American Real Estate Assets S1 IPO registration

SECURITIES AND EXCHANGE COMMISSION

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FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

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AMERICAN REAL ESTATE ASSETS, INC.

(Exact Name of Small Business Issuer in its Charter)

Delaware		26-3538991
(State of Incorporation)	(Primary Standard Classification Code)	(IRS Employer ID No.)

10505 Sorrento Valley Road, Suite 450

San Diego, CA 92121

(858) 638-7020

(Address and Telephone Number of Registrant’s Principal

Executive Offices and Principal Place of Business)

StockTrans, Inc.

44 West Lancaster Avenue

Ardmore, PA 19003

(610) 649-7300

(Name, Address and Telephone Number of Agent for Service)

Copies of communications to:

GREGG E. JACLIN, ESQ.

ANSLOW & JACLIN, LLP

195 Route 9 South, Suite204

Manalapan, NJ 07726

TELEPHONE NO.: (732) 409-1212

FACSIMILE NO.: (732) 577-1188

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration Statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

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CALCULATION OF REGISTRATION FEE

Title of Each Class Of Securities to be Registered	Amount to be Registered	Proposed Maximum Aggregate Offering Price per share	Proposed Maximum Aggregate Offering Price	Amount of Registration fee

Common Stock, par value $0.0001	1,665,800	$0.50	$832,900	$46.48

The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(o). Our common stock is not traded on any national exchange and in accordance with Rule 457; the offering price was determined by the price shareholders were sold to in a private placement memorandum. The price of $0.50 is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board at which time the shares may be sold at prevailing market prices or privately negotiated prices. The fixed price of $0.50 has been determined as the selling price based upon the original purchase price paid by the selling shareholders of $0.25 plus an increase of $0.25 based on the fact the shares will be liquid and registered. The offering is being undertaken on a best efforts basis. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED May , 2009

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the securities act of 1933 or until the registration statement shall become effective on such date as the commission, acting pursuant to said section 8(a), may determine.

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1,665,800 SHARES OF

AMERICAN REAL ESTATE ASSETS, INC.

COMMON STOCK

The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. Our common stock is presently not traded on any market or securities exchange and have no voting rights. The 1,665,800 shares of our common stock can be sold by selling security holders at a fixed price of $0.50 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders.

THE COMPANY IS CONSIDERED TO BE IN UNSOUND FINANCIAL CONDITION. PERSONS SHOULD NOT INVEST UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENTS.

THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING “RISK FACTORS” BEGINNING ON PAGE 3.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The Date of This Prospectus Is: May , 2009

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TABLE OF CONTENTS

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ITEM 3. Summary Information, Risk Factors and Ratio of Earnings to Fixed Charges.

PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing in the common stock. You should carefully read the entire prospectus, including “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Financial Statements, before making an investment decision .

ABOUT OUR COMPANY

We were incorporated on October 10, 2008 in the State of Delaware. On October 14, 2008, David and Christina Wise, as Co-Trustees of the Wise Family Trust, our Chairman of the Board and Chief Executive Officer respectively was issued 30,000,000 common stock shares, J. Denny Rochford, our Secretary was issued 10,000,000 common stock shares and Allen Blunt, our Treasurer was issued 20,000,000 common stock shares for pre-incorporation services.

Based on our financial history since October 10, 2008 our auditor has expressed substantial doubt as to our ability to continue as a going concern. We are a development stage company that has not generated revenues since inception. From inception to January 31, 2009 we have incurred a net loss of $76,523. If we cannot obtain sufficient funding, we may have to delay the implementation of our business strategy. As of January 31, 2009 we had a total of $6,155.

American Real Estate Assets, Inc. (AREA) is created to provide service to investors of commercial property. We have created an avenue for real estate acquisition to benefit the investors of AREA by building revenue and equity through maximizing the highest and best use of real properties in the commercial sectors. The managing members at AREA have continually succeeded in providing best in class service to their clientele.

Overall, the company can be characterized as an aggressive, responsive, and dependable organization dedicated to the maximization of shareholder wealth through the strategic value maximization of owned properties.

The primary objective of AREA is to provide a profitable return on the members’ investments that outpace the S&P 500 on a year-to-year basis.

WHERE YOU CAN FIND US

Our principal executive office location and mailing address is 10505 Sorrento Valley Road, Suite 450, San Diego, CA 92121. Our telephone number is (858) 688-6858.

Terms of the Offering

The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. The selling stockholders are selling shares of common stock covered by this prospectus for their own account.

We will not receive any of the proceeds from the sale of these shares. The offering price of $0.50 was determined by the price shares were sold to our shareholders in a private placement memorandum of $0.25 plus an increase of $0.25 based on the fact the shares will be liquid and registered and is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board, at which time the shares may be sold at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders.

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SUMMARY FINANCIAL DATA

The following summary financial data should be read in conjunction with “Management’s Discussion and Analysis”, “Plan of Operation” and the Financial Statements and Notes thereto, included elsewhere in this prospectus. The statement of operations and balance sheet data from inception through January 31, 2009 are derived from our audited financial statements.

	For the Period from October 14, 2008 to January 31, 2009
STATEMENT OF OPERATIONS

Revenues	$	-
Total Operating Expenses	$	73,523
Net Loss	$	(76,523)

	As of January 31, 2009
BALANCE SHEET DATA

Cash	$	6,155
Total Assets	$	47,477
Total Liabilities	$	100,000
Stockholders’ Deficit	$	(52,523)

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Please note that throughout this prospectus, the words “we”, “our” or “us” refer to the Company and not to the selling stockholders.

WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL DEVELOPING COMPANY.

We were incorporated in Delaware on October 10, 2008. We have no significant financial resources and limited revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities

WE WILL REQUIRE FINANCING TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND OUR INABILITY TO OBTAIN SUCH FINANCING COULD PROHIBIT US FROM EXECUTING OUR BUSINESS PLAN AND CAUSE US TO SLOW DOWN OUR EXPANSION OF OPERATIONS.

We will need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our capital requirements to implement our business strategy will be significant. Moreover, in addition to monies needed to continue operations over the next twelve months, we anticipate requiring additional funds in order to significantly expand our operations and acquire the operating entities as set forth in our plan of operations. No assurance can be given that such funds will be available or, if available, will be on commercially reasonable terms satisfactory to us. There can be no assurance that we will be able to obtain financing if and when it is needed on terms we deem acceptable. If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition.

OUR AUDITOR HAS EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN.

Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern. We are a development stage company that has never generated any revenue. From inception to January 31, 2009 we have incurred a net loss of $76,523. If we cannot obtain sufficient funding, we may have to delay the implementation of our business strategy. As of January 31, 2009 we had a total of $6,155. If we cannot obtain sufficient funding we may have to delay the implementation of our business strategy.

OUR FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICE OF DR. DAVID WISE, DR. CHRISTY WISE, J DENNY ROCHFORD, ALLEN BLUNT. WITHOUT THEIR CONTINUED SERVICE, WE MAY BE FORCED TO INTERRUPT OR EVENTUALLY CEASE OUR OPERATIONS.

We are presently dependent to a great extent upon the experience, abilities and continued services of Dr. David Wise, Dr. Christy Wise, J Denny Rochford, Allen Blunt, our officers. We currently do not have employment agreements with Dr. David Wise, Dr. Christy Wise, J Denny Rochford, or Allen Blunt. The loss of the services of any one of our officers could have a material adverse effect on our business, financial condition or results of operation.

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IF OUR CASH FLOWS AND CAPITAL RESOURCES ARE INSUFFICIENT TO SERVICE OUR INDEBTEDNESS, WE MAY BE FORCED TO REDUCE OR DELAY CAPITAL EXPENDITURES, SELL ASSETS, SEEK ADDITIONAL CAPITAL OR RESTRUCTURE OR REFINANCE OUR INDEBTEDNESS, INCLUDING THE NOTES.

