SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549  FORM 10-KSB   (Mark One)  SANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended December 31, 2007  £TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from ______________ to________________ Commission file number:   000-52746  LIBERTY ALLIANCE, INC. (Name of small business issuer in its charter)  Delaware87-0438200(State or other jurisdiction of
incorporation or organization)(I.R.S. Employer
Identification No.)899 South Artistic Circle, Springville, Utah84663(Address of principal executive offices)(Zip Code)   Issuers telephone number (801) 489-4802  Securities registered under Section 12(b) of the Exchange Act: None   Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.001 par value   Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  £  Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.  SEC 2337 (12-05) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.   Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  S   No £  Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  S  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  S   No £  State issuers revenues for its most recent fiscal year.     $ -0-  State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.)  The aggregate market value of the issuers common stock held by non-affiliates at March 1, 2008 is deemed to be $0.  Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated.  (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)  Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes £   No £  (APPLICABLE ONLY TO CORPORATE REGISTRANTS)  State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date.  As of March 1, 2008, there were 22,413,675 shares of common stock issued and outstanding.  DOCUMENTS INCORPORATED BY REFERENCE  If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (Securities Act). The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990).  Transitional Small Business Disclosure Format (Check one): Yes £  No S  2    LIBERTY ALLIANCE, INC.  INDEX PagePART IItem 1.  Description of Business

