needs
      additional capital, the Company may offer to sell additional stock with rights,
      preferences and privileges senior to our common stock. Any such issuance would
      dilute the outstanding stockholders' equity interests in the Company and might
      adversely affect the value of the outstanding shares. Although the Company
      is
      generating revenue and believes such revenues are sufficient to support
      operations, the Company has an accumulated deficit and therefore may be required
      to raise additional funds.





Item
                2.
            Description
                of Property.





Our
      executive offices are located at 2001 Biscayne Blvd., Suite 2102 Miami, FL
      33137. This office consists of 1400 square feet and is leased for 12 months
      and
      expires at the end of May 2008.





Item
                3.
            Legal
                Proceedings.





We
      are not a party to any pending legal
      proceedings nor is any of our property the subject of any pending legal
      proceedings.





Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders.





We
      did not submit any matters to a vote
      of our stockholders, through the solicitation of proxies or otherwise, during
      the fourth quarter of fiscal 2007.





PART
      II





Item
                5.
            Market
                for Common Equity and Related  Stockholder Matters and Small
                Business Issuer Purchases of Equity
                Securities.





On
      January 29, 2006, our common stock
      began trading on the Over-the-Counter Bulletin Board "Pink Sheets" under the
      symbol "LFXG.PK". Such trading of our common stock is limited and
      sporadic.  The table below sets forth the high and low bid quotations
      for our Common Stock for each quarter since January 2006. The quotations below
      reflect inter-dealer prices, without retail mark-up, mark-down or commission
      and
      may not represent actual transactions:





**Closing
                Bid****Quarter
                Ended**
            **High**
            **Low**June
                30, 2007
            $0.25
            $0.125March
                31, 2007
            $0.24
            $0.10December
                31, 2006
            $1.39
            $0.125September
                30, 2006
            $0.60
            $0.305June
                30, 2006
            $0.85
            $0.51March
                31, 2006
            $1.15
            $0.60January
                29, 2006
            $2.80
            $0.25





21


As
      of September 27, 2007, we had
      approximately 20 shareholders of record of our common stock.





No
      cash dividends on outstanding common
      stock have been paid within the last two fiscal years, and interim periods.
      The
      Company does not anticipate or intend upon paying cash dividends for the
      foreseeable future.





Item
                6.
            Management's
                Discussion and Analysis or Plan of
                Operation.





The
      following presentation of
      management's discussion and analysis of our financial condition and results
      of
      operations should be read in conjunction with our consolidated financial
      statements, the accompanying notes thereto and other financial information
      appearing elsewhere in this report. This section and other parts of this report
      contain forward-looking statements that involve risks and
      uncertainties.  Our actual results may differ significantly from the
      results discussed in the forward-looking statements.





Overview
      and Plan of Operations





Life-Exchange
      operates two websites:
      www.life-exchange.com and www.life-exchange.net. Our business-to-business
      exchange application is located at www.life-exchange.net and access to this
      site
      is restricted to registered users. Life-Exchange.com is accessible to the
      general public and is designed as a portal for the life settlement community
      providing a broad range of services, resources and information specific to
      the
      life settlement industry, including news alerts, forums, industry-specific
      search capabilities, headlines and industry events.





As
      shown in the accompanying financial
      statements, we began generating revenues in the quarter ending December 31,
      2006. Our fiscal year end is June 30. We had a net loss of $711,043 during
      the
      year end June 30, 2007 and had total accumulated losses of $1,059,354 as of
      June
      30, 2007, representing primarily product development, salaries and professional
      fees associated with creating our online exchange platform and establishing
      the
      business relationships necessary to consummate a product launch. As of June
      30,
      2007 we had net shareholders' deficit of $696,875.





**Results
      of Operations**





**Year
      Ended June 30, 2007 (YTD 2007) Compared to Year Ended June 30, 2006 (YTD
      2006)**





**Revenues**Revenue
      increased $169,806 (7,075.3%) to $172,206 (YTD 2007) from $2,400 (YTD
      2006).  The Company commenced commercial operations during the second
      quarter of its 2007 fiscal year.  The Company generates revenue from
      auction transactions, setup fees and newsletters.  The bulk of this
      increase in revenue is from transaction fees.





**Costs
      of Revenue**  Costs of revenue decreased $61,585 (54.7%) to
      $51,081 (YTD 2007) from $112,666 (YTD 2006).  Cost of revenues
      consists of product development expenses, internet hosting services and related
      expenses.  Costs of revenue decreased primarily due to reduction in
      product development costs as the product became commercially
      functional.





22


**Sales
      and Marketing Costs**  Sales and marketing costs increased
      $17,763 (43.4%) to $58,726 (YTD 2007) from $40,963 (YTD 2006).  Sales
      and marketing costs consist of travel, communications, subscriptions and
      memberships.  Sales and marketing costs increased primarily due to
      increased expenditures for organization memberships and other marketing costs
      design to promote the business.





**Administration
      Costs**  Administration costs increased $572,833 (297.8%) to
      $765,171 (YTD 2007) from $192,338 (YTD 2006).  Administration costs
      consist of payroll expenses, professional fees, office expenses and other
      general and administrative costs.  Administration costs increased
      primarily due to market adjustments in executive compensation, increased
      professional fees resulting from new business arrangements, patent defense
      and
      acquisition investigation costs, increased office expenses due to increased
      commercial activity and bad debts resulting primarily from a revoked transaction
      agreement.





**Other
      Income (Expense)**  Other income (expense) reported an
      increased expense of $3,528 (74.4%) to $8,272 (YTD 2007) expense from $4,744
      (YTD 2006) expense. Other income (expense) consists of Refunds received and
      interest expense.  Refunds resulted from the return of certain
      professional fees incurred in the previous year.  Refunds received
      were offset by increased interest expense due to increased
      borrowings.





**Net
      Loss**Net loss increased $362,732 (104.1%) to a net loss of
      $711,043 (YTD 2007) from a net loss of $348,311 (YTD 2006).  Net loss
      increased primarily as a result of increased administration costs which were
      only partially offset by decreased costs of revenues and increased
      revenues.





**Liquidity
      and Capital Resources and Plan of Operations**





**Overview**  The
      Company’s net working capital decreased $255,956 (1,616.8%) to a $271,468
      deficit at June 30, 2007 from a $15,812 deficit at June 30, 2006.  The
      Company reported $13,179 in cash at June 30, 2007, which represents the
      remaining proceeds of the $150,000 loan received on April 2, 2007 from Vantage
      Group Ltd., a related company.





Although
      operational, the Company has yet to realize sufficient activity volume to fund
      its operational costs.  As shown in the accompanying financial
      statements, the Company has incurred net losses from operations of $711,043
      for
      the year ended June 31, 2007 and a shareholders’ net deficiency of $696,875,
      which includes $362,479 of contributed capital as of June 30,
      2007.  These factors raise substantial doubt about the Company’s
      ability to continue as a going concern.





Management’s
      plans in regard to this matter are to continue to raise equity capital and
      seek
      strategic relationships and alliances in order to further enhance the
      commercialization of its exchange platform in an effort to generate positive
      cash flow.  Until its technologies become fully commercially viable
      and marketing efforts generate sufficient transaction volume, the Company must
      continue to rely upon equity infusions in order to provide adequate liquidity
      to
      sustain its operations.





23


**Cash
      Flows for the Year Ended June 30, 2007**





**Cash
      Flows From Operating Activities**  Net cash used in operations
      increased $98,522 (29.6%) to $431,083 (YTD 2007) net cash used from $332,562
      (YTD 2006) net cash used.  The increase net cash used results from the
      increased net loss of $362,732.  As previously discussed, the
      increased net loss resulted from increased payroll, professional fees, insurance
      and other operational costs net of bad debt allowances and accruals which impact
      working capital requirements.  Additional working capital was used to
      support increased revenues in the form of increased accounts receivables
      partially offset by increased uncollectible accounts.





**Cash
      Flows From Investing Activities**  Net cash used in investing
      decreased $27,243 (86.7%) to $4,197 (YTD 2007) net cash used from $31,440 (YTD
      2006) net cash used.  The decrease results from reductions in capital
      additions, patent costs and administrative activities.





**Cash
      Flows From Financing Activities**  Net cash provided by
      financing increased $87,521 (24.1%) to $450,000 (YTD 2007) net cash provided
      from $362,479 (YTD 2006) net cash provided.  The increase results from
      increased borrowings.