If our cash flows and capital resources are insufficient to service our indebtedness, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness, including the notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. In addition, the terms of existing or future debt agreements, including our senior secured credit facilities and the indenture governing the notes, may restrict us from adopting some of these alternatives. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions for fair market value or at all. Furthermore, any proceeds that we could realize from any such dispositions may not be adequate to meet our debt service obligations then due. The Sponsors have no continuing obligation to provide us with debt or equity financing.

THE RECENT SEVERE ECONOMIC DOWNTURN AND ADVERSE CONDITIONS IN THE LOCAL, REGIONAL, NATIONAL AND GLOBAL MARKETS COULD NEGATIVELY AFFECT OUR OPERATIONS, AND MAY CONTINUE TO NEGATIVELY AFFECT OUR OPERATIONS IN THE FUTURE AND COULD NEGATIVELY IMPACT OUR ABILITY TO ACCESS FINANCING.

The recent severe economic downturn and adverse conditions in the local, regional, national and global markets could negatively affect our operations, and may continue to negatively affect our operations in the future and could negatively impact our ability to access financing. During periods of economic contraction such as the current period, our revenues may decrease while some of our costs remain fixed or even increase, resulting in decreased earnings. The economic risks affecting AREA are inflation, the recession, and rising interest rates. The best strategy for AREA is rapid acquisition (to take advantage of today’s low interest rates) and diversification through smaller investments in a greater number of properties.

WE MAY BE UNABLE TO RETAIN OUR KEY EMPLOYEES OR ATTRACT, ASSIMILATE AND RETAIN OTHER HIGHLY QUALIFIED EMPLOYEES IN THE FUTURE.

We will need to attract, hire and retain talented management and other highly skilled employees with experience and expertise in all areas of our business to be successful. Competition for employees in our industry is highly competitive. We may be unable to retain our key employees or attract, assimilate and retain other highly qualified employees in the future. If we are not able to hire and retain key employees our business and financial condition could be harmed.

WE ARE SUBJECT TO GENERAL REAL ESTATE RISKS AND THE VALUE OF OUR REAL ESTATE ASSETS MAY FLUCTUATE.

Our primary assets are expected to consist of real estate and, in particular, commercial properties, which are subject to a variety of risks. The yields available from the equity and mortgage investments in real estate depend on the amount of income generated and expenses incurred from the operations of such properties. If the properties do not generate sufficient income to meet operating expenses, including debt service and capital expenditures, our cash flow and ability to make distributions will be adversely affected. The performance of the economy in each of the areas in which the properties are located affects occupancy, market rental rates, expenses and property values.

WE CANNOT GIVE YOU ANY ASSURANCE THAT WE WILL NOT ISSUE ADDITIONAL COMMON OR PREFERRED SHARES, OR OPTIONS OR WARRANTS TO PURCHASE THOSE SHARES, UNDER CIRCUMSTANCES WE MAY DEEM APPROPRIATE AT THE TIME.

Our issuance of additional shares of our common stock, or options or warrants to purchase those shares, would dilute your proportionate ownership and voting rights. Our issuance of shares of preferred stock, or options or warrants to purchase those shares, could negatively impact the value of your shares of common stock as the result of preferential voting rights or veto powers, dividend rights, disproportionate rights to appoint directors to our board, conversion rights, redemption rights and liquidation. Our board may generally issue those common and preferred shares, or options or warrants to purchase those shares, without further approval by our stockholders based upon such factors as our board of directors may deem relevant at that time. Any preferred shares we may issue shall have such rights, preferences, privileges and restrictions as may be designated from time-to-time by our board, including preferential dividend rights, voting rights, conversion rights, redemption rights and liquidation provisions.

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WE MAY HAVE DIFFICULTY IN ATTRACTING AND RETAINING MANAGEMENT AND OUTSIDE INDEPENDENT MEMBERS TO OUR BOARD OF DIRECTORS AS A RESULT OF THEIR CONCERNS RELATING TO THEIR INCREASED PERSONAL EXPOSURE TO LAWSUITS AND STOCKHOLDER CLAIMS BY VIRTUE OF HOLDING THESE POSITIONS IN A PUBLICLY HELD COMPANY.

The directors and management of publicly traded corporations are increasingly concerned with the extent of their personal exposure to lawsuits and stockholder claims, as well as governmental and creditor claims which may be made against them, particularly in view of recent changes in securities laws imposing additional duties, obligations and liabilities on management and directors. Due to these perceived risks, directors and management are also becoming increasingly concerned with the availability of directors and officers liability insurance to pay on a timely basis the costs incurred in defending such claims. We currently do not carry limited directors and officer’s liability insurance. Directors and officers liability insurance has recently become much more expensive and difficult to obtain. If we are unable to provide directors and officers liability insurance at affordable rates, it may become increasingly more difficult to attract and retain qualified outside directors to serve on our board of directors.

VOTING CONTROL OF OUR COMMON STOCK IS POSSESSED BY DAVID AND CHRISTINA WISE, J. DENNY ROCHFORD AND ALLEN BLUNT. ADDITIONALLY, THIS CONCENTRATION OF OWNERSHIP COULD DISCOURAGE OR PREVENT A POTENTIAL TAKEOVER OF AMERICAN REAL ESTATE ASSETS, INC. THAT MIGHT OTHERWISE RESULT IN YOUR RECEIVING A PREMIUM OVER THE MARKET PRICE FOR YOUR COMMON STOCK.

The voting control of our common stock is possessed by David and Christina Wise, as Co-Trustees of the Wise Family Trust, our Chairman of the Board and Chief Executive Officer respectively was issued 30,000,000 common stock shares, J. Denny Rochford, our Secretary was issued 10,000,000 common stock shares and Allen Blunt, our Treasurer was issued 20,000,000 common stock shares for pre-incorporation services. Holders of our common stock are entitled to one non-cumulative vote on all matters submitted to our stockholders. The result of this concentration of ownership voting control is that they have the ability to control all matters submitted to our stockholders for approval and to control our management and affairs, including extraordinary transactions such as mergers and other changes of corporate control, and going private transactions. Additionally, this concentration of voting power could discourage or prevent a potential takeover of the company that might otherwise result in your receiving a premium over the market price for your common stock.

THE ELIMINATION OF MONETARY LIABILITY AGAINST OUR DIRECTORS, OFFICERS AND EMPLOYEES UNDER OUR ARTICLES OF INCORPORATION AND THE EXISTENCE OF INDEMNIFICATION RIGHTS TO OUR DIRECTORS, OFFICERS AND EMPLOYEES MAY RESULT IN SUBSTANTIAL EXPENDITURES BY AMERICAN REAL ESTATE ASSETS, INC. AND MAY DISCOURAGE LAWSUITS AGAINST OUR DIRECTORS, OFFICERS AND EMPLOYEES.

Our articles of incorporation contain provisions, which eliminate the liability of our directors for monetary damages to us and our stockholders. Our bylaws also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers and employees. The foregoing indemnification obligations could result in our incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers and employees, which we may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit us and our stockholders.

THE OFFERING PRICE OF THE SHARES WAS SOLELY DETERMINED BASED UPON THE PRICE THE SHARES WERE SOLD IN THEIR OFFERING, AND THEREFORE SHOULD NOT BE USED AS AN INDICATOR OF THE FUTURE MARKET PRICE OF THE SECURITIES. THEREFORE, THE OFFERING PRICE BEARS NO RELATIONSHIP TO THE ACTUAL VALUE OF THE COMPANY, AND MAY MAKE OUR SHARES DIFFICULT TO SELL.

Since our shares are not listed or quoted on any exchange or quotation system, the offering price of $0.50 for the shares of common stock was determined based upon the price the shares were sold to the investors in our private placement memorandum. The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market. The offering price bears no relationship to the book value, assets or earnings of our company or any other recognized criteria of value. The offering price should not be regarded as an indicator of the future market price of the securities.