Item 2.  Description of Property

Item 3.  Legal Proceedings

Item 4.  Submission of Matters to a Vote of Security Holders4

6

6

6PART IIItem 5.  Market for Common Equity and Related Stockholder Matters

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

Item 7.  Financial Statements

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

Item 8A. Controls and Procedures

Item 8B. Other Information6

7

7


7

8

8PART IIIItem 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

Item 10.  Executive Compensation

Item 11.  Security Ownership of Certain Beneficial Owners and Management

Item 12.  Certain Relationships and Related Transactions

Item 13.  Exhibits and Reports on Form 8-K

Item 14.  Principal Accountant Fees and Services8

10

10

10

11

11Signatures12  (Inapplicable items have been omitted)  3    PART I  Forward-Looking Statement Notice  When used in this report, the words may, will, expect, anticipate, continue, estimate, project, intend, and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Companys future plans of operations, business strategy, operating results, and financial position.  Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors.  Item 1.  Description of Business.  The Company was organized under the laws of the State of Utah on September 30, 1986 as G & G Management, Inc.  On December 8, 1986 the Company changed its name to Utah Innovation Associates, Inc.  The Company was formed to act as a small business innovation center to assist in the creation and development of companies involved in high-technology and bio-technology research and development.  In June 1989, the Company changed its name to Champion Concepts, Inc.  At that time the Company began phasing out its plans of acting as a business incubator and expanded its search of potential acquisition candidates. On November 26, 1991 the Company merged with Liberty Alliance, Inc., a Delaware corporation.  From 1991 to 1994 the Company engaged in selling memberships in a consumer discount program that negotiated discounts for its members.  The business plan failed and in September 1994 management filed for Chapter 7 protection in the United States Bankruptcy Court.  The Company remained dormant until 2006 when it began preparations to become a public shell and seek new business opportunities.  The Company plans to acquire, or merge with a targeted operating business that is seeking public company status.  In August 2006 the Company changed its name to Vestige, Inc., and in September 2006 the Company changed its name back to Liberty Alliance, Inc.  We have now focused our efforts on seeking a business opportunity.  The Company will attempt to locate and negotiate with a business entity for the merger of that target company into the Company. In certain instances, a target company may wish to become a subsidiary of the Company or may wish to contribute assets to the Company rather than merge. No assurances can be given that the Company will be successful in locating or negotiating with any target company. The Company will provide a method for a foreign or domestic private company to become a reporting (public) company whose securities are qualified for trading in the United States secondary market.  Sources of Opportunities  We anticipate that business opportunities may arise from various sources, including officers and directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.  We will seek potential business opportunities from all known sources, but will rely principally on the personal contacts of our officers and directors as well as indirect associations between them and other business and professional people.  Although we do not anticipate engaging professional firms specializing in business acquisitions or reorganizations, we may retain such firms if management deems it in our best interests.  In some instances, we may publish notices or advertisements seeking a potential business opportunity in financial or trade publications.   4    Criteria  We will not restrict our search to any particular business, industry or geographical location.  We may acquire a business opportunity in any stage of development.  This includes opportunities involving start up or new companies.  In seeking a business venture, management will base their decisions on the business objective of seeking long-term capital appreciation in the real value of our company.  We will not be controlled by an attempt to take advantage of an anticipated or perceived appeal of a specific industry, management group, or product.  In analyzing prospective business opportunities, management will consider the following factors:  · available technical, financial and managerial resources; · working capital and other financial requirements; · the history of operations, if any; · prospects for the future; · the nature of present and expected competition; · the quality and experience of management services which may be available and the depth of the management; · the potential for further research, development or exploration; · the potential for growth and expansion; · the potential for profit; · the perceived public recognition or acceptance of products, services, trade or service marks, name identification; and other relevant factors.  Generally, our management will analyze all available factors and make a determination based upon a composite of available facts, without relying on any single factor.  Methods of Participation of Acquisition  Management will review specific businesses and then select the most suitable opportunities based on legal structure or method of participation.  Such structures and methods may include, but are not limited to, leases, purchase and sale agreements, licenses, joint ventures, other contractual arrangements, and may involve reorganization, merger or consolidation transactions.  Management may act directly or indirectly through an interest in a partnership, corporation, or other form of organization.  Procedures  As part of the our investigation of business opportunities, officers and directors may meet personally with management and key personnel of the firm sponsoring the business opportunity.  