**Financing**  On
      July 7, 2006, the Company entered into a note agreement with Vantage Group
      Ltd.
      to provide $300,000 of financing.  The terms of the note provide for
      7% interest payable quarterly.  The note is unsecured and was
      retroactively amended to mature on July 7, 2008.  The Holder of this
      Note is entitled, at its option, to convert the principal amount of this Note
      or
      any portion thereof, together with accrued but unpaid interest, into shares
      of
      Common Stock of the Company (“Conversion Shares”) based on the Company attaining
      certain performance criteria as follows measured during December,
      2006.  The Company did not meet the performance criteria and
      accordingly, no shares were converted.





On
      April
      2, 2007, the Company entered into a second note agreement with Vantage Group
      Ltd. to provide $150,000 of additional financing.  The terms of the
      note provide for 7% interest payable quarterly.  The note is unsecured
      and matures on April 30, 2008, which may be extended to April 30, 2009 at the
      option of the holder.  The note also provides Vantage with conversion
      rights based on the Company attaining certain performance criteria.





*Off
      Balance Sheet Transactions.*  We have no off balance sheet
      arrangements and has not entered into any transactions involving unconsolidated,
      limited purpose entities.





*Recent
      Accounting Pronouncements*.  The Company continues to assess the
      effects of recently issued accounting standards. The impact of all recently
      adopted and issued accounting standards has been disclosed in the Notes to
      the
      audited Consolidated Financial Statements.





24


Critical
      Accounting Estimates





Although
      we believe we will have
      sufficient cash flow for operations, we would like to continue to grow and
      expand our business. During the next 12 months, we intend to spend between
      $750,000 and $1,000,000 to fund the establishment and expansion of our
      operations, although our ability to do so may depend on our ability to raise
      additional funds through debt and/or equity financing. The expansion of our
      operations will be primarily through further product development and
      intellectual property development and purchases. In the event we do not or
      cannot raise additional funds, we may be required to limit or curtail our
      expansion and growth plans.





The
      plan of operation for Life-Exchange
      over the next twelve months is to focus on the following key
      objectives:




·
            Continue
                with our successful acquisition of new member
                clients.


·
            Launch
                version 2.0 of our web-based exchange
                application.


·
            Continue
                to generate positive operating cash flows and develop cash
                reserves.


·
            Continue
                with the aggressive expansion of our intellectual property
                portfolio.


·
            Launch
                additional services which will increase our revenue
                streams.





Sales
      & Marketing





Since
      the public launch of the
      Life-Exchange website on April 20, 2006, we have aggressively focused on
      acquiring as clients the top life settlement broker and provider companies
      in
      our industry. Management believes that the top 10 broker and top 10 provider
      firms transact in excess of 60% of all Life Settlement contracts. As of
      September 27,  2007, we had contracts with 7 life settlement broker
      firms, including two of the nation's largest life settlement broker operations.
      At this time, Life-Exchange also has contracts with 13 of the top life
      settlement provider firms. With the recent completion and launch of its website,
      Life-Exchange's management will be able to focus a greater amount of time and
      resources on sales and marketing efforts in order to acquire additional
      clients.





A
      primary theme of the Life-Exchange
      user agreements is that Life-Exchange is an online venue for indications of
      interests to buy and sell, and that the site is only an online communications
      medium to facilitate registered Providers and registered Brokers to exchange
      information relating to proposed Life Settlement Transactions; such life
      insurance policies transactions are completed off-line, outside of the
      site.





Brokers
      pay two forms of compensation
      to Life-Exchange; an annual license fee of $5,000.00 and a listing fee of
      $150.00 for every policy submitted to auction on
      Life-Exchange.  Providers pay two forms of consideration to
      Life-Exchange: an annual license fee of $5,000 and a transaction fee which
      is
      based on the face value of each policy purchased by the Provider, through the
      exchange.  Transaction fees range from 0.50% to 1.0% of the face value
      of a policy.





25


All
      Broker and Provider contracts are
      identical with regards to the material rights and obligations of both parties
      and include:





·      Neither
      Brokers nor Providers have any fixed contract length and neither Providers
      nor
      Brokers are obligated to use the exchange, post policies, or provide a minimum
      level of business to the exchange.


·      Either
      a Broker/Provider or Life-Exchange may terminate this Agreement at any time
      upon
      thirty (30) days advance written notice of termination provided to the other
      party.


·      Broker
      and Provider must comply with stringent confidentiality and privacy obligations,
      including those related to the Health Insurance Portability and Accountability
      Act of 1996 and regulations promulgated (“**HIPAA**”),


·      Brokers
      and Providers are responsible for paying for any life expectancy reports that
      they order through Life-Exchange.


·      Brokers
      and Providers must at all times (a) comply with all applicable laws and
      regulations applicable to its offer to purchase, solicitation to sell, or
      purchase of, Policies in Life Settlement Transactions, (b) obtain and maintain
      in good standing all licenses and permits that Broker/Provider may be required
      to hold under applicable laws and regulations.


·      Both
      Providers and Brokers agree to a non-circumvent period where neither party
      shall, directly or indirectly, purchase or sell a Policy listed on the exchange
      or make any offer to purchase or sell any such policy for a period of 1
      year





Over
      the next twelve months,
      management's strategy is to continue with its sales and marketing strategy
      of
      focusing efforts on establishing a “footprint” nationally with the industries
      top tier firms.





Our
      primary marketing efforts will
      continue to include:





·      Taking
      advantage of our preeminent position within the Life Settlement industry to
      secure exclusive industry alliances thereby ensuring long term deal flow in
      the
      form of long term use of our web-based exchange platform.




·      Use
      our strong industry contacts within the broker and provider communities to
      promote the usage of Life-Exchange as an industry standard.




·      Implement
      website features and functionality that create user retention.




·      Continual
      development of products and services that anticipate the market's evolution
      particularly in regards to the regulatory landscape.




·      Enhancements
      and modifications to our website that differentiates our product and services
      by
      offering industry specific tools and functionality that will become and remain
      the industry standard




In
      addition to acquiring new life settlement broker and provider clients,
      Life-Exchange plans to pursue clients from the primary insurance sector such
      as
      broker dealers and General Agencies. General Agencies consist of branches of
      major mutual insurance companies that are contracted to represent the particular
      insurance company in a specific area such as life insurance, auto or health
      insurance. These clients will be the future of the life settlement industry
      as
      they offer life settlement services directly to their captive life
      agents.





26


Research
&
      Development





Life-Exchange
      has outsourced the
      development of its web application to Epiq Technologies of San Diego,
      California. Epiq Technologies was chosen after an exhaustive search for the
      most
      appropriate business-to-business exchange platform and software developer.
      Our
      web based application is based upon industry leading technology which has
      provided us with a common, secure, and scalable infrastructure for which to
      base
      future development. Our web application was publicly launched on April 20,
      2006
      and to date, our developer has delivered all milestones ahead of schedule and
      we
      expect this practice to continue.





Data
      transmitted between our clients
      and our Web servers is via the industry standard Secure Sockets Layer (SSL),
      which is a mechanism to secure Internet traffic so that it cannot be
      intercepted. Life-Exchange will continue to use and update its platform with
      the
      most advanced security measures available.





Over
      the next twelve months,
      Life-Exchange's ongoing research and development will focus on modifications
      and
      enhancements to meet the changing needs of our users, as well as addressing
      regulatory issues encountered by the industry. This proactive approach towards
      customer satisfaction will include making certain that www.Life-Exchange.com
      continues to foster:




·      A
      customer-first approach.


·      Superior
      and efficient execution of all web site functionality, processes, and
      procedures.


·      Excellent,
      easy to access customer support services.


·      Resources
      to serve both brokers and providers.


·      A
      comprehensive range of products and services to ensure competitive advantage
      and
      to serve current and future customer needs.


·      Fast,
      reliable, and accurate functionality.


·      A
      highly credible site which offers private and secure transactions





Equipment




With
      respect to equipment requirements,
      Life-Exchange employs a strategy of leasing all of its technological hardware
      and software requirements through industry leading vendors. As such, we expect
      no significant equipment purchases over the next 24 months.





Staffing





Life-Exchange
      operates around a core
      group of highly skilled individuals with an extensive knowledge and
      understanding of the life settlement industry. Besides a nominal administrative
      staff to support this core group, Life-Exchange will outsource all staffing
      activities not directly related to our core capabilities in the life settlement
      industry, including such activities as software development, marketing, investor
      relations, and compliance. Based on this outsourcing strategy, Life-Exchange
      anticipates no significant staffing level increases within the next twelve
      months.