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THERE IS NO ASSURANCE OF A PUBLIC MARKET OR THAT THE COMMON STOCK WILL EVER TRADE ON A RECOGNIZED EXCHANGE. THEREFORE, YOU MAY BE UNABLE TO LIQUIDATE YOUR INVESTMENT IN OUR STOCK.

There is no established public trading market for our common stock. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.

OUR COMMON STOCK IS CONSIDERED A PENNY STOCK, WHICH IS SUBJECT TO RESTRICTIONS ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.

If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their securities.

Item 4.

USE OF PROCEEDS

The selling stockholders are selling shares of common stock covered by this prospectus for their own account. We will not receive any of the proceeds from the sale of these shares. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders.

Item 5.

DETERMINATION OF OFFERING PRICE

Since our shares are not listed or quoted on any exchange or quotation system, the offering price of the shares of common stock was determined by the price shares were sold to our shareholders in our private placement which was completed in March 2009 pursuant to an exemption under Rule 506 of Regulation D.

The offering price of the shares of our common stock does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value. The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the Over-The-Counter Bulletin Board (OTCBB) concurrently with the filing of this prospectus. In order to be quoted on the Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved.

In addition, there is no assurance that our common stock will trade at market prices in excess of the initial public offering price as prices for the common stock in any public market which may develop will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity.

Item 6.

DILUTION

The common stock to be sold by the selling shareholders is common stock that is currently issued. Accordingly, there will be no dilution to our existing shareholders.

PENNY STOCK CONSIDERATIONS

Our common stock will be penny stock; therefore, trading in our securities is subject to penny stock considerations. Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission.

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Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

Item 7.

SELLING SHAREHOLDERS

The shares being offered for sale by the selling stockholders consist of the 1,665,800 shares of our common stock held by 39 shareholders of which we sold 165,800 shares in our Regulation D Rule 506 offering completed in March 2009 and 1,500,000 to be issued pursuant to a consulting agreement with Going Public, LLC

The following table sets forth the name of the selling stockholders, the number of shares of common stock beneficially owned by each of the selling stockholders as of May 8, 2009 and the number of shares of common stock being offered by the selling stockholders. The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for sale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling stockholders.

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Name of Selling Stockholder	Shares of Common Stock owned prior to offering	Shares of common stock to be sold	Shares of common stock owned after offering	Percent of common stock owned after offering
Al-Dahhan, Abdul-majid	5,000	5,000	0	0
Balderas, Maria	1,000	1,000	0	0
Barnes, Brenda	400	400	0	0
Beatrice L. Snider Rev Trust (a)	1,000	1,000	0	0
Rincon Investment Trust (b)	800	800	0	0
Blunt, Carlton (c)	400	400	0	0
Blunt, James (d)	400	400	0	0
Blunt, Roland (e)	400	400	0	0
Bodam, Gary L.	20,000	20,000	0	0
Brewer, Chad (f)	4,000	4,000	0	0
Cantrell, Jeri	1,000	1,000	0	0
Cohen, Joseph	20,000	20,000	0	0
Dutra, Jimi and Tamara (g)	10,000	10,000	0	0
Flores, Melissa	400	400	0	0
Fortner, Chris W.	400	400	0	0
Friedman, Linda	400	400	0	0
Lamy, Christen	1,000	1,000	0	0
Moore, Terence	1,000	1,000	0	0
Moran, Michelle Marie	1,000	1,000	0	0
Murray, Ronald James	400	400	0	0
Ray, Sam (h)	2,000	2,000	0	0
Robinson, Robin L.	4,000	4,000	0	0
Russell, Michelle L.	400	400	0	0
Santos, Nina	400	400	0	0
Szakacs, Robin	60,000	60,000	0	0
Unified Equities LLC (i)	2,000	2,000	0	0
Vega, Alona Lyn (j)	2,000	2,000	0	0
Vogt, Erik	2,000	2,000	0	0
Wise, Ronald Lee (k)	2,000	2,000	0	0
Zika, George A. IV	2,000	2,000	0	0
Primiani, Marc S.	20,000	20,000	0	0
Sienna Consultants, LLC (l) (u)	1,099,956	200,000	899,956	1.30%
Carmel Valley Corporation (m)	1,797,461	200,000	1,597,461	2.31%
The Spina Group, LLC (n) (u)	1,649,934	200,000	1,449,934	2.10%
Bebeyim, LLC (o) (t) (u)	1,209,952	200,000	1,009,952	1.46%
Global Lambent, LLC (p) (t) (u)	769,969	200,000	569,969	*
Anslow & Jaclin, LLP (q)	100,000	100,000	0	0
RBS Associates (r) (u)	769,969	200,000	569,969	*
Arisa Capital, Inc. (s)	1,590,061	200,000	1,390,061	2.01%

*Less than 1%

To our knowledge, none of the selling shareholders or their beneficial owners:

1) Has had a material relationship with us other than as a shareholder at any time within the past three years; or

2) Has ever been one of our officers or directors or an officer or director of our predecessors or affiliates; or

3) Are a broker-dealer or affiliated with a broker-dealer.

a	Beatrice L. Snider, Trustor

b	Joe Biscone, Trustor

c	Carlton Blunt is the brother of Allen Blunt

d	James Blunt is the father of Allen Blunt

e	Roland Blunt is the brother of Allen Blunt

f	Joint Tenants Chad and Karoline Brewer are husband and wife

g	Joint Tenants Jimi and Tamara Dutra are husband and wife

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h	Joint Tenants Sam and Angela Ray are husband and wife

i	Albert M. De Luca is the Sole Member and Manager of Unified Equities LLC

j	Alona Vega is the sister of Allen Blunt

k	Ronald Wise is the uncle of David Wise

l	Lauren F. Fishman is the sole Member of Sienna Consultants, LLC.

m	David Rushing is the President of Carmel Valley Corporation.

n	Ralph Spina is the sole Member of The Spina Group, LLC.

o	The Members of Bebeyim, LLC are Marvin K. Rowe II and Birsen Uysal-Rowe, husband and wife.

p	Jeffrey W. Rowe is the sole Member of Global Lambent, LLC.

q	Gregg E. Jaclin is a partner of Anslow & Jaclin, LLP.

r	Dr. Ronald Schaefer is the President of RBS Associates.

s	Roger Coleman is the President of Arisa Capital, Inc.

t	Jeffrey W. Rowe and Marvin K. Rowe II are brothers.

u	Ralph Spina, Lauren F. Fishman, Jeffrey W. Rowe, Marvin K. Rowe II, and Dr. Ronald Schaefer are all employees or agents of Going Public, LLC.

Item 8.

PLAN OF DISTRIBUTION

The selling security holders may sell some or all of their shares at a fixed price of $0.50 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Prior to being quoted on the OTCBB, shareholders may sell their shares in private transactions to other individuals. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the Over-The-Counter Bulletin Board (OTCBB) concurrently with the filing of this prospectus. In order to be quoted on the Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. However, sales by selling security holder must be made at the fixed price of $0.50 until a market develops for the stock.

Once a market has been developed for our common stock, the shares may be sold or distributed from time to time by the selling stockholders, who may be deemed to be underwriters, directly to one or more purchasers or through brokers or dealers who act solely as agents, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following method.

ordinary brokers transactions, which may include long or short sales,

o	transactions involving cross or block trades on any securities or market where our common stock is trading, market where our common stock is trading,

o	through direct sales to purchasers or sales effected through agents,

o	through transactions in options, swaps or other derivatives (whether exchange listed of otherwise), or exchange listed or otherwise), or

o	any combination of the foregoing.

In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales were permitted, of shares in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus.

Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the selling stockholders nor we can presently estimate the amount of such compensation. We know of no existing arrangements between the selling stockholders and any other stockholder, broker, dealer or agent relating to the sale or distribution of the shares. We will not receive any proceeds from the sale of the shares of the selling security holders pursuant to this prospectus. We have agreed to bear the expenses of the registration of the shares, including legal and accounting fees, and such expenses are estimated to be approximately $50,000.