We may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and conduct other reasonable measures.  We will generally ask to be provided with written materials regarding the business opportunity.  These materials may include the following:  · descriptions of products, services and company history; · management resumes; · financial information; · available projections with related assumptions upon which they are based; · an explanation of proprietary products and services; · evidence of existing patents, trademarks or service marks or rights thereto; · present and proposed forms of compensation to management; · a description of transactions between the prospective entity and its affiliates; · relevant analysis of risks and competitive conditions; · a financial plan of operation and estimated capital requirements; · and other information deemed relevant.  5    Competition  We expect to encounter substantial competition in our efforts to acquire a business opportunity.  The primary competition is from other companies organized and funded for similar purposes, small venture capital partnerships and corporations, small business investment companies and wealthy individuals.  Employees  We do not currently have any employees but rely upon the efforts of our sole officer and director to conduct our business.  We do not have any employment or compensation agreements in place with our sole officer and director although he is reimbursed for expenditures advanced on our behalf.  Item 2.  Description of Property  We do not currently own any property.  Mr. White, our president, allows us to use his office in Springville, Utah on a rent-free basis.    We will not seek independent office space until we pursue a viable business opportunity and recognize income.  Item 3.  Legal Proceedings  No legal proceedings are threatened or pending against Liberty Alliance, Inc., or any of our officers or directors.  Further, none of our officers, directors or affiliates are parties against Liberty Alliance, Inc., or have any material interests in actions that are adverse our own.  Item 4.  Submission of Matters to a Vote of Securities Holders  No matters were submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders.  PART II  Item 5. Market for Common Equity and Related Stockholder Matters  At March 1, 2008, the number of record holders of our Common Stock was approximately 339. Total shares issued and outstanding were 22,413,675.  Our common stock is listed on the Over the Counter Bulletin Board ("OTCBB"), under the symbol "LBTI".  CLOSING BIDCLOSING ASK2007HighLowHighLowNov. 14 Thru Dec. 31NONENONENONENONE[First available]  The above quotations, as provided by Pink Sheets, LLC, represent prices between dealers and do not include retail markup, markdown or commission.  In addition, these quotations do not represent actual transactions.  We have not paid, nor declared, any dividends since our inception and do not intend to declare any such dividends in the foreseeable future. Our ability to pay dividends is subject to limitations imposed by Delaware law. Under Delaware law, dividends may be paid to the extent that a corporations assets exceed its liabilities and it is able to pay its debts as they become due in the usual course of business.   6    Item 6. Managements Discussion and Analysis or Plan of Operation  Years Ended December 31, 2007 and 2006  We have at December 31, 2007 $33 available cash on hand and have a cumulative loss since re-entering the development stage on April 19, 2006 of $44,601.  We did not generate any revenues during the years ended December 31, 2007 and 2006 and have had no operations.  Net loss during the year ended December 31, 2007 was $23,864 compared to $21,696 in 2006.  Expenses for both years consisted of general and administrative expenses of $20,071 and $17,451 for 2007 and 2006, respectively, and interest expense of $3,793 and $4,245 for 2007 and 2006, respectively.   The general and administrative expenses were primarily due to professional, legal, and accounting fees associated with our public filings.  In June of 2006 we issued 20,000,000 shares of common stock to the president of the company for $20,000 in cash.  In February 2007, we issued 1,000,000 shares of common stock to interested parties for $5,000 in cash. In addition, we borrowed $5,000 from two interested parties and issued two convertible promissory notes.  Liquidity and Capital Resources  At December 31, 2007, we had $33 in available cash on hand and $70,549 in current liabilities including $9,882 in accounts payable, $12,747 in accrued interest, and $47,920 in a note payable.  We also have $5,357 in convertible notes payable and accrued interest due in February 2009.  We anticipate our expenses for the next twelve months will be approximately $20,000.  At the present time Management anticipates that we may have to rely on advances from our president, or shareholders, to meet our liabilities.  However, there can be no assurances to that effect.  Our need for capital may change dramatically if we acquire an interest in a business opportunity during that period.  At present, we have no understandings, commitments or agreements with respect to the acquisition of any business venture, and there can be no assurance that we will identify a business venture suitable for acquisition in the future.  Further, we cannot assure that we will be successful in consummating any acquisition on favorable terms or that we will be able to profitably manage any business venture we acquire.  Should we require additional capital, we may seek additional advances from officers, sell common stock or find other forms of debt financing.  Our current operating plan is to continue searching for potential businesses, products, technologies and companies for acquisition and to handle the administrative and reporting requirements of a public company.  To demonstrate our commitment to maintaining ethical reporting and business practices, we adopted a Code of Ethics and Business Conduct.  Item 7.  Financial Statements  Our financial statements appear at the end of this report beginning on page