Depreciation
      is provided by the
      straight-line method over the estimated useful life of the related assets.
      The
      Company had depreciation expense of $8,918 for the fiscal year end June 30,
      2007.





27


Note
      Payable





On
      July 7, 2006, the Company entered
      into a note agreement with Vantage Group, Ltd., to provide $300,000 of
      additional financing. The terms of the note provide for 7% interest payable
      quarterly. The quarterly interest installments due September 30, 2006 and
      December 31, 2006 were waived. The note is unsecured and was retroactively
      amended to mature on June 1, 2008. The note also provides Vantage with
      conversion rights based on the Company attaining certain performance criteria.
      In particular, if the Company had generated revenues of at least $250,000 for
      the month ending December 31, 2006 the note could be converted based on one
      formula and if the Company generated revenues of at least $500,000 for the
      month
      ending December 31, 2006 the note could be converted based on an alternate
      formula. The Company did not meet these performance goals.





On
      April
      2, 2007, the Company entered into a note agreement with Vantage Group Ltd.
      to
      provide $150,000 of additional financing.  The terms of the note
      provide for 7% interest payable quarterly.  The note is unsecured and
      matures on April 30, 2008, which may be extended to April 30, 2009 at the option
      of the holder.  The requirement to make quarterly interest payments
      through August 31, 2007 was also waived to require interest accrued to be paid
      at maturity.  The note also provides Vantage with conversion rights
      based on the Company attaining certain performance criteria as
      follows.  The note may be converted into shares of the Company’s
      common stock at (i) $0.10 or (ii) fifty percent (50%) of the three lowest
      closing prices of the Company’s Common Stock on the Pink Sheets (or such other
      principal market or exchange where the Common Stock is listed or traded at
      the
      time of conversion) immediately preceding the date of conversion.





Critical
      Accounting/Use of
      Estimates





The
      Company prepares its financial
      statements in conformity with accounting principles generally accepted in the
      United States. The preparation of financial statements in conformity with U.S.
      generally accepted accounting principles (GAAP) requires the use of estimates
      and assumptions the affect the reported amounts of revenue and expenses during
      the reporting period. The Company's critical accounting policies are those
      that
      are both most important to the Company's financial condition and results of
      operations and requires the most difficult, subjective or complex judgments
      or
      complex judgments on the part of management in their application, often as
      a
      result of the need to make estimates about the effect of matters that are
      inherently uncertain. Because of the uncertainty of factors surrounding the
      estimates or judgments used in the preparation of the financial statements,
      actual results could vary from these estimates.





Income
      taxes





Income
      taxes will be computed using the
      liability method and will be provided on all temporary (timing) differences
      between the financial reporting basis and the tax basis of the Company's assets
      and liabilities. Allowable tax credits and carry- forward losses will be applied
      as reductions to future provision for income taxes if and when the Company
      becomes profitable, as reductions of the provision for income
      taxes.




Revenue
      Recognition/Accounting
      Pronouncement(s)





The
      Company will recognize revenues in
      accordance with SAB No. 101, Revenue Recognition in Financial Statements, as
      amended by SAB No. 104, Revenue Recognition . The Company's accounting policy
      for revenue recognition will have a substantial impact on its reported results
      and relies on certain estimates that require difficult, subjective and complex
      judgments on the part of management The Company will recognize revenue when
      substantially all the risks and rewards of life settlement transactions have
      transferred (will transfer) from the seller to the buyer. A life settlement
      transaction is defined by the Company as “the sale of an in-force life insurance
      policy that is issued on the life of a person that is not considered terminally
      ill, for a lump sum amount; the amount is more than the cash surrender value
      of
      the policy but less than the face value of the policy”. Revenue associated with
      life settlement transactions will be recognized when title (ownership) passes
      to
      the customer (purchaser), either immediately or within a fixed time schedule
      that is reasonable and customary in the industry.





28


Item
                7.
            Financial
                Statements.




Life
        Exchange, Inc.
 
 FINANCIAL
        STATEMENTS
 
 June
        30,
        2007
 
 Table
        of
        Contents
 
 
 Report
                  of Independent Registered Public Accounting Firm
              F
–
                  2Balance
                  Sheet
              F
–
                  3Statements
                  of Revenue and Expense
              F
–
                  4Statements
                  of Changes in Shareholders' Deficit
              F
–
                  5Statements
                  of Cash Flow
              F
–
                  6Notes
                  to Financial Statements
              F
–
                  7 - 15
 
 
 
 F-1
  **Report
        of Independent Registered Public Accounting Firm**
 
 
 
 To
        The
        Shareholders and Board of Directors of
 Life
        Exchange, Inc.
 
 We
        have
        audited the accompanying balance sheets of Life Exchange, Inc. as of June
        30,
        2007 and the related statements of operations, changes in shareholders’
deficiency and cash flows for the years ended June 30, 2007 and 2006,
        respectively.  These financial statements are the responsibility of
        the Company’s management.  Our responsibility is to express an opinion
        on these financial statements based on our audits.
 
 We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States).  Those standards require
        that we plan and perform the audit to obtain reasonable assurance about whether
        the financial statements are free of material misstatement.  An audit
        includes examining, on a test basis, evidence supporting the amounts and
        disclosures in the financial statements.  An audit also includes
        assessing the accounting principles used and significant estimates made by
        management, as well as evaluating the overall financial statement
        presentation.  We believe that our audits provided a reasonable basis
        for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Life Exchange, Inc. as of June
        30,
        2007, and the results of its operations and its cash flows in conformity
        with
        accounting principles generally accepted in the United States.
 
 The
        accompanying financial statements have been prepared assuming that Life
        Exchange, Inc. will continue as a going concern.  As discussed in Note
        A to the financial statements, Life Exchange, Inc. has suffered recurring
        losses
        from operations, which raises substantial doubt about its ability to continue
        as
        a going concern.  Management’s plans regarding those matters also are
        described in Note A.  The financial statements do not include any
        adjustments that might result from the outcome of this
        uncertainty.
 
 
 
 */s/*Jewett, Schwartz, Wolfe & Associates
  Hollywood,
        Florida
 September
        26, 2007
 
 F-2


**LIFE
                  EXCHANGE, INC.****BALANCE
                  SHEET**
 
 **June
                  30,****2007**ASSETSCURRENT
                  ASSETSCash
              
              $
              13,197Accounts
                  receivables
              
              
              4,043Prepaid
                  expenses
              
              
              2,750TOTAL
                  CURRENT ASSETS
              
              
              19,990PROPERTY,
                  EQUIPMENT AND IMPROVEMENTS, NET
              
              
              11,166OTHER
                  ASSETS, NET
              
              
              13,427TOTAL
                  ASSETS
              
              $
              44,583LIABILITIES
                  AND SHAREHOLDERS' DEFICITCURRENT
                  LIABILITIESTrade
                  accounts payable
              
              $
              24,865Accrued
                  expenses, payroll, related taxes and interest
              
              
              266,593TOTAL
                  CURRENT LIABILITIES
              
              
              291,458NOTE
                  PAYABLE-RELATED PARTY
              
              
              450,000TOTAL
                  LIABILITIES
              
              
              741,458COMMITMENTS
                  AND CONTINGENCIESSHAREHOLDERS'
                  DEFICITPreferred
                  stock $.001 par valueAuthorized
                  20,000,00 shares.  No shares Issued and
                  outstanding
              
              
              -Common
                  stock $.001 par valueAuthorized
                  250,000,00 shares.  Issued and outstanding176,715,000
                  shares
              
              
              176,715Additional
                  paid-in capital
              
              
              185,764Accumulated
                  deficit
              
              
              (1,059,354
              )TOTAL
                  SHAREHOLDERS' DEFICIT
              
              
              (696,875
              )TOTAL
                  LIABILITIES AND SHAREHOLDERS' DEFICIT
              
              $
              44,583




The
        accompanying notes are an integral part of these financial
        statements




F-3




**LIFE
                  EXCHANGE, INC.****STATEMENTS
                  OF REVENUE AND EXPENSE**
 
 **Year
                  Ended June 30,****2007**
              
              
              **2006**NET
                  REVENUE
              
              $
              172,206
              
              
              $
              2,400COSTS
                  AND EXPENSESCost
                  of net revenueProduct
                  development
              
              
              13,213
              
              
              
              104,435Internet
                  hosting
              
              
              23,662
              
              
              
              7,403Other
                  costs of net revenue
              
              
              14,206
              
              
              
