U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549  FORM 10-KSB (Mark One)  [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended October 31, 2007   [ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the
transition period from ________ to __________  Commission File Number000-27011   Alpine Air Express, Inc. (Name of small business issuer in its
charter)  Delaware
33-0619518(State or Other Jurisdiction of
(I.R.S. Employer Identification
No.)incorporation or organization)  1177 Alpine Air Way, Provo, Utah
                          84601 (Address of principal executive offices)
                   (Zip
Code)  Issuer's telephone number: (801)
373-1508  Securities registered under Section 12(b) of the Exchange
Act:  Title of each class
                Name
of each exchange on which registered  None
                                            N/A  Securities registered under Section 12(g) of the Exchange
Act:  Common
Stock (Title
of class)  Check whether the issuer is
not required to file reports pursuant to Section 13 or 15(d) of the Exchange
Act. [  ]  Check whether
the issuer (1) 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.  (1)  Yes [X]  