F-1.  Item 8.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure  None.  7    Item 8A(T). Controls and Procedures  (a) Evaluation of Disclosure Controls and Procedures.  The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management conducted an evaluation of the effectiveness of the Companys internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management has concluded that the Companys internal control over financial reporting was not effective as of December 31, 2007.  This annual report does not include an attestation report of the companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the companys registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only managements report in this annual report.  (b) Changes in Internal Control over Financial Reporting.  There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer, that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.  Item 8B. Other Information  There are no further disclosures.  PART III  Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.  The following table sets forth the name, age, position and office term of each executive officer and director of the Company.  NameAgePositionsSinceSteven L. White53Director, President, Secretary/TreasurerAugust 2006  All directors serve until the next annual stockholders meeting or until their successors are duly elected and qualified.  All officers serve at the discretion of the Board of Directors.  Set forth below is certain biographical information regarding each of the Company's executive officers and directors:  Steven L. White, Sole Officer and Director:Mr. White earned his Bachelor of Science Degree from Brigham Young University in 1980 with a major in Accounting and a minor in English.  He is a member of the American Institute of Certified Public Accountants and has been employed by one national and two local CPA firms.  Since 1983, Mr. White has been employed in private accounting and has been the controller of several small businesses. He has been the owner and President and director of Sparrow, Inc., a small consulting business from 2000 to present; the President and director of eNutrition, Inc., from 2000 to 2003, a publicly traded company which sold nutritional products; the President and director of Excel Publishing, Inc., a publicly traded small publishing company from the fall of 2002 to the spring of 2003; the President and director of New Horizon Education, Inc., a publicly traded educational software company from 1998 to 2003; and the controller and chief financial officer of Phoenix Ink, LLC, a financial newsletter publisher, from 1999 to 2001.  Mr. White is currently serving as a Director of Acheron, Inc. and the Director and Sole Officer of Liberty Alliance, Inc., both are public companies.  8    To the knowledge of management, during the past five years, no present or former directors, executive officer or person nominated to become a director or an executive officer of the Company:  (1) has had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; except that on November 17, 2006 Mr. Steven L. White, our president, on behalf of and as president of Liquitek Enterprises, Inc., a Nevada corporation, filed in United States Bankruptcy Court District of Nevada, a petition of bankruptcy under Chapter 11, which on August 24, 2007, was subsequently dismissed. Mr. White became the president of Liquitek Enterprises, Inc. on September 15, 2006.  Liquitek Enterprises, Inc. is not an affiliate of Liberty Alliance, Inc., and Mr. White is no longer an officer or director of Liquitek Enterprises, Inc.  (2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations or other minor offenses);  (3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities:  (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliate person, director or employee of any investment company, or engaging in or continuing any conduct or practice in connection with such activity;  (ii) engaging in any type of business practice; or  (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;  (4) was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity.  (5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated.  (6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal Commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.  Compliance with Section 16 Section 16(a) of the Securities Exchange Act of 1934 requires officers and directors of the Company and persons who own more than ten percent of a registered class of its equity securities to file reports of ownership and changes in their ownership on Forms 3, 4, and 5 with the Securities and Exchange Commission, and forward copies of such filings to the Company. Based on the copies of filings received by the Company during the most recent fiscal year the directors, officers, and beneficial owners of more than ten percent of the equity securities of the Company registered pursuant to Section 12 of the Exchange Act have filed on a timely basis all required Forms 3, 4, and 5 and any amendments thereto.  9    Item 10. Executive Compensation  We