              82851,081
              
              
              
              112,666Costs
                  of sales and marketingTravel
                  and entertainment
              
              
              23,653
              
              
              
              24,028Telephone
                  and communication
              
              
              9,369
              
              
              
              8,532Dues,
                  subscriptions and memberships
              
              
              14,690
              
              
              
              5,840Other
                  costs of sales and marketing
              
              
              11,014
              
              
              
              2,56358,726
              
              
              
              40,963Costs
                  of administrationLegal
                  and professional fees
              
              
              243,034
              
              
              
              92,479Payroll
                  expenses
              
              
              294,779
              
              
              
              70,756Office
                  expenses
              
              
              63,667
              
              
              
              20,584Insurance
              
              
              59,122
              
              
              
              -Other
                  cost of administration
              
              
              104,568
              
              
              
              8,519765,170
              
              
              
              192,338TOTAL
                  COSTS AND EXPENSES
              
              
              874,977
              
              
              
              345,967OPERATING
                  LOSS
              
              
              (702,771
              )
              
              
              (343,567
              )OTHER
                  INCOMERefunds
                  received and other fees
              
              
              14,850
              
              
              
              -Interest
                  income
              
              
              750
              
              
              
              152Write
                  down of office equipment
              
              
              -
              
              
              
              (4,896
              )Interest
                  expense
              
              
              (23,872
              )
              
              
              -(8,272
              )
              
              
              (4,744
              )NET
                  LOSS
              
              $
              (711,043
              )
              
              $
              (348,311
              )Weighted
                  Average Shares Outstanding
              
              
              176,715,000
              
              
              
              145,058,836Basic
                  and Fully Diluted Net Loss Per Share
              
              $
              (0.004
              )
              
              $
              (0.002
              )




The
        accompanying notes are an integral part of these financial
        statements




F-4


**LIFE
                  EXCHANGE, INC.****STATEMENTS
                  OF CHANGES IN SHAREHOLDERS' DEFICIT****For
                  the Year Ended June 30,
                  2007**
 
 Common
                  Stock
              
              
              Additional
              
              
              Accumulated
              
              
              Shareholder'sShares
              
              
              $
              
              
              Paid
                  In Capital
              
              
              Deficit
              
              
              DeficitBALANCE
                  AT JUNE 30, 2005
              
              
              120,215,000
              
              
              $
              120,215
              
              
              $
              (120,215
              )
              
              $
              -
              
              
              $
              -Common
                  Stock Transactions:Shares
                  Issued:to
                  new founders
              
              
              120,000,000
              
              
              
              120,000
              
              
              
              (77,521
              )
              
              
              -
              
              
              
              42,479to
                  investors
              
              
              45,000,000
              
              
              
              45,000
              
              
              
              275,000
              
              
              
              -
              
              
              
              320,000Shares
                  Cancelled:per
                  exchange for stock agreement
              
              
              (105,000,000
              )
              
              
              (105,000
              )
              
              
              105,000
              
              
              
              -
              
              
              
              -per
                  CEO seperation
              
              
              (3,500,000
              )
              
              
              (3,500
              )
              
              
              3,500
              
              
              
              -
              
              
              
              -Net
                  loss for the year
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (348,311
              )
              
              
              (348,311
              )BALANCE
                  AT JUNE 30, 2006
              
              
              176,715,000
              
              
              
              176,715
              
              
              
              185,764
              
              
              
              (348,311
              )
              
              
              14,168Net
                  loss for the year
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (711,043
              )
              
              
              (711,043
              )BALANCE
                  AT JUNE 30, 2007
              
              
              176,715,000
              
              
              $
              176,715
              
              
              $
              185,764
              
              
              $
              (1,059,354
              )
              
              $
              (696,875
              )




The
        accompanying notes are an integral part of these financial
        statements
  F-5
 **LIFE
                    EXCHANGE, INC.****STATEMENTS
                    OF CASH FLOW**
 
 **June
                    30,**
                
                
                **June
                    30,****2007**
                
                
                **2006****Cash
                    Flows From Operating Activities:**NET
                    LOSS
                
                $
                (711,043
                )
                
                $
                (348,311
                )Adjustments
                    to reconcile net loss to netcash
                    used in operating activities:Depreciation
                
                
                8,918
                
                
                
                793Amortization
                    of intangible assets
                
                
                667
                
                
                
                667Allowance
                    for bad debts
                
                
                86,200
                
                
                
                -Changes
                    in operating assets and liabilities:Trade
                    accounts receivable
                
                
                (90,243
                )
                
                
                -Prepaid
                    expenses
                
                
                2,180
                
                
                
                (4,930
                )Trade
                    accounts payable
                
                
                13,566
                
                
                
                11,298Accrued
                    expenses, payroll, related taxes and interest
                
                
                258,672
                
                
                
                7,921Net
                    cash used in operating activities
                
                
                (431,083
                )
                
                
                (332,562
                )**Cash
                    Flow From Investing Activities:**Purchases
                    of property, equipment and improvements
                
                
                (4,197
                )
                
                
                (16,680
                )Costs
                    of patent
                
                
                -
                
                
                
                (10,000
                )Security
                    deposits given
                
                
                -
                
                
                
                (4,760
                )Net
                    cash used in investing activities
                
                
                (4,197
                )
                
                
                (31,440
                )**Cash
                    Flow From Financing Activities:**Note
                    proceeds-related party
                
                
                450,000
                
                
                
                -Capital
                    investment
                
                
                -
                
                
                
                362,479Net
                    cash provided by investing activities
                
                
                450,000
                
                
                
                362,479NET
                    (DECREASE) INCREASE IN CASH
                
                
                14,720
                
                
                
                (1,523
                )Cash
                    at beginning of the period
                
                
                (1,523
                )
                
                
                -CASH
                    AT END OF PERIOD
                
                $
                13,197
                
                
                $
                (1,523
                )SUPPLEMENTARY
                    INFORMATIONInterest
                    paid
                
                $
                -
                
                
                $
                -Income
                    taxes paid
                
                $
                -
                
                
                $
                -NONCASH
                    INVESTING AND FINANCING ACTIVITIESNone




The
        accompanying notes are an integral part of these financial
        statements




F-6


**LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 *Company
        Background*– On January 19, 2005 (“date of inception”), Life-Exchange,
        Inc. (“Life-Exchange” or “Nominal Acquiree”) was organized under the laws of the
        State of Delaware as a corporation.  Life-Exchange was established for
        the purposes of servicing the life settlement industry by creating an on-line
        business-to-business exchange platform, which will facilitate the brokering
        of
        secondary life insurance.  Operations commenced on July 1,
        2005.
 
 On
        December 22, 2005, an Agreement for the Exchange of Common Stock (“Stock
        Exchange”) was entered into between:
 
 ·
              Life
                  Exchange, Inc. (“The Company” or “Nominal Acquirer”), a Nevada corporation
                  formerly known as Technology
                  Enterprises,
 
 ·
              Vantage
                  Group, Ltd. (“Vantage”) a Delaware corporation and accredited investor as
                  defined in rule 501 of Regulation D under the Securities Act of
                  1933,
                  and
 
 ·
              100%
                  of the shareholders of Life-Exchange
                  (“Shareholders”).
 
 The
        Stock
        Exchange agreement resulted in the acquisition of 100% of the issued and
        outstanding common shares of Life-Exchange from its Shareholders in exchange
        for
        120,000,000 shares of common stock of the Company.  As a result of the
        Stock Exchange, Life-Exchange became a wholly owned subsidiary of the
        Company.
 
 On
        January 29, 2006, the Company began to trade publicly under the name Life
        Exchange, Inc. (OTC pink sheets: LFXG.PK).
 
 On
        March
        8, 2006, the Company entered into a Stock Purchase Agreement (“Stock Purchase”)
        with Vantage, whereby Vantage acquired an additional 16.65% increasing their
        total investment to 24.98% of the Company’s then issued and outstanding common
        shares for $320,000.
 
 On
        March
        29, 2006, the Company entered into An Agreement and Plan of Merger (“Merger”),
        whereby its wholly owned subsidiary, Life-Exchange was merged into the
        Company.
 
 
 F-7
 **LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)**
 
 In
        summary, the Stock Exchange, Stock Purchase and Merger agreements effectively
        consummate a reverse acquisition and merger with the following
        results;
 
 ·
              Life-Exchange,
                  Inc. a Delaware corporation, is the active corporation creating
                  an online
                  exchange platform.  It is the Nominal Acquiree in this
                  transaction.  However, for financial reporting, it is considered
                  to be the acquiring corporation since its original shareholders
                  are the
                  major shareholders of the resultant combined
                  enterprise.  Life-Exchange was merged into the
                  Company.
 