Notwithstanding anything set forth herein, no FINRA member will charge commissions that exceed 8% of the total proceeds of the offering.

-13-

Item 9.

DESCRIPTION OF SECURITIES

General

Our authorized capital stock consists of 200,000,000 Shares of common stock, $0.0001 par value per Share. There are no provisions in our charter or by-laws that would delay, defer or prevent a change in our control.

Common Stock

We are authorized to issue 200,000,000 shares of common stock, $0.0001 par value per share. Currently there are 60,092,000 common shares outstanding.

The holders of our common stock have equal ratable rights to dividends from funds legally available if and when declared by our board of directors and are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs. Our common stock does not provide the right to a preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights. Our common stock holders are entitled to one non-cumulative vote per share on all matters on which shareholders may vote.

We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the state of Delaware for a more complete description of the rights and liabilities of holders of our securities. All material terms of our common stock have been addressed in this section.

Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.

Preferred Stock

We are authorized to issue 50,000,000 shares of preferred stock, 0.0001 par value per share. The terms of the preferred shares are at the discretion of the board of directors. Currently there are 0 preferred shares issued and outstanding.

Dividends

We have not paid any cash dividends to shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

Warrants

There are no outstanding warrants to purchase our securities.

Options

There are no options to purchase our securities outstanding.

ITEM.10

INTERESTS OF NAMED EXPERTS AND COUNSEL

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

-14-

The financial statements included in this prospectus and the registration statement have been audited by Berman & Company, P.A. to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

ITEM.11 Information with Respect to the Registrant.

ORGANIZATION WITHIN LAST FIVE YEARS

DESCRIPTION OF BUSINESS

GENERAL

American Real Estate Assets, Inc. (AREA) was created to provide service to stakeholders of commercial property. AREA plans to create a beneficial avenue for real estate acquisition by building revenue and equity through maximizing the highest and best use of real properties in the commercial sectors.

AREA will attempt to balance the success and well being of its tenants with an aggressive, responsive, and dependable dedication to the maximization of shareholder wealth. The belief is that through the strategic value maximization of owned properties, we can bring communities together.

AREA’s mission is to provide profitable returns on the stakeholders’ investments that outpace the S&P 500 on a year-to-year basis. More specifically, the target return on investment for each property is between 15% and 20% per annum.

To accomplish this task, AREA plans to target real property as “investment to hold” opportunities. AREA will attempt to purchas real property in the commercial sectors that are undervalued or underdeveloped with upside potential. While it makes sense to buy and hold, AREA will consider a buy to sell on a case-by-case basis.

AREA plans to expand nationally to serve its investors in multiple markets that provide the greatest returns. AREA will initially focus on Texas due to the number of properties available that fit the current strategy. AREA has also pinpointed Louisiana, Utah, and Washington State as prime investment locales because they fit the investment strategy and offer the highest opportunity for success.

ACQUISITION OBJECTIVES

The markets for acquisition consist of anywhere in the United States. We have purchase and leasing experience in 41 states and over 250 markets. Properties that are located in populations of 200,000 or more with moderate income streams are the areas of choice. The quality of any investment is rated by the amount of improvements required versus the property valuation, the initial cash outlay to finance a property, the quality of the tenants currently existing in a given property, and the lease structure of the tenants. Giving weight to each factor will enable the Company to reach its target goals by choosing its properties selectively.

The real property product consists of small commercial retail properties and multi-family housing of 35 units and up. In addition, the commercial product sought after will consist of single net properties consisting of investment grade tenants. Investment grade will be measured by their bond rating or Dun & Bradstreet rating.

COMPETITION

While many firms exist in this capacity, ultimately how well AREA succeeds is directly related to its own investments and not to the competition. AREA will seek to first serve a niche market that most companies might not otherwise consider. Larger firms tend to focus on larger projects. While the returns may not be as great, they are able to enter the market segment by spending larger amounts of capital, generally not available to the small and medium sized investor. There are few firms looking for properties in the $300,000 to $2,000,000 category. That lack of demand, along with this year’s turn toward a buyer’s market will enable us to secure several properties at bargain prices before the market begins its eventual turn around. Our success is derived from past experience of its managers and the focus on properties ‘below the radar’ of the larger firms.

MARKETING

We are a new, start-up, company and have not yet commenced any marketing programs. Due to the nature of our business, we will not use national advertising or promotions. Instead, we market the company mostly via the website, email announcements and web casting. Our website address is www.americanrealestateassets.com/. Otherwise, the company doesn't require much in the way of marketing because we are an acquisition firm and don't cater to the general public.

-15-

DESCRIPTION OF PROPERTY

Our business office is located at 10505 Sorrento Valley Road, Suite 450, San Diego, CA 92121. Currently, this space is sufficient to meet our needs; however, if we expand our business to a significant degree, we will have to find a larger space.

LEGAL PROCEEDINGS

There are currently no legal proceedings pending or threatened against us.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is presently no public market for our shares of common stock. We anticipate applying for trading of our common stock on the Over-the-Counter Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares of common stock will be traded on the Bulletin Board or, if traded, that a public market will materialize.

Holders of Our Common Stock

As of May 11, 2009, we had 49 shareholders of our common stock.

Rule 144 Shares

As of May 2009 there are no shares of our common stock which are currently available for sale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. After October 2009, the 60,000,000 shares of our common stock held by David Wise, Christy Wise, J. Denny Rochford and Allen Blunt will become available for sale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. After May 2010, the 165,800 shares of our common stock held by the 31 shareholders who purchased their shares in the Regulation D 506 offering by us will become available for sale to the public without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company’s common stock for at least six months is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company. Under Rule 144(k), a person who is not one of the company’s affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least one year, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

Stock Option Grants

To date, we have granted no stock options.

Registration Rights

In our Consulting Agreement with Going Public, LLC (“Consultant”), we granted them piggy back registration rights whereby if we proposed to register our stock or other securities under the Securities Act of 1933, as amended (the “Securities Act”), including a registration effected by the us for shareholders, we would, at such time, promptly give Consultant written notice of such registration, if Consultant or its designees hold shares of restricted stock. Upon the written request of Consultant given within twenty (20) days after mailing of such notice buy the us, the we would cause to register under the Securities Act, at our expense, all restricted shares of the Consultant, or Consultant’s designees or transferees, requested by the Consultant to be registered.

-16-

AVAILABLE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered hereby. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedule thereto, certain parts of which are omitted in accordance with the rules and regulations of the SEC. For further information regarding our common stock and our company, please review the registration statement, including exhibits, schedules and reports filed as a part thereof. Statements in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement, set forth the material terms of such contract or other document but are not necessarily complete, and in each instance reference is made to the copy of such document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.

We are also subject to the informational requirements of the Exchange Act which requires us to file reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information along with the registration statement, including the exhibits and schedules thereto, may be inspected at public reference facilities of the SEC at 100 F Street N.E., Washington D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at prescribed rates. You may call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Because we file documents electronically with the SEC, you may also obtain this information by visiting the SEC’s Internet website at http://www.sec.gov.

-17-

American Real Estate Assets, Inc.

(A Development Stage Company)

Financial Statements

January 31, 2009

CONTENTS

	Page(s)
Report of Independent Registered Public Accounting Firm	F-1

Balance Sheet – As of January 31, 2009	F-2

Statement of Operations –
For the Period from October 14, 2008 (Inception) to January 31, 2009	F-3

Statement of Changes in Stockholders’ Deficit –
For the Period from October 14, 2008 (Inception) to January 31, 2009	F-4

Statement of Cash Flows –
For the Period from October 14, 2008 (Inception) to January 31, 2009	F-5

Notes to Financial Statements	F-6 - F-13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of:

American Real Estate Assets, Inc.

We have audited the accompanying balance sheet of American Real Estate Assets, Inc. (a development stage company) as of January 31, 2009, and the related statements of operations, changes in stockholder’s deficit and cash flows for the period from October 14, 2008 (inception) to January 31, 2009. 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 audit.