 are not accruing any compensation pursuant to any agreement with our company.  Our officer and director

is

reimbursed for expenses incurred on our behalf.  Our officer and director will not receive any finders fee as a result of his efforts to implement the business plan outlined herein.  However, our officer and director

anticipates

receiving benefits as a beneficial shareholder of our common stock.  We have not adopted any retirement, pension, profit sharing, stock option or insurance programs or other similar programs for the benefit of our employees.  During 2006, three directors each received $100 for their services to the Company.  Employment Contracts and Termination of Employment and Change in Control Arrangement  There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in Executive Compensation set out above which would in any way result in payments to any such person because of his resignation, retirement, or other termination of such persons employment with the Company or its subsidiaries, or any change in control of the Company, or a change in the persons responsibilities following a change of control of the Company.  Item 11.  Security Ownership of Certain Beneficial Owners and Management  The following table sets forth as of December 31, 2007, the name and the number of shares of the Registrants Common Stock, par value, $0.001 per share, held of record or beneficially by each person who held of record, or was known by the Registrant to own beneficially, more than 5% of the 22,413,675 issued and outstanding shares of the Registrants Common Stock, and the name and shareholdings of each director and of all officers and directors as a group.  Title ofName and Address ofAmount and Nature ofPercentage of ClassClassBeneficial OwnerBeneficial OwnershipCommonSteven L. White (1)20,000,00089.23%Total Officers and DirectorsAs a Group (1 Person)20,000,00089.23%  (1) Officer and/or director.  There are no contracts or other arrangements that could result in a change of control of the Company.  The Securities and Exchange Commission takes the position that any securities issued by a blank check company cannot be resold under Rule 144 but must be registered under the Securities Act of 1933.  Therefore, shares held by individuals in the capacity of management, affiliates, control persons and promoters must register such shares with the Commission before resale.  As of the date of this report, the shares held by Mr. Steven L. White must be registered before being resold.  Item 12.  Certain Relationships and Related Transactions  Steven L. White, our president, allows us to use his office in Springville, Utah on a rent-free basis.  In January 2008, Steven L. White, or an entity owned by him, advanced the Company $6,000.  10    Item 13.  Exhibits  Exhibit No.SEC Ref. No.Title of DocumentLocation3.01Articles of Incorporation*3.02Amendment to Articles of Incorporation*3.03Amendment to Articles of Incorporation*3.04Amendment to Articles of Incorporation*3.05Amendment to Articles of Incorporation*3.06Articles of Merger*3.07Amendment to Articles of Incorporation*3.08Amendment to Articles of Incorporation*131.1Certification pursuant to  Rule 13a-14(a) orRule 15d-14(a) of the Securities Exchange Act of 1934,as amendedAttached232.1Certification of the Principal Executive Officerpursuant to U.S.C. Section 1350 as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002**Attached  * Incorporated by reference to the Form 10-SB filed with the Securities and Exchange Commission on August 1, 2007.  Reports on Form 8-K: No reports on Form 8-K were filed by Liberty Alliance, Inc., during the last quarter of the period covered by this report.  Item 14. Principal Accountant Fees and Services  Audit Fee  The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of Liberty Alliance, Inc., annual financial statement and review of financial statements included in Liberty Alliance, Inc., 10-QSB reports and services normally provided by the accountant in connection with statutory and regulatory filings or engagements were $7,487 for fiscal year ended 2007 and $6,093 for fiscal year ended 2006.  Audit-Related Fees  There were no fees for other audit related services for fiscal year ended 2007 and 2006.  Tax Fees  There were no fees for tax compliance, tax advice and tax planning for the fiscal years 2007 and 2006.  All Other Fees  There were no other aggregate fees billed in either of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above. We do not have an audit committee currently serving and as a result our board of directors performs the duties of an audit committee.  Our board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services.  We do not rely on pre-approval policies and procedures.  