 ·
              Life
                  Exchange, Inc. a Nevada corporation formerly known as Technology
                  Enterprises, adopted the name of the Nominal Acquiree in connection
                  with
                  this transaction.  It was a dormant public entity and the
                  Nominal Acquirer in this transaction.  However, for financial
                  reporting purposes, it is considered to be the acquired
                  corporation.
 
 *Going
        Concern*- As shown in the accompanying financial statements, during the
        year ended June 30, 2007 (YTD 2007), the Company continued its efforts to
        commercialize its online exchange platform and consequently recorded revenue
        of
        $172,206.  However, the net losses for the same period were $711,043
        during YTD 2007, representing primarily salaries, legal and professional
        fees
        associated with operating its online exchange platform and establishing business
        relationships.
 
 As
        of
        June 30, 2007 shareholders’ deficit of $696,875 and a net working capital
        deficit was $271,468.  These factors continue to raise substantial
        doubt about the Company’s ability to continue as a going concern.
 
 Management’s
        plans in regard to this matter are to raise equity capital, seek debt financing
        in addition to the $450,000 loan obtained during fiscal year 2007 and to
        form
        strategic relationships and alliances in order to continue the commercialization
        of its online exchange platform in an effort to generate positive cash
        flow.  Until its online exchange platform becomes commercially viable,
        and generates sufficient revenues, the Company must continue to rely upon
        debt
        and/or equity infusions in order to provide adequate liquidity to sustain
        its
        operations.  However, there can be no assurance that management’s
        plans will be successful.
 
 The
        financial statements have been prepared on a “going concern” basis and
        accordingly do not include any adjustments that might result from the outcome
        of
        this uncertainty.
 
 F-8
 **LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)**
 
 *Revenue
        Recognition**-*The Company recognizes revenue in accordance
        with the provisions of Staff Accounting Bulletin (SAB) No. 101, *Revenue
        Recognition in Financial Statements*, as amended by SAB No. 104, *Revenue
        Recognition*, which states that revenue is realized and earned when all of
        the following criteria are met: (a) persuasive evidence of the arrangement
        exists, (b) delivery has occurred or services have been rendered, (c) the
        seller’s price to the buyer is fixed and determinable and (d) collectibility is
        reasonably assured.
 
 The
        Company’s accounting policy for revenue recognition will have a substantial
        impact on its reported results and relies on certain estimates that require
        difficult, subjective and complex judgments on the part of
        management.  The Company will recognize revenue when substantially all
        the risks and rewards of life settlement transactions have transferred (will
        transfer) from the seller to the buyer.  A life settlement transaction
        is defined by the Company as “the sale of an in-force life insurance policy that
        is issued on the life of a person that is not considered terminally ill,
        for a
        lump sum amount; the amount is more than the cash surrender value of the
        policy
        but less than the face value of the policy”.  Revenue associated with
        life settlement transactions will be recognized when title (ownership) passes
        to
        the customer (purchaser), either immediately or within a fixed time schedule
        that is reasonable and customary in the industry.
 
 In
        addition to settlement transactions, the Company also recognizes revenue
        from
        distributing industry related news and information; annual license fees and
        setup fees.  All these fees are non-refundable and earned upon
        delivery of the related service.
 
 *Management’s
        Use of Estimates***- The preparation of financial
        statements in conformity with accounting principles generally accepted in
        the
        United States of America requires management to make estimates and assumptions
        that effect the reported amounts of assets and liabilities, disclosures of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting
        period.  Actual results could differ from those
        estimates.
 
 *Cash
        and Cash Equivalents* - The Company considers liquid investments with an
        original maturity of three months or less to be cash equivalents.
 
 *Property
        and Equipment* - Property and equipment are stated at cost less
        accumulated depreciation. Depreciation is calculated using the straight-line
        method. Maintenance and repair costs are expensed as incurred.
 
 *Income
        Tax Benefit* - The income tax benefit consists of taxes currently
        refundable due to net operating loss carry back provisions for federal and
        state
        governments. Deferred tax assets are reduced by a valuation allowance when,
        in
        the opinion of management, it is more likely than not that some portion or
        the
        entire deferred tax asset will not be realized. Deferred tax assets and
        liabilities are adjusted for the effect of changes in tax laws and rates
        on the
        date of enactment.
  F-9
 **LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)**
 
 *Concentration
        of Credit Risk**-*Financial instruments that potentially
        subject the Company to concentrations of credit risk consist principally
        of
        cash.
  *Product
        Development Costs* - Product and development costs consist of the costs
        to develop and operate the online exchange platform’s web based application and
        transaction database and are expensed as incurred.
 
 *Fair
        Value of Financial Instruments**-*Cash and cash equivalents,
        prepaid expenses and other current assets, accounts payable and accrued
        expenses, as reflected in the financial statements, approximate fair value
        because of the short-term maturity of these instruments. Fair value estimates
        are made at a specific point in time, based on relevant market information
        and
        information about the financial instrument. These estimates arte subjective
        in
        nature and involve uncertainties and matters of significant judgment and
        therefore cannot be determined with precision. Changes in assumptions could
        significantly affect the estimates.
 
 *Impairment
        of Long-lived Assets**-*The Company reviews long-lived assets
        for impairment whenever circumstances and situations change such that there
        is
        an indication that the carrying amounts may not be recovered. At June 30,
        2007
        the Company believes that there has been no impairment of its long-lived
        assets.
 
 *Research
        and Development Costs* - Research and development costs are expensed as
        incurred.
 
 *Loss
        Per Share* - The Company reports earnings (loss) per share in accordance
        with Statement of Financial Accounting Standard (SFAS) No.128.  This
        statement requires dual presentation of basic and diluted earnings (loss)
        with a
        reconciliation of the numerator and denominator of the loss per share
        computations.  Basic earnings per share amounts are based on the
        weighted average shares of common stock outstanding.  If applicable,
        diluted earnings per share would assume the conversion, exercise or issuance
        of
        all potential common stock instruments such as options, warrants and convertible
        securities, unless the effect is to reduce a loss or increase earnings per
        share.  Accordingly, this presentation has been adopted for the period
        presented.  There were no adjustments required to net loss for the
        period presented in the computation of diluted earnings per share.
 
 *Comprehensive
        Income (Loss)* - The Company adopted SFAS No. 130, *“Reporting
        Comprehensive Income”*, which establishes standards for the reporting and
        display of comprehensive income and its components in the financial statements.
        There were no items of comprehensive income (loss) applicable to the Company
        during the years covered in the financial statements.
 
 F-10
 **LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)**
 
 *Segment
        Reporting* - SFAS No. 131, *“Disclosures about Segments of an
        Enterprise and Related Information”*requires companies to report
        information about operating segments in interim and annual financial
        statements.  It also requires segment disclosures about products and
        services, geographic areas and major customers.  The Company
        determined that it did not have any separately reportable operating
        segments.
 
 *Recent
        Accounting Pronouncements*–
 
 *Accounting
        Changes and Error Corrections*
 
 In
        May
        2005, the FASB issued SFAS No. 154, “*Accounting Changes and Error
        Corrections*” (SFAS No. 154). This statement replaces Accounting Principles
        Board (APB) Opinion No. 20, “*Accounting Changes*”, and SFAS
        No. 3, “*Reporting Accounting Changes in Interim Financial
        Statements*,” and changes the requirements for the accounting for and
        reporting of a change in accounting principle. This statement applies to
        all
        voluntary changes in accounting principles. It also applies to changes required
        by an accounting pronouncement in the unusual instance that the pronouncement
        does not include specific transition provisions. When a pronouncement includes
        specific transition provisions, those provisions should be followed. SFAS
        No.
        154 requires retrospective application to prior periods’ financial statements of
        voluntary changes in accounting principles. SFAS No. 154 is effective for
        accounting changes and corrections of errors made during 2007, beginning
        on
        January 1, 2007. The Company believes that the adoption of SFAS No. 154 will
        not
        have a material impact on its financial statements.
 