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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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 audit provides 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 American Real Estate Assets, Inc (a development stage company) as of January 31, 2009, and the results of its operations and its cash flows for the period from October 14, 2008 (inception) to January 31, 2009, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has a net loss and deficit accumulated during the development stage of $76,523 for the period ended January 31, 2009 and net cash of $8,695 used in operating activities and a working capital deficit of $55,673 at January 31, 2009. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan in regards to these matters is also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Berman & Company, P.A.

Boca Raton, Florida

March 5, 2009

551 NW 77th Street. Suite 107 • Boca Raton, FL 33487

Phone: (561) 864-4444 • Fax: (561) 892-3715

www.bermanecom • info@bermancpas,corn

Registered with the PCAOB • Member AICPA Center for Audit Quality

Member American Institute of Certified Public Accountants

Member Florida Institute of Certified Public Accountants

F-1

American Real Estate Assets, Inc
(A Development Stage Company)
Balance Sheet
January 31, 2009

Assets

Current Assets
Cash	$	6,155
Prepaid		38,172
Total Current Assets		44,327

Other Assets
Deposit - related party		3,150

Total Assets	$	47,477

Liabilities and Stockholders' Deficit

Current Liabilities
Note payable	$	100,000
Total Current Liabilities		100,000

Stockholders' Deficit
Preferred stock, $0.0001 par value, 50,000,000 shares authorized;
none issued and outstanding		-
Common stock, $0.0001 par value, 200,000,000 shares authorized;
60,092,000 shares issued and outstanding		6,009
Additional paid-in capital		25,991
Deficit accumulated during the development stage		(76,523	)
Subscription receivable		(8,000	)
Total Stockholders' Deficit		(52,523	)

Total Liabilities and Stockholders' Deficit	$	47,477

See accompanying notes to financial statements

F-2

American Real Estate Assets, Inc
(A Development Stage Company)
Statement of Operations
For the Period from October 14, 2008 (Inception) to January 31, 2009


Operating Expenses
General and administrative	$	73,523
Total Operating Expenses		73,523

Loss from Operations		(73,523	)

Other Expense
Interest expense		3,000
Total Other Expense		3,000

Net Loss	$	(76,523	)

Net Loss per Share - Basic and Diluted	$	(0.00	)

Weighted Average Number of Shares Outstanding
During the Period - Basic and Diluted		60,007,908

See accompanying notes to financial statements

F-3

American Real Estate Assets, Inc
(A Development Stage Company)
Statement of Changes in Stockholders' Deficit
For the Period from October 14, 2008 (Inception) to January 31, 2009


							Deficit
	Common Stock,				Additional		Accumulated						Total
	$0.0001 Par Value				Paid In		During the			Subscription			Stockholders'
	Shares		Amount		Capital		Development Stage			Receivable			Deficit

Common stock issued for pre-incorporation services - founders ($0.0001/share)		60,000,000	$	6,000	$	-	$	-		$	-		$	6,000

Common stock issued for cash ($0.25/share)		92,000		9		22,991		-			(8,000	)		15,000

Contributed capital - related party		-		-		3,000		-			-			3,000

Net loss for the period from October 14, 2008 (inception) to January 31, 2009		-		-		-		(76,523	)		-			(76,523	)

Balance - January 31, 2009		60,092,000	$	6,009	$	25,991	$	(76,523	)	$	(8,000	)	$	(52,523	)

See accompanying notes to financial statements

F-4

American Real Estate Assets, Inc
Statement of Cash Flows
For the Period from October 14, 2008 (Inception) to January 31, 2009

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(76,523	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock issued for services - founders		6,000
Amortization of prepaid consulting services		61,828
Net Cash Used In Operating Activities		(8,695	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit - related party		(3,150	)
Net Cash Used in Investing Activities		(3,150	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		15,000
Contributed capital - related party		3,000
Net Cash Provided By Financing Activities		18,000

Net Increase in Cash		6,155

Cash - Beginning of Period		-

Cash - End of Period	$	6,155

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes	$	-
Interest	$	3,000

SUPPLEMENTARY DISCLOSURE OF NONCASH FINANCING TRANSACTIONS:
Note payable issued for future services	$	100,000
Stock issued for subscription receivable	$	8,000

See accompanying notes to financial statements

F-5

American Real Estate Assets, Inc.

(A Development Stage Company)

Notes to Financial Statements

January 31, 2009

Note 1 Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

American Real Estate Assets Inc (the “Company”), was incorporated in the State of Delaware on October 14, 2008. The Company is headquartered in California.

The Company intends to become a real estate acquisition, development, and management company.

Development Stage

The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan. The Company has not generated any revenues since inception.

Risks and Uncertainties

The Company's operations will be subject to significant risk and uncertainties including financial, operational, regulatory and other risks associated with a development stage company, including the potential risk of business failure.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. A significant estimate in 2009 included a 100% valuation allowance for deferred taxes due to the Company’s continuing and expected future losses.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no cash equivalents at January 31, 2009.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At January 31, 2009, there were no balances that exceeded the federally insured limit.

F-6

American Real Estate Assets, Inc.

(A Development Stage Company)

Notes to Financial Statements

January 31, 2009

Earnings per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. For the period from October 14, 2008 (inception) to January 31, 2009, the Company had no common stock equivalents that could potentially dilute future earnings (loss) per share; hence, a separate computation of diluted earnings (loss) per share is not presented, as the Company reflects a net loss and the effect of considering any common stock equivalents if outstanding would have been anti-dilutive.

Stock-Based Compensation

All share-based payments to employees will be recorded and expensed in the statement of operations as applicable under SFAS No. 123R “Share-Based Payment”.

Non-Employee Stock Based Compensation

Stock-based compensation awards issued to non-employees for services will be recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Emerging Issues Task Force Issue EITF No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” (“EITF 96-18”). For the period from October 14, 2008 (inception) to January 31, 2009, the Company has not issued any stock based compensation to third parties.

Income Taxes

The Company accounts for income taxes under the liability method in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company adopted the provisions of FASB Interpretation No. 48; “Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company’s tax positions and tax benefits, which may require periodic adjustments. At January 31, 2009, the Company did not record any liabilities for uncertain tax positions.

F-7

American Real Estate Assets, Inc.

(A Development Stage Company)

Notes to Financial Statements

January 31, 2009

Fair Value of Financial Instruments

The carrying amount of the Company’s short-term financial instruments, including prepaid and note due to a third party approximates fair value due to the relatively short period to maturity for these instruments.

Segment Information

The Company follows Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information." During 2009, the Company only operated in one segment; therefore, segment information has not been presented.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing an asset or liability. It also defines fair value and established a hierarchy that prioritizes the information used to develop assumptions. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 157 did not have a material effect on the Company’s financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value. The unrealized gains and losses on items for which the fair value option has been elected should be reported in earnings. The decision to elect the fair value option is determined on an instrument-by-instrument basis, should be applied to an entire instrument and is irrevocable. Assets and liabilities measured at fair values pursuant to the fair value option should be reported separately in the balance sheet from those instruments measured using other measurement attributes. SFAS No. 159 is effective as of the beginning of the Company’s 2009 fiscal year. The adoption of SFAS No. 159 did not have a material effect on the Company’s financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, changes in a parent’s ownership of a noncontrolling interest, calculation and disclosure of the consolidated net income attributable to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent retains its controlling financial interest and fair value measurement of any retained noncontrolling equity investment. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The adoption of SFAS No. 160 is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

F-8

American Real Estate Assets, Inc.