11     SIGNATURES  In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  Liberty Alliance, Inc.Date: March 15, 2008/s/ Steven L. WhiteSteven L. WhiteChief Executive Officer andChief Financial Officer   In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.   Date:  March 15, 2008/s/ Steven L. WhiteSteven L. WhiteDirector  12      LIBERTY ALLIANCE, INC. [A Development Stage Company]  FINANCIAL STATEMENTS  DECEMBER 31, 2007                 LIBERTY ALLIANCE, INC. [A Development Stage Company]     CONTENTS  PAGEReport of Independent Registered Public Accounting FirmF-3Balance Sheet, December 31, 2007F-4Statements of Operations, for the yearsended December 31, 2007 and 2006and from re-entering the Development Stageon April 19, 2006 through December 31, 2007F-5Statement of Stockholders Equity (Deficit),from December 31, 2005 throughDecember 31, 2007F-6Statements of Cash Flows, for the yearsended December 31, 2007 and 2006and from re-entering the Development Stageon April 19, 2006 through December 31, 2007F-7Notes to Financial StatementsF-8     F-2     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Board of Directors and Stockholders of Liberty Alliance, Inc.  I have audited the accompanying balance sheet of Liberty Alliance, Inc. (a development stage company) (LAI) as of December 31, 2007, and the related statements of operations, stockholders equity, and cash flows for the years ended December 31, 2007 and 2006 and for the period from re-entering development stage on April 19, 2006 through December 31, 2007.  LAIs management is responsible for these financial statements.  My responsibility is to express an opinion on these financial statements based on my audits.  I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that I 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 was I engaged to perform, an audit of its internal control over financial reporting.  My 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, I express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audits provide a reasonable basis for my opinion.  In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of LAI as of December 31, 2007, and the results of its operations and its cash flows for the years ended December 31, 2007 and 2006 and for the period from re-entering development stage on April 19, 2006 through December 31, 2007 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 working capital deficit of $70,516 as of December 31, 2007, has incurred net losses of $23,864 and $21,696 during the years ended December 31, 2007 and 2006, respectively, has negative cash flows from operating activities, and has no revenue-generating activities, which raise substantial doubt about its ability to continue as a going concern.  Managements plans regarding those matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.  /s/ Michael J. Larsen, PC Michael J. Larsen, PC Salt Lake City, Utah March 14, 2008   F-3    LIBERTY ALLIANCE, INC. [A Development Stage Company]  BALANCE SHEET   ASSETSDecember 31,2007CURRENT ASSETS:Cash$33Total Current Assets33Total Assets$33LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT LIABILITIES:Accounts payable$9,882Accrued interest12,747Note payable47,920Total Current Liabilities70,549CONVERTIBLE NOTES AND ACCRUED INTEREST5,357Total Liabilities75,906STOCKHOLDERS' EQUITY (DEFICIT):Preferred stock, $0.001 par value,5,000,000 shares authorized,no shares issued and outstanding-Common stock, $0.001 par value,100,000,000 shares authorized,22,413,675 shares issued andoutstanding22,414Capital in excess of par value1,303,526Retained earnings (deficit)(1,357,212)Deficit accumulated during thedevelopment stage(44,601)Total Stockholders' Equity (Deficit)(75,873)Total Liabilities and Stockholders Equity (Deficit)$33  The accompanying notes are an integral part of these financial statements.  F-4     LIBERTY ALLIANCE, INC. [A Development Stage Company]  STATEMENTS OF OPERATIONS   For the
year ended
December 31,From re-entering the
Development Stage on
April 19, 2006 through
December 31,
200720072006REVENUE$-$-$-OPERATING EXPENSES:Professional fees19,08213,32532,407Other general and administrative9894,1265,115Total operating expenses20,07117,45137,522LOSS BEFORE OTHER INCOME(EXPENSE)(20,071)(17,451)(37,522)OTHER INCOME (EXPENSE):Interest expense(3,793)(4,245)(7,079)LOSS BEFORE INCOME TAXES(23,864)(21,696)(44,601)CURRENT INCOME TAX EXPENSE---DEFERRED INCOME TAX EXPENSE---NET LOSS$(23,864)$(21,696)$(44,601)BASIC AND DILUTED LOSS PERCOMMON SHARE$(0.00)$(0.00)WEIGHTED AVERAGE22,312,3059,358,880OUTSTANDING SHARES  The accompanying notes are an integral part of these financial statements.  F-5     LIBERTY ALLIANCE, INC. [A Development Stage Company]  STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)  FROM DECEMBER 31, 2005 THROUGH DECEMBER 31, 2007  DeficitAccumulatedCommon StockCapital inRetainedDuring theExcess ofEarningsDevelopmentSharesAmountPar Value(Deficit)StageBALANCE,December 31, 20051,413,675$1,414$1,299,526$(1,356,253)$-Net loss for the period endedApril 19, 2006---(959)-BALANCE,April 19, 20061,413,6751,4141,299,526(1,357,212)-Issuance of 20,000,000 sharescommon stock for cash,  June2006 at $0.001 per share20,000,00020,000---Net loss for the period endedDecember 31, 2006----(20,737)BALANCE,December 31, 200621,413,67521,4141,299,526(1,357,212)(20,737)Issuance of 1,000,000 sharescommon stock for cash,February 2007 at $0.005