 *Taxes
        collected from customers and remitted to governmental
        authorities*
 
 In
        June
        2006, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 06−3 (EITF
        No. 06-3), “How Taxes Collected from Customers and Remitted to Governmental
        Authorities Should Be Presented in the Income Statement (That Is, Gross versus
        Net Presentation).” EITF No. 06−3 applies to any tax assessed by a governmental
        authority that is directly imposed on a revenue producing transaction between
        a
        seller and a customer. EITF No. 06−3 allows companies to present taxes either
        gross within revenue and expense or net. If taxes subject to this issue are
        significant, a company is required to disclose its accounting policy for
        presenting taxes and the amount of such taxes that are recognized on a gross
        basis. EITF No. 06−3 is required to be adopted during the first quarter of
        fiscal year 2008. The Company does not expect the adoption of EITF No. 06-3
        will
        have a material impact on financial position, results of operations or cash
        flows.
 
 
 F-11
 **LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)**
 
 *Uncertainty
        in Income Taxes*
 
 In
        July
        2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty
        in
        Income Taxes, an interpretation of FASB Statement No. 109" (FIN 48). FIN
        48
        clarifies the accounting for uncertainty in income taxes by prescribing the
        recognition threshold a tax position is required to meet before being recognized
        in the financial statements. It also provides guidance on derecognition,
        classification, interest and penalties, accounting in interim periods,
        disclosure and transition. The cumulative effects, if any, of applying FIN
        48
        will be recorded as an adjustment to retained earnings as of the beginning
        of
        the period of adoption. FIN 48 is effective for fiscal years beginning after
        December 15, 2006, and the Company is required to adopt it in the first quarter
        of fiscal year 2008. The Company believes that the adoption of FIN 48 will
        not
        have a material impact on its financial statements.
 
 *Fair
        value measurements*
 
 In
        September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
        No. 157). SFAS No. 157 provides guidance for using fair value to measure
        assets
        and liabilities. SFAS No. 157 addresses the requests from investors for expanded
        disclosure about the extent to which companies measure assets and liabilities
        at
        fair value, the information used to measure fair value and the effect of
        fair
        value measurements on earnings. SFAS No. 157 applies whenever other standards
        require (or permit) assets or liabilities to be measured at fair value, and
        does
        not expand the use of fair value in any new circumstances. SFAS No. 157 is
        effective for financial statements issued for fiscal years beginning after
        November 15, 2007 and will be adopted by the Company in the first quarter
        of
        fiscal year 2008. The Company does not expect the adoption of SFAS No. 157
        will
        have a material impact on financial position, results of operations or cash
        flows.
 
 *Fair
        value option for financial assets and financial liabilities*
 
 In
        February 2007, the FASB issued SFAS No. 159 "*The Fair Value Option for
        Financial Assets and Financial Liabilities - an Amendment of SFAS No.
        115."*  This statement permits entities to choose to measure many
        financial instruments and certain other items at fair value.  The objective
        is to improve financial reporting by mitigating volatility in reporting earnings
        caused by measuring related assets and liabilities differently without having
        to
        apply complex hedge accounting provisions.  SFAS No. 159 will be effective
        for fiscal years beginning after November 15, 2007.  The Company does not
        expect the adoption of SFAS No. 159 will have a material impact on financial
        position, results of operations or cash flows.
 
 
 F-12
 
 **LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 
 
 **NOTE  B
        – PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET**
  **June
                    30,**
                
                
                **June
                    30,****Life**
                
                **2007**
                
                
                **2006**Office
                    Equipment
                4
                    yrs
                
                $
                10,894
                
                
                $
                6,922Furniture
                    & Fixtures
                7
                    yrs
                
                
                2,085
                
                
                
                2,085Leasehold
                    Improvements
                1
                    yr
                
                
                5,775
                
                
                
                5,550Vehicles
                3
                    yrs
                
                
                2,123
                
                
                
                2,12320,877
                
                
                
                16,680Less:
                    Accumulated Depreciation
                
                
                
                (9,711
                )
                
                
                (793
                )$
                11,166
                
                
                $
                15,887
 Depreciation
        expense for the years ended June 30, 2007 and 2006 were $8,918 and $793,
        respectively.
 
 
 **NOTE  C
        – OTHER ASSETS**
  **June
                    30,**
                
                
                **June
                    30,****2007**
                
                
                **2006**Patent
                    costs, net of amortization of
                
                $
                8,667
                
                
                $
                9,333$1,333
                    (2007) and $667 (2006)Lease
                    security deposits
                
                
                4,760
                
                
                
                4,760$
                13,427
                
                
                $
                14,093
  Patent
        costs consist of accumulated legal costs associated with a patent application
        covering the exchange platform concept and associated technology.  On
        March 29, 2006 David Dorr (“Dorr”), the chief executive officer of Life Exchange
        and primary developer of the online exchange platform concept, entered into
        an
        Assignment by Inventor agreement whereby the ownership of the patent application
        and associated intellectual property rights were transferred to the
        Company.  Prior to the transfer, the Company had operated under a
        license agreement with Dorr to pursue the development and utilization of
        the
        online exchange platform.
 
 
 F-13
 
 **LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 
 
 **NOTE  D
        – INCOME TAXES**
 
 The
        benefit from income taxes for the years ended June 30, 2007 and 2006 consist
        of
        the following:
  **2007**
                
                
                **2006**Current:Federal
                
                $
                (241,755
                )
                
                $
                (118,426
                )State
                
                
                (25,811
                )
                
                
                (12,644
                )Benefit
                    from income taxes
                
                
                (267,566
                )
                
                
                (131,070
                )Increase
                    in valuation allowance
                
                
                267,566
                
                
                
                131,070Benefit
                    from income taxes, net of allowance
                
                $
                -
                
                
                $
                -
 
 The
        difference between benefit from income taxes computed by applying the federal
        statutory Corporate tax rate and actual income tax expense for the periods
        ended
        June 30, 2007 and 2006 is as follows:
 **2007**
                
                
                **2006**Statutory
                    federal income tax rate
                
                
                34.0
                %
                
                
                34.0
                %State
                    income taxes, net of federal benefit
                
                
                3.6
                %
                
                
                3.6
                %Increase
                    in valuation allowance
                
                
                -37.6
                %
                
                
                -37.6
                %Effective
                    income tax rate
                
                
                0.0
                %
                
                
                0.0
                %
 
 The
        net
        deferred tax assets at June 30, 2007 and June 30, 2006 are comprised of the
        following:
 **2007**
                
                
                **2006**Deferred
                    tax assets - non-current
                
                $
                420,607
                
                
                $
                153,041Valuation
                    allowance
                
                
                (420,607
                )
                
                
                (153,041
                )Net
                    defered tax asset
                
                $
                -
                
                
                $
                -
 The
        Company currently has a net operating loss (NOL) of $1,059,354 (2007) and
        $348,311 (2006) which can be utilized until the year 2026.  The
        deductibility of the NOL is subject to the limitations provision of the Federal
        tax code (i.e. IRC § 382).
 
 
 F-14
 **LIFE-EXCHANGE,
          INC.**
 **Notes
          to Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 
 
 **NOTE  E
        – NOTE PAYABLE – RELATED PARTIES**
 
 On
        July
        7, 2006, the Company entered into a note agreement with Vantage Group Ltd.
        to
        provide $300,000 of additional financing.  The terms of the note
        provide for 7% interest payable quarterly.  The quarterly interest
        installments due September 30, 2006 and December 31, 2006 were waived. The
        note
        is unsecured and was retroactively amended to mature on July 7,
        2008.  The note also provides Vantage with conversion rights based on
        the Company attaining certain performance criteria as follows:
 
 The
        Holder of this Note is entitled, at its option, to convert the principal
        amount
        of this Note or any portion thereof, together with accrued but unpaid interest,
        into shares of Common Stock of the Company (“Conversion Shares”) based on the
        Company attaining certain performance criteria measured during December,
        2006.  The Company did not meet the performance criteria and
        accordingly, no shares were converted.
 
 On
        April
        2, 2007, the Company entered into a note agreement with Vantage Group Ltd.
        to
        provide $150,000 of additional financing.  The terms of the note
        provide for 7% interest payable quarterly.  The note is unsecured and
        matures on April 30, 2008, which may be extended to April 30, 2009 at the
        option
        of the holder.  The note also provides Vantage with conversion rights
        based on the Company attaining certain performance criteria as
        follows.  The note may be converted into shares of the Company’s
        common stock at (i) $0.10 or (ii) fifty percent (50%) of the three lowest
        closing prices of the Company’s Common Stock on the Pink Sheets (or such other
        principal market or exchange where the Common Stock is listed or traded at
        the
        time of conversion) immediately preceding the date of conversion.
 