(A Development Stage Company)

Notes to Financial Statements

January 31, 2009

In December 2007, the FASB issued SFAS 141R, “Business Combinations” (“SFAS 141R”), which replaces FASB SFAS 141, “Business Combinations”. This Statement retains the fundamental requirements in SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R will require an entity to record separately from the business combination the direct costs, where previously these costs were included in the total allocated cost of the acquisition. SFAS 141R will require an entity to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, at their fair values as of that date. This compares to the cost allocation method previously required by SFAS No. 141. SFAS 141R will require an entity to recognize as an asset or liability at fair value for certain contingencies, either contractual or non-contractual, if certain criteria are met. Finally, SFAS 141R will require an entity to recognize contingent consideration at the date of acquisition, based on the fair value at that date. This Statement will be effective for business combinations completed on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption of this standard is not permitted and the standards are to be applied prospectively only. Upon adoption of this standard, there would be no impact to the Company’s results of operations and financial condition for acquisitions previously completed. The adoption of SFAS No. 141R is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

In January 2008, the SEC released SAB No. 110, which amends SAB No. 107 which provided a simplified approach for estimating the expected term of a “plain vanilla” option, which is required for application of the Black-Scholes option pricing model (and other models) for valuing share options. At the time, the Staff acknowledged that, for companies choosing not to rely on their own historical option exercise data (i.e., because such data did not provide a reasonable basis for estimating the term), information about exercise patterns with respect to plain vanilla options granted by other companies might not be available in the near term; accordingly, in SAB No. 107, the Staff permitted use of a simplified approach for estimating the term of plain vanilla options granted on or before December 31, 2007. The information concerning exercise behavior that the Staff contemplated would be available by such date has not materialized for many companies. Thus, in SAB No. 110, the Staff continues to allow use of the simplified rule for estimating the expected term of plain vanilla options until such time as the relevant data becomes widely available. The Company does not expect its adoption of SAB No. 110 to have a material impact on its financial position, results of operations or cash flows.

In March 2008, the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments and Hedging Activities—An Amendment of FASB Statement No. 133.” (“SFAS 161”). SFAS 161 establishes the disclosure requirements for derivative instruments and for hedging activities with the intent to provide financial statement users with an enhanced understanding of the entity’s use of derivative instruments, the accounting of derivative instruments and related hedged items under Statement 133 and its related interpretations, and the effects of these instruments on the entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2008. The Company does not expect its adoption of SFAS 161 to have a material impact on its financial position, results of operations or cash flows.

F-9

American Real Estate Assets, Inc.

(A Development Stage Company)

Notes to Financial Statements

January 31, 2009

In April 2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “Determination of the Useful Life of Intangible Assets”. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141R, and other GAAP. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The Company is currently evaluating the impact of SFAS FSP 142-3, but does not expect the adoption of this pronouncement will have a material impact on its financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board’s amendments to AU section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company is currently evaluating the impact of SFAS 162, but does not expect the adoption of this pronouncement will have a material impact on its financial position, results of operations or cash flows.

In October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market For That Asset Is Not Active” (“FSP FAS 157-3”), with an immediate effective date, including prior periods for which financial statements have not been issued. FSP FAS 157-3 amends FAS 157 to clarify the application of fair value in inactive markets and allows for the use of management’s internal assumptions about future cash flows with appropriately risk-adjusted discount rates when relevant observable market data does not exist. The objective of FAS 157 has not changed and continues to be the determination of the price that would be received in an orderly transaction that is not a forced liquidation or distressed sale at the measurement date. The adoption of FSP FAS 157-3 is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Other accounting standards have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date and are not expected to have a material impact on the financial statements upon adoption.

F-10

American Real Estate Assets, Inc.

(A Development Stage Company)

Notes to Financial Statements

January 31, 2009

Note 2 Going Concern

As reflected in the accompanying financial statements, the Company has a net loss and deficit accumulated during the development stage of $76,523 for the period ended January 31, 2009 and net cash of $8,695 used in operating activities and a working capital deficit of $55,673 at January 31, 2009. In addition, the Company is in the development stage and has not yet generated any revenues.

The ability of the Company to continue as a going concern is dependent on Management's plans, which include potential asset acquisitions, mergers or business combinations with other entities, further implementation of its business plan and continuing to raise funds through debt or equity raises.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 Deposit – Related Party

In January 2009, the Company paid $3,150 towards an agreement with Almeda Group, LLC. (“Almeda”), an entity owned by the Company’s founders, for a future acquisition of a controlling interest in Almeda. The deposit is nonrefundable except by default of Almeda.

In February 2009, the Company paid an additional $12,754 towards the total purchase price of $16,000. At closing, the Company will pay an additional $24,000, which will be used towards the payment of debt. The Company expects the purchase to be completed in March 2009.

Note 4 Note Payable and Consulting Agreement

In October 10, 2008, the Company entered into a six-month consulting agreement. This agreement included the issuance of a note for $100,000, which matures on July 1, 2009. The note is secured by all assets of the Company until the Company is approved to trade on the over-the-counter bulletin board. After the Company is approved to trade on the over-the-counter bulletin board, the note is secured by all 60,000,000 shares issued to founders (see Note 7) and held in escrow account. The agreement also includes a provision that the consultants will receive a thirteen percent (13%) equity position at the time the Company is public. The note bears interest at 12% with a default interest rate of 18%. For the period ended January 31, 2009, the Company recorded amortization expense related to the consulting services of $61,828. At January 31, 2009, the remaining $38,172 is reflected as prepaid.

The Company expensed $3,000 of interest for the period ended January 31, 2009. The interest was paid by the Company’s Chief Executive Officer and treated as contributed capital.

At January 31, 2009, this note represents a 100% concentration in debt financing.

F-11

American Real Estate Assets, Inc.

(A Development Stage Company)

Notes to Financial Statements

January 31, 2009

Note 5 Income Taxes

SFAS No. 109 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carryforwards. SFAS No. 109 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

The Company has a net operating loss carryforward for tax purposes totaling $67,523 at January 31, 2009 expiring through 2029. Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally greater than a 50% change in ownership). Temporary differences, which give rise to a net deferred tax asset, are as follows:

Significant deferred tax assets at January 31, 2009 are as follows:

Gross deferred tax assets:
Net operating loss carryforwards	$	(26,897	)
Total deferred tax assets		(26,897	)
Less: valuation allowance		(26,897	)
Net deferred tax asset recorded	$	-

The valuation allowance at October 14, 2008 (inception) was $0. The net change in valuation allowance during the period ended January 31, 2009, was an increase of $26,897. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of January 31, 2009

The actual tax benefit differs from the expected tax benefit for the period ended January 31, 2009. (computed by applying the U.S. Federal Corporate tax rate of 34% to income before taxes and 8.84% for California State income taxes, a blended rate of 39.83%) as follows:

Expected tax expense (benefit) - Federal	$	(23,718	)
Expected tax expense (benefit) - State		(6,765	)
Stock issued for pre-incorporation services - founders		3,586
Change in valuation allowance		26,897
Actual tax expense (benefit)	$	-

F-12

American Real Estate Assets, Inc.

(A Development Stage Company)

Notes to Financial Statements

January 31, 2009

Note 6 Commitments and Contingencies

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results.

Note 7 Stockholders’ Deficit

On October 14, 2008, the Company issued 60,000,000 shares of common stock, having a fair value of $6,000 ($0.0001/share), based upon the fair value of the services provided, for pre-incorporation services. Under SFAS No. 123R and APB No. 29, “Accounting for Nonmonetary Transactions”, fair value of the services provided reflect a more readily determinable fair value of the shares issued. The exchange of these non-monetary assets did not result in a gain or loss. At January 31, 2009, the Company has expensed this stock issuance as a component of general and administrative expense. These shares are held by a third party escrow agent as security on a note payable in the event of default (See Note 4).

In January 2009, the Company issued 92,000 shares of common stock for $23,000 ($0.25/share), under a private placement to third party investors. Of the total, $8,000 was a subscription receivable. The subscription was collected in February 2009.

Note 8 Subsequent Events

In February 2009, the Company issued 30,000 shares of common stock for $7,500 ($0.25/share), under a private placement to third party investors. Of the total, $1,500 was collected in February 2009 and $6,000 was collected in March 2009.

F-13

DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Our directors and officers are indemnified as provided by the Delaware Statutes and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.