per share1,000,0001,0004,000--Net loss for the year endedDecember 31, 2007----(23,864)BALANCE,December 31, 200622,413,675$22,414$1,303,526$(1,357,212)$(44,601)  The accompanying notes are an integral part of these financial statements  F-6     LIBERTY ALLIANCE, INC. [A Development Stage Company]  STATEMENTS OF CASH FLOWS   For theFrom re-entering theYear EndedDevelopment Stage onDecember 31,April 19, 2006 ThroughDecember 31,200720062007Cash Flows From Operating Activities:Net loss$(23,864)$(21,696)$(44,601)Adjustments to reconcile net loss to net cashused by operating activities:Changes in assets and liabilities:(Increase) decrease in prepaid expenses600(600)-Increase (decrease) in accounts payable9,389(827)8,548Increase in accrued interest3,7913,2406,086Net Cash Provided (Used) byOperating Activities(10,084)(19,883)(29,967)Cash Flows From Investing Activities---Net Cash Provided (Used)
by Investing Activities---Cash Flows From Financing Activities:Proceeds from related party loans-2,5002,500Cash used to repay related party loans-(2,500)(2,500)Proceeds from loans-5,0005,000Cash used to repay loans-(5,000)(5,000)Proceeds from convertible notes payable5,0005,00010,000Cash used to repay convertible notes payable-(5,000)(5,000)Proceeds from common stock issuance5,00020,00025,000Net Cash Provided (Used)by Financing Activities10,00020,00030,000Net Increase (Decrease) in Cash(84)11733Cash at Beginning of Period117--Cash at End of Period$33$117$33Supplemental Disclosures of Cash Flow Information:Cash paid during the period for:Interest$2$1,089$1,091Income taxes$-$-$-Supplemental Schedule of Noncash Investing and Financing Activities:For the year ended December 31, 2007:NoneFor the year ended December 31, 2006:None  The accompanying notes are an integral part of these financial statements.  F-7     LIBERTY ALLIANCE, INC. [A Development Stage Company]  NOTES TO FINANCIAL STATEMENTS  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Organization Liberty Alliance, Inc. (the Company) is a Delaware corporation.  From 1991 to 1994 the Company engaged in selling memberships in a consumer discount program that negotiated discounts for its members.  The business plan failed and in September 1994 management filed for Chapter 7 protection in the United States Bankruptcy Court. The Company has remained dormant until April 19, 2006 when it began preparations to become a public shell and seek new business opportunities.  The Company plans to acquire, or merge with a targeted operating business that is seeking public company status.  On August 10, 2006 the Company changed its name to Vestige, Inc., and restated its Articles of Incorporation to increase the authorized common shares to 100,000,000.  On September 10, 2006 the Company changed its name back to Liberty Alliance, Inc.  The Company, at the present time, has not commenced operations and is defined by the SEC as a shell company.  A shell company, (other than an asset-backed issuer), is a company with no or nominal operations and either 1) no or nominal assets, or 2) assets consisting solely of cash and cash equivalents, or 3) assets consisting of any amount of cash and cash equivalents and nominal other assets.  Since re-entering the development stage, the Company has not generated any revenues from its planned principal operations and is considered a Development Stage Company as defined in Statement of Financial Accounting Standards No. 7.  The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.  Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.  Fair Value of Financial Instruments - The carrying values of the note payable and convertible notes payable approximate fair value based on discounting the projected cash flows using market rates available for similar maturities.  No financial instruments are held for trading purposes.  Accounting 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, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimated by management.  F-8    LIBERTY ALLIANCE, INC. [A Development Stage Company]  NOTES TO FINANCIAL STATEMENTS  NOTE 2 - GOING CONCERN  The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern.  