 
 **NOTE
        F – LEASES and COMMITMENTS and CONTINGENCIES**
 
 The
        Company currently leases its primary office facilities under a one-year,
        non-cancelable real estate operating lease with a minimum rental commitment
        of
        $31,250 through May 31, 2008, the renewal date.
 
 On
        May
        30, 2006 the directors of the Company approved the appointment of David Dorr
        as
        President and Chief Executive Officer after accepting the resignation of
        its
        previous President and Chief Executive Officer.  A settlement
        agreement with the departing President and Chief Executive Officer provided
        for
        continued monthly salary of three thousand dollars ($3,000) per month through
        December 2006, continuation of health insurance through December 31, 2006
        and
        retention of 1,000,000 shares of common stock.  All agreed payments
        have been made.


F-15


Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure.





NONE





Item
      8A.  Controls and Procedures.





The
      chief executive officer and chief
      financial officer of the Company, after conducting an evaluation of the
      effectiveness of the design and operation of the Company's disclosure controls
      and procedures as of June 30, 2007, has concluded that the Company’s disclosure
      controls and procedures were effective to ensure that information required
      to be
      disclosed by it in its reports filed or submitted under the Securities Exchange
      Act of 1934 (the "Exchange Act") is recorded, processed summarized and reported
      within the time periods specified in the rules and forms of the Securities
      and
      Exchange Commission (the "SEC"). There were no significant changes in the
      Company’s internal controls or in other factors that could significantly affect
      these controls subsequent to that evaluation, and there were no significant
      deficiencies or material weaknesses in such controls requiring corrective
      actions.





Changes
      in Internal Control Over Financial Reporting





No
      significant changes in the Company's
      internal control over financial reporting have come to management's attention
      during the Company's previous fiscal quarter that have materially affected,
      or
      are likely to materially affect, the Company's internal control over financial
      reporting.





PART
      III





Item
                9.
            Directors,
                Executive Officers, Promoters and Control Persons and Corporate
                Governance; Compliance with Section 16(a) of the Exchange
                Act.





The
      following is a list of our
      directors and executive officers. All directors serve one-year terms or until
      each of their successors are duly qualified and elected. The officers are
      elected by the Board of Directors.





**Name**
            **Age**
            **Position(s)**David
                Dorr
            29
            President,
                Chief Executive Officer, DirectorBrian
                Dorr
            24
            Secretary,
                Treasurer, DirectorJean-Marc
                Golden
            40
            Vice
                President, Chief Operating Officer,
                Director





**David
      Dorr**, (29) is
      the President, Chief Executive Officer and founder of
      Life-Exchange.  Mr. Dorr has worked full time with Life-Exchange since
      its inception in January 2005. Over this period, Mr. David Dorr has been
      responsible for development and implementation of the company’s direction,
      strategic ventures and relationships. Mr. David Dorr has been asked to speak
      both in the U.S. and Europe at industry conferences, including the BVZL
      Conference held in Dortmund, Germany, the Life Insurance Settlement Association
      Conference in New York, and the Emerging Investment Strategies in the Secondary
      Life Market, Hedge Fund Conference in New York. For the three years prior to
      launching Life-Exchange, Mr. Dorr was Director of Business Development for
      Life
      Asset Group in Miami, Florida; a premier life settlement brokerage
      firm.  He joined Life Asset Group when it was a start-up operation and
      in his position as Director of Business Development, Mr. Dorr transformed the
      firm from a start-up operation of one employee, to a profitable operation of
      22
      employees within two years.





29


**Brian
      Dorr**, (24), has
      been with Life Exchange since March 2005. For the past two years, he has served
      as Vice President of Product Development for Life-Exchange where his primary
      focus has been on the development the Life-Exchange software application. In
      addition, Mr. Brian Dorr is responsible for all customer service and client
      side
      activities. For the three years prior to joining Life-Exchange, Mr. Dorr was
      employed by Life Asset Group in Miami, Florida; one of the nation’s largest life
      settlement brokerage firms based in Miami, Florida. At Life Asset Group, he
      was
      responsible for the creation and management of the firm's Case Coordination
      Department.  In addition to his management duties, Mr. Dorr was
      responsible for sourcing, recommending and implementing software applications
      to
      streamline case management. Mr. Dorr was also a member of the firm’s in-house
      design committee responsible for design and improvements to the firm’s Customer
      Resource Management system.





**Jean-Marc
      Golden**, (40), has been with Life Exchange since March 2005. For the
      past two years, Mr. Golden has been Vice President and Chief Operating Officer
      for Life-Exchange. Over this period, Mr. Golden has been primarily responsible
      for management of the company's day-to-day operations, including marketing,
      software development, production and personnel. Prior to joining Life-Exchange,
      Mr. Golden was a New York based management consultant specializing in product
      development and commercialization, client development and organizational
      audits.  His clients consisted of both Fortune 500 companies and
      entrepreneurial ventures, including Deloitte & Touche, Lois Law, American
      Lawyer Media, Wasserstein Perella & Co., MTV, and Viacom. During this
      period, Mr. Golden has also served as a Board Member for The Sam and Adele
      Golden Foundation for the Arts, Inc., an internationally recognized 503(c)
      organization.





David
      Dorr, Brian Dorr, and Cameron
      Dorr, an investor in the company, are brothers. David Dorr owns 42.8% of the
      outstanding common shares of the company; Brian Dorr owns 12.3% of the
      outstanding common shares of the company; and Cameron Dorr owns .6% (less than
      1%) of the outstanding common shares company as of September 27,
      2007.





Code
      of Ethics





We
      have not yet adopted a code of
      ethics applicable to our principal executive officer, principal financial
      officer, principal accounting officer or controller, or persons performing
      similar functions. Our three directors, David Dorr, Brian Dorr and Jean-Marc
      Golden, have chosen not to adopt such a code of ethics because they are also
      our
      principal executive officer and principal financial officer as well as our
      only
      two employees.





Section
      16(a) Beneficial Ownership
      Reporting Compliance





Section
      16(a) of the Exchange Act
      requires our directors, executive officers and ten percent (10%) beneficial
      owners to file reports with the SEC regarding their ownership and changes in
      ownership of their equity securities of the Company and to furnish to the
      Company copies of such reports. Based solely upon our review of the copies
      of
      such reports, we believe that during the 2007 fiscal year, all directors,
      executive officers and ten percent (10%) beneficial owners have complied with
      such filing requirements.





Item
                10.
            Executive
                Compensation





The
      following table sets forth
      compensation awarded to, earned by or paid to our Chief Executive Officer
      (principal executive officer),  and the two (2) other most highly
      compensated executive officers with compensation in excess of $100,000 for
      the
      years ended June 30, 2007 and 2006 (collectively, the "Named Executive
      Officers").




30





**SUMMARY
                COMPENSATION TABLE**Name
                and principal
              position
            Year
            Salary
            Bonus
            Stock
              Awards
            Option
                Awards
            Non-Equity
              IncentivePlan
              Compensation
            Nonqualified
              Deferred
              Compensation
              Earnings
            All
                Other Compensation
            TotalDavid
                Dorr
            2007
            84,684
            0
            0
            0
            0
            0
            0
            84,6842006
            17,589
            0
            0
            0
            0
            0
            0
            17,589Brian
                Dorr
            2007
            83,908
            0
            0
            0
            0
            0
            0
            83,9082006
            17,589
            0
            0
            0
            0
            0
            0
            17,589Jean-Marc
              Golden
            2007
            80,700
            0
            0
            0
            0
            0
            0
            80,7002006
            17,589
            0
            0
            0
            0
            0
            0
            17,589








Outstanding
      Awards at Fiscal Year End





Listed
      below is information with respect to unexercised options, restricted stock
      that
      has not vested, and equity incentive plans for each named executive officer
      outstanding as of June 30, 2007:





**OUTSTANDING
                EQUITY AWARDS AT JUNE 30, 2007**OPTION
                AWARDS
            STOCK
                AWARDSName
            Number
                of Securities Underlying Unexercised Options
              (#)
              Exercisable
            Number
                of
              Securities
              Underlying
              Unexercised
              Options(#)
              Unexercisable
            Equity
                Incentive
              Plan
                Awards:
              Number
                of
              Securities
              Underlying
                Unexercised Unearned
              Options(#)
            Option
              Exercise
              Price($)
            Option
              Expiration
              Date
            Number
                of
              Shares
                of
              Stock
                That
              Have
                Not
              Vested(#)
            Market
                Value
              of
                Shares
              of
                Stock
              That
                Have
              Not
                Vested
              ($)
            Equity
              Incentive
              Plan
                Awards:
              Number
                of
              Unearned
              Shares
                or
              Other
                Rights
              That
                Have
              Not
                Vested
              (#)
            Equity
              Incentive
              Plan
                Awards:
              Market
                or
              Payout
                Value
              of
                Unearned
              Shares
                or
              Other
                Rights
              That
                Have
              Not
                Vested
              (#)David
                Dorr
            none
            none
            none
            none
            none
            none
            none
            none
            noneBrian
                Dorr
            none
            none
            none
            none
            none
            none
            none
            none
            noneJean-Marc
                Golden
            none
            none
            none
            none
            none
            none
            none
            none
            none





31


Compensation
      of Directors





We
      do not
      compensate our directors for service on our Board of Directors.