MANAGEMENT DISCUSSION AND ANALYSIS

This section of the Registration Statement includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

PLAN OF OPERATION

AREA’s concept is relatively simple: Buy properties that have a value add opportunity, hold for the long term, be proactive, and execute on the upside. AREA’s management created a process for finding, detecting, and creating value for properties that might otherwise be passed over by traditional purchasers.

Value-add properties are not simply properties that are foreclosed or have large amounts of rehabilitation required. Value-add properties are: properties in pre-foreclosure status, properties with tenant leases well below market, properties where the current ownership has internal problems, properties that are poorly managed, and any other property that isn’t fully realizing its potential due to some controllable issue.

AREA will continue to seek value added opportunities as achieved thus far to maximize investors’ returns.

All functions will be coordinated and managed by our founders, including marketing, finance, and operations.

We have budgeted $145,000 over the next year for general expenses. This budget covers marketing expenses ($5,000), legal and consulting fees ($110,000), infrastructure fees ($20,000) and due diligence fees ($10,000).

We expect the first year total cost of marketing and advertising to be $1,000. We anticipate that new projects will offset any additional general and marketing costs.

At the end of the first year we plan to make an assessment on the first year of operations. By that time we anticipate having additional projects for the following year.

If we are unable to effectively fund these projects we may have to suspend or cease our efforts. If we cease our previously stated efforts we do not have plans to pursue other business opportunities. If we cease operations investors will not receive any return on their investments.

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Results of Operations

For the period from inception through January 31, 2009, we had no revenue. Expenses for the period totaled $73,523 resulting in a loss of $73,523. Expenses of $3,000 for the period consisted of interest expense.

Capital Resources and Liquidity

As of January 31, 2009 we had $6,155 in cash.

We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. Completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that additional financing will be available. In the absence of additional financing, we may be unable to proceed with our plan of operations.

We anticipate that our operational, and general and administrative expenses for the next 12 months will total approximately $145,000. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

In October 2008, we entered into a consulting agreement with Going Public, LLC. The consulting agreement includes services to assist us through all stages of achieving a quote on the OTC Bulletin Board including the Private Placement Memorandum preparation, S-1 development, form 211 preparation, and other necessary documents, from the initial assessment and planning through the entire process including general consulting assistance in structuring and developing our company and its business plan for future growth and stability.

Pursuant to the consulting agreement we issued a secured note (“Secured Note”) payable to Going Public, LLC in the amount of $100,000, due on July 17, 2009. The Secured Note bears interest at 12%, is due monthly and is secured by our assets and the control shares of our controlling shareholder(s).

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in or disagreements with accountants on accounting or financial disclosure matters.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Our executive officers and directors and their respective ages as of May 11, 2009 are as follows:

NAME	AGE	POSITION
Dr. David T. Wise	41	Chairman
Dr. Christy Wise	42	CEO/President
Allen R. Blunt	35	Treasurer
J. Denny Rochford	43	Secretary

Set forth below is a brief description of the background and business experience of our executive officers and directors.

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Dr. David T. Wise, Chairman

Dr. Wise has over 17 years of real estate experience. His in-depth knowledge and expertise in asset management, construction, and tenant representation enable his clients to achieve maximum success. After expanding his former employer’s business for 5 straight years, Dr. Wise sought to provide a level of service not yet found in the commercial real estate industry by setting the standard with his own firm.

Since establishing ACRES, Inc., in 2002, Dr. Wise has represented a variety of companies in a broad range of industries, including insurance, engineering, finance, entertainment, technology, life science and telecommunications for location sizes ranging from 1,500 to over 200,000 square feet.

Dr. Wise has also provided asset management for multi-family housing for 6 years. Total asset valuation was in excess of $100 Million at any given time, with no less than 800 residential and commercial units. Furthermore, Dr. Wise oversaw construction, rehabilitation, and refurbishment of over 700 units from 1994 to 1997. His construction management experience from 1997 to 2002 consisted mostly of commercial property exceeding 500,000 useable square feet and $50 Million.

Dr. Wise has authored numerous articles and publications, including work produced for the San Diego Business Journal, Los Angeles Business Journal, and High Tech Magazine.

Dr. Christy Wise, CEO/President

Dr. Wise is a licensed psychologist to practice in the State of California. In addition to her private practice, she currently owns a 72 unit property in Arlington, TX. She has a keen sense of money management, budgeting, and negotiation which has been integral to the start up phase of both Almeda Group, LLC and her private practice.

Dr. Wise earned her doctorate degree in Psychology from The California School of Professional Psychology. She graduated with honors and is a member of PSI CHI (The National Honor Society in Psychology). With years of pre and post doctoral work, she has approximately 7 years of experience working with issues surrounding: divorce, children, teens, adolescents, relationships, conflict resolution, sexuality, anxiety, depression, extensive psychological testing and many other diagnostic categories and issues.

Dr. David Wise and Dr. Christy Wise are a married couple.

Allen R. Blunt, Treasurer, Executive Vice President

Allen Blunt began his real estate career in 1999. His in-depth knowledge and expertise in asset and project management, mortgage finance, and commercial real estate transactions enable his clients to achieve maximized success.

For the past two years, Allen has been practicing commercial real estate in San Diego with A.C.R.E.S., a locally respected firm focusing on tenant representation. He has worked on transactions representing a total combined value of over $100 million. His clients include both San Diego regional firms with local real estate needs and national firms looking to improve their real estate processes and/or the value of their San Diego assets.

As an advisor, Allen has evaluated leasehold interests; site acquisition, restructure and/or relocation alternatives, strategic planning options and negotiating tactics. Allen quickly identifies real estate related challenges and proposes specific strategies for each portfolio, client, and situation that help achieve enhanced results.

Allen’s local experience and close connection with the San Diego market give him firsthand knowledge of landlords, market trends and the best methods of creating competition for his clients' tenancy. Allen is fully dedicated to limiting his clients' exposure to increasing facilities cost and other risks through appropriate transaction and lease structures, and defined processes. Allen successfully combines his business education and brokerage skills to his clients' distinct advantage in every transaction.

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J. Denny Rochford, Secretary, Executive Vice President, Operations

Denny Rochford began his business career right from college after attending Central College University in Washington State. He has developed a keen sense of understanding and developing processes and procedures for the betterment of any organization that has been fortunate enough to garner his skills.

His aptitude for quickly identifying lulls in a sales cycle and procedure has increased the volume of every company he has worked for by 20% or more. These increases have been realized within the first quarter and successive quarters thereafter until maximization was achieved.

Denny began his investment real estate ownership in 2005 and has successfully maintained his investments in the down cycle of today’s economy.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of May 11, 2009 and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner	Percent of Class (1)

Common Stock	David and Christina Wise, Co-Trustees P.O. Box 1042 Rancho Santa Fe, CA 92067	30,000,000	43.38%

Common Stock	J. Denny Rochford 12161 Clubhouse Lane Mukilteo, WA 98275	10,000,000	14.46%

Common Stock	Allen Blunt 12349 Creekview Drive 72 San Diego, CA 92128	20,000,000	28.92%

Common Stock	All executive officers and directors as a group	60,000,000	86.76%

(1)	Based upon 60,092,000 shares outstanding as of May 11, 2009.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have a secured note (“Secured Note”) payable to Going Public, LLC in the amount of $100,000, due on July 17, 2009. The Secured Note bears interest at 12%, interest is due monthly, is secured by the controlling shares held by the Company’s controlling shareholders.

Compensation of Executive Officers

Summary Compensation Table

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the period ended January 31, 2009 in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

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SUMMARY COMPENSATION TABLE

Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Totals ($)

Dr. David Wise Chairman		2008(1)	$	0		0	$	0		0		0		0		0	$	0

Dr. Christy Wise CEO/President		2008(1)	$	0		0	$	0		0		0		0		0	$	0

J. Denny Rochford Secretary		2008(1)	$	0		0	$	0		0		0		0		0	$	0

Allen Blunt Treasurer		2008(1)	$	0		0	$	0		0		0		0		0	$	0

(1) We do not have any plans to pay our officers and directors any compensation at this time and our financial situation would be worse than currently disclosed if we were required to make such payments.