However, the Company has a working capital deficit of $70,516 as of December 31, 2007, has incurred net losses of $23,864 and $21,696 during the years ended December 31, 2007 and 2006, respectively, has negative cash flows from operating activities, and has no revenue-generating activities.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of its common stock.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.  NOTE 3 - RELATED PARTY TRANSACTIONS  Advances from a Stockholder  In May 2006, an officer/stockholder of the Company advanced $2,500 to the Company which was repaid in June 2006.  At December 31, 2007, the Company owed $0 to the officer/stockholder.  Common Stock - In June 2006, the Company issued 20,000,000 shares of its previously authorized but unissued common stock to the president of the Company for $20,000 cash (or $0.001 per share).  Management Compensation  During the years ended December 31, 2007 and 2006, the Company did not pay any compensation to its officers, as the services provided by them were nominal.  During the years ended December 31, 2007 and 2006, the Company paid directors fees totaling $0 and $300, respectively.  Office Space - The Company has not had a need to rent office space.  An officer/stockholder of the Company is allowing the Company to use his office as a mailing address, as needed, at no cost to the Company.  NOTE 4  NOTES PAYABLE  In December 2003, the Company renegotiated an existing debt of $47,920 into a note payable agreement.  The note accrues interest at 6% per annum compounded annually and is due on demand.  Interest expense on the note totaled $3,434 and $3,240 for the years ended December 31, 2007 and 2006, respectively.  Convertible Notes Payable - In June 2006, the Company issued two $2,500 convertible notes payable.  Each note accrued interest at 8% per annum, was due on demand, and was convertible with accrued interest into 500,000 shares of common stock after the Company is no longer classified as a shell company.  In September 2006, the Company paid off the notes along with accrued interest of $350.  In February 2007, the Company issued two $2,500 convertible notes payable.  Each note accrues interest at 8% per annum, is due on demand, and is convertible with accrued interest into 500,000 shares of common stock after the Company is no longer classified as a shell company.  Interest expense on the two notes totaled $357 and $0 for the years ended December 31, 2007 and 2006, respectively.  F-9     LIBERTY ALLIANCE, INC. [A Development Stage Company]  NOTES TO FINANCIAL STATEMENTS  NOTE 5 - CAPITAL STOCK  Preferred Stock - The Company has authorized 5,000,000 shares of preferred stock, $0.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors.  No shares are issued and outstanding at December 31, 2007.  Common Stock -The Company has authorized 100,000,000 shares of common stock with a $0.001 par value.  The total issued and outstanding common shares is 22,413,675 at December 31, 2007.  In February 2007, the Company issued 1,000,000 shares of its previously authorized but unissued common stock for cash.  Proceeds from the sale of stock totaled $5,000 (or $0.005 per share).  In June 2006, the Company issued 1,000,000 shares of its previously authorized but unissued common stock for $5,000 cash (or $0.005 per share).  However, in September 2006, the Company repurchased the 1,000,000 shares for $5,625 in cash (or $0.005625 per share).  Since these transactions together have characteristics consistent with interest-bearing loans rather than equity transactions, the Company has accounted for these transactions based upon their substance as interest-bearing loans.  NOTE 6 - INCOME TAXES  The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes.  SFAS No. 109 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available net operating loss or tax credit carryforwards.  The Company has available at December 31, 2007, a net operating loss carryforward of approximately $29,900 which may be applied against future taxable income and which expires in 2026 and 2027.  The amount of and ultimate realization of the benefits from the net operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined.  Because of the uncertainty surrounding the realization of the net operating loss carryforwards, the Company has established a valuation allowance equal to the tax effect of the net operating loss carryforwards and, therefore, no deferred tax asset has been recognized for the net operating loss carryforwards.  The net deferred tax asset is approximately $9,600 and $4,300 as of December 31, 2007 and 2006, respectively, with an offsetting valuation allowance of the same amount.  The change in the valuation allowance for the year ended December 31, 2007 is approximately $5,300.  NOTE 7  SUBSEQUENT EVENTS  In January 2007, a stockholder of the Company advanced the Company $6,000.  The advance bears no interest and is due on demand.  F-10