**DIRECTOR
                COMPENSATION**Name
            Fees
                Earned or
              Paid
                in Cash
            Stock
                Awards
            Option
                Awards
            Non-Equity
              IncentivePlan
              Compensation
            Non-Qualified
              Deferred
              Compensation
              Earnings
            AllOther
              Compensation
            TotalDavid
                Dorr
            None
            None
            None
            None
            None
            None
            NoneBrian
                Dorr
            None
            None
            None
            None
            None
            None
            NoneJean-Marc
                Golden
            None
            None
            None
            None
            None
            None
            None





We
      do not have employment contracts
      with any executive officers.





Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.





The
      following table sets forth as of
      September 27, 2007, the number of outstanding common shares of the Company
      beneficially owned by (i) each person known to the Company to beneficially
      own
      more than 5% of its outstanding common shares, (ii) each director, (iii) each
      nominee for director, (iv) each executive officer listed in the Summary
      Compensation Table, and (iv) all executive officers and directors as a
      group.





**Title
                of class**
            **Name
                and address**
              **of
                beneficial owner(1)**
            **Amount
                and**
              **nature
                of**
              **beneficial
                ownership**
            **Percent
                of class****(2)**common
            David
                Dorr
            75,680,000
            
            42.826%common
            Vantage
                Group Ltd.(3)
            45,000,000
            
            25.465%common
            Brian
                Dorr
            21,820,000
            
            12.348%common
            Jean-Marc
                Golden
            10,500,000
            
            5.942%Officers
                and directors as
              a
                group (3 persons)
            
            108,000,000
            
            61.116%





(1)Address
      of those listed is c/o Life
      Exchange, Inc., 2001 Biscayne Blvd., Suite 2102, Miami, FL
      33137


(2)Based
      on an aggregate of 176,715,000 common shares outstanding as of October 1,
      2007.


(3)Lyle
      Hauser is the sole shareholder,
      officer and director of Vantage Group, Ltd.








32





**Equity
                Compensation Plan Information****Plan
                category**
            **Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights**
              
              **(a)**
            **Weighted-average
                exercise price of outstanding options, warrants and
                rights**
              
              **(b)**
            **Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))**
              
              **(c)**Equity
                compensation plans approved by security holders
            NoneEquity
                compensation plans not approved by security holders
            None**Total**








Item
                12.
            Certain
                Relationships and Related Transactions, and Director
                Independence.





David
      Dorr, Brian Dorr, and Cameron Dorr, an investor in the company, are brothers.
      David Dorr owns 42.8% of the outstanding common shares of the company; Brian
      Dorr owns 12.3% of the outstanding common shares of the company; and Cameron
      Dorr owns .6% (less than 1%) of the outstanding common shares company as of
      September 27, 2007.





David
      Dorr is the primary developer of
      the online exchange platform concept.  On March 29, 2006 Mr. Dorr
      entered into an Assignment by Inventor agreement whereby the ownership of the
      Patent Application that had been filed with the U.S. Patent office on July
      21,
      2004, patent Application No. 10/895112 and associated intellectual property
      rights were transferred to the Company. Mr. Dorr assigned the patent rights
      for
      the nominal consideration of $1.00.








Item
                13.
            Exhibits.





(A)
      EXHIBITS.





The
      following Exhibits are incorporated herein by reference or are filed with this
      report as indicated below.





EXHIBIT


NUMBER
            DESCRIPTION





2.1
            Exchange
                Agreement dated December 22, 2005*


2.2
            Agreement
                and Plan of Merger (Short Form Merger) dated March 29,
                2006*


3.1
            Articles
                of Incorporation of Life Exchange, Inc. Delaware dated January
                20,2005*


3.2
            Amendment
                to Articles of Life Exchange, Inc. Delaware dated April 6,
                2005*


3.3
            Amended
                and Restated Articles of Incorporation of Life Exchange, Inc.,
                Nevada,dated November 14, 2005*


3.4
            By-Laws*


10.1
            Stock
                Purchase Agreement dated March 8,
                2006*


10.2
            Assignment
                by Inventor dated March 31, 2006*


10.3
            Form
                of Broker User Agreement*


10.4
            Form
                of Provider User Agreement*


23.1
            Consent
                of Auditor*


31.1
            Certification
                pursuant to Exchange Act Rules 13a-14 and 15d-14 as adoptedpursuant
                to
                Section 302 of the Sarbanes-Oxley Act of
                2002.


32.1
            Certification
                pursuant to 18 U.S.C. Section 1350


_______________


*
      Previously filed





33


Item
                14.
            Principal
                Accountant Fees and Services.





Audit
      and
      Non-Audit Fees





Aggregate
      fees for professional
      services rendered for the Company by Jewett,
      Schwartz, Wolfe & Associatesfor the fiscal years ended May 31,
      2007 and 2006 are set forth below.  The aggregate fees included in the
      Audit category are fees billed for the fiscal years for the audit of the
      Company's annual financial statements and review of financial statements and
      statutory and regulatory filings or engagements. The aggregate fees included
      in
      each of the other categories are fees billed in the fiscal years.




Fiscal
                  Year Ending
              Fiscal
                  Year EndingJune
                  30, 2007
              June
                  30, 2006Audit
                  Fees
              $22,300
              $15,500Audit-Related
                  Fees
              None
              NoneTax
                  Fees
              None
              NoneTOTAL
              $22,300
              $15,500




Audit
      Fees for the fiscal years ended
      June 30, 2007 and 2006 were for professional services rendered for the audits
      of
      the consolidated financial statements of the Company, quarterly review of the
      financial statements included in Quarterly Reports on Form 10-QSB, consents,
      and
      other assistance required to complete the year end audit of the consolidated
      financial statements.





Audit-Related
      Fees as of the fiscal
      years ended June 30, 2007 and 2006 were for assurance and related services
      reasonably related to the performance of the audit or review of financial
      statements and not reported under the caption Audit Fees.





Tax
      Fees as of the fiscal years ended
      June 30, 2007 and 2006 were for professional services related to tax compliance,
      tax authority audit support and tax planning.





There
      were no fees that were classified
      as All Other Fees as of the fiscal years ended June 30, 2007 and
      2006.





34


As
      the Company does not have a formal
      audit committee, the services described above were not approved by the audit
      committee under the de minimus exception provided by Rule 2- 1(c)(7)(i)(C)
      under
      Regulation S-X. Further, as the Company does not have a formal audit committee,
      the Company does not have audit committee pre-approval policies and
      procedures.





The
      Company's Board of Directors reviews and approves audit and permissible
      non-audit services performed by its independent accountants, as well as the
      fees
      charged for such services. In its review of non-audit service fees and its
      appointment of Jewett,
      Schwartz, Wolfe & Associatesas the Company's independent
      accountants, the Board of Directors considered whether the provision of such
      services is compatible with maintaining independence. All of the services
      provided and fees charged by Jewett,
      Schwartz, Wolfe & Associates in 2007 were approved by the Board of
      Directors.





Signatures





In
      accordance with Section 13 or 15(d)
      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.





Life
      Exchange, Inc.





/s/
      David Dorr


By:  David
      Dorr


President,
      Chief Executive Officer


Date:
      October 2, 2007





In
      accordance with the Exchange Act,
      this report has been signed below by the following persons on behalf of the
      registrant and in the capacities and on the dates indicated:





/s/
      David Dorr


By:  David
      Dorr, Director


Date:  October
      2, 2007








/s/
      Brian Dorr


By:  Brian
      Dorr, Director


Date:  October
      2, 2007








/s/
      Jean-Marc Golden


By:  Jean-Marc
      Golden, Director


Date:  October
      2, 2007






35