Option Grants Table. There were no individual grants of stock options to purchase our common stock made to the executive officer named in the Summary Compensation Table through January 31, 2009.

Aggregated Option Exercises and Fiscal Year-End Option Value Table. There were no stock options exercised during year ending October 31 by the executive officer(s) named in the Summary Compensation Table.

Long-Term Incentive Plan (“LTIP”) Awards Table. There were no awards made to a named executive officer during the year ended January 31, 2009 under a LTIP.

Compensation of Directors

Directors are permitted to receive fixed fees for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity and at this time we have no plans to pay any fees to our directors.

Employment Agreements

We do not have any employment agreements in place with our officers or directors.

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Item 12A. Disclosure of Commission Position on Indemnification of Securities Act Liabilities.

DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION OF SECURITIES ACT LIABILITIES

Our director and officer is indemnified as provided by the Delaware Statutes and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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AMERICAN REAL ESTATE ASSETS, INC.

165,800 SHARES OF COMMON STOCK

PROSPECTUS

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

Until _____________, all dealers that effect transactions in these securities whether or not participating in this offering may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

The Date of This Prospectus Is: May, 2009

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PART II -- INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 13. Other Expenses Of Issuance And Distribution.

Securities and Exchange Commission registration fee	$	46.48
Federal Taxes	$	0
State Taxes and Fees	$	0
Transfer Agent Fees	$	2,500
Accounting fees and expenses	$	7,500
Legal fees and expense	$	10,000
Blue Sky fees and expenses	$	1,150
Miscellaneous	$	0
Total	$	21,196.48

All amounts are estimates other than the Commission’s registration fee. We are paying all expenses of the offering listed above. No portion of these expenses will be borne by the selling shareholders. The selling shareholders, however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or costs of sale.

Item 14. Indemnification Of Directors And Officers.

Our directors and officers are indemnified as provided by the Delaware Statutes and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our directors, officers or controlling persons in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Item 15. Recent Sales Of Unregistered Securities.

We were incorporated in the State of Delaware on October 10, 2008 and on October 14, 2008 30,000,000 common shares were issued to David and Christina Wise as Co-Trustees of the Wise Family Trust, 10,000,000 common shares were issued to J. Denny Rochford and 20,000,000 common shares were issued to Allen Blunt for pre incorporation services. These shares were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the “Act”). These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, the shareholder had the necessary investment intent as required by Section 4(2) since he/she/they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.

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In March 2009, we completed a Regulation D Rule 506 offering in which we sold 165,800 shares of common stock to 31 investors, at a price per share of $0.25 per share for an aggregate offering price of $41,450. The following sets forth the identity of the class of persons to whom we sold these shares, the date of each sale and the amount of shares for each shareholder:

Al-Dahhan, Abdul-majid	3/06/2009	5,000
Balderas, Maria	3/25/2009	1,000
Barnes, Brenda	3/12/2009	400
Beatrice L. Snider Rev Trust	3/18/2009	1,000
Rincon Investment Trust	4/02/2009	800
Blunt, Carlton	3/19/2009	400
Blunt, James	3/19/2009	400
Blunt, Roland	3/19/2009	400
Bodam, Gary L.	2/24/2009	20,000
Brewer, Chad	3/12/2009	4,000
Cantrell, Jeri	3/25/2009	1,000
Cohen, Joseph	1/29/2009	20,000
Dutra, Jimi and Tamara	1/21/2009	10,000
Flores, Melissa	3/31/2009	400
Fortner, Chris W.	3/26/2009	400
Friedman, Linda	3/25/2009	400
Lamy, Christen	2/13/2009	1,000
Moore, Terence	3/31/2009	1,000
Moran, Michelle Marie	2/13/2009	1,000
Murray, Ronald James	3/26/2009	400
Ray, Sam	2/17/2009	2,000
Robinson, Robin L.	2/02/2009	4,000
Russell, Michelle L.	3/26/2009	400
Santos, Nina	3/31/2009	400
Szakacs, Robin	1/19/2009	60,000
Unified Equities LLC	01/30/2009	2,000

Vega, Alona Lyn	3/13/2009	2,000
Vogt, Erik	3/30/2009	2,000
Wise, Ronald Lee	3/04/2009	2,000
Zika, George A. IV	2/01/2009	2,000
Primiani, Marc S.	4/02/2009	20,000

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The Common Stock issued in our Regulation D, Rule 506 Offering was issued in a transaction not involving a public offering in reliance upon an exemption from registration provided by Rule 506 of Regulation D of the Securities Act of 1933. In accordance with Section 230.506 (b)(1) of the Securities Act of 1933, these shares qualified for exemption under the Rule 506 exemption for this offerings since it met the following requirements set forth in Reg. §230.506:

(A)	No general solicitation or advertising was conducted by us in connection with the offering of any of the Shares.

(B)	At the time of the offering we were not: (1) subject to the reporting requirements of Section 13 or 15 (d) of the Exchange Act; or (2) an “investment company” within the meaning of the federal securities laws.

(C)	Neither we, nor any of our predecessors, nor any of our directors, nor any beneficial owner of 10% or more of any class of our equity securities, nor any promoter currently connected with us in any capacity has been convicted within the past ten years of any felony in connection with the purchase or sale of any security.

(D)	The offers and sales of securities by us pursuant to the offerings were not attempts to evade any registration or resale requirements of the securities laws of the United States or any of its states.

(E)	None of the investors are affiliated with any of our directors, officers or promoters or any beneficial owner of 10% or more of our securities.

Please note that pursuant to Rule 506, all shares purchased in the Regulation D Rule 506 offering completed in November 2008 were restricted in accordance with Rule 144 of the Securities Act of 1933. In addition, each of these shareholders were either accredited as defined in Rule 501 (a) of Regulation D promulgated under the Securities Act or sophisticated as defined in Rule 506(b)(2)(ii) of Regulation D promulgated under the Securities Act.

We have never utilized an underwriter for an offering of our securities. Other than the securities mentioned above, we have not issued or sold any securities.

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Item 16. Exhibits and Financial Statement Schedules.

EXHIBIT NUMBER	DESCRIPTION
3.1	Articles of Incorporation
3.2	By-Laws
5.1	Opinion of Anslow & Jaclin, LLP
15.1	Consulting Agreement
23.1	Berman & Company, P.A.
23.2	Consent of Counsel, as in Exhibit 5.1
24.1	Power of Attorney

Item 17. Undertakings.

(A) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

i. To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

ii. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(5) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

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(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

i. Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

ii. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

iii. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

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SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and authorized this registration statement to be signed on its behalf by the undersigned, in San Diego, California on May 11, 2009.

AMERICAN REAL ESTATE ASSETS, INC.
By:	/s/ Dr. David Wise
	Dr. David Wise
	Chairman of the Board of Directors

	/s/ Dr. Christy Wise
	Dr. Christy Wise
	Chief Executive Officer,
	President

	/s/ J. Denny Rochford
	J. Denny Rochford
	Secretary

	/s/ Allen Blunt
	Allen Blunt
	Treasurer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Dr. David Wise and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including his capacity as a director and/or officer of American Real Estate Assets, Inc.) to sign any or all amendments (including post-effective amendments) to this registration statement and any and all additional registration statements pursuant to rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the SEC, granting unto each said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement was signed below by the following persons in the capacities and on May 11, 2009.


By:	/s/ Dr. David Wise
	Dr. David Wise
	Chairman of the Board of Directors

	/s/ Dr. Christy Wise
	Dr. Christy Wise
	Chief Executive Officer,
	President

	/s/ J. Denny Rochford
	J. Denny Rochford
	Secretary

	/s/ Allen Blunt
	Allen Blunt
	Treasurer

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American Real Estate Assets Inactive S-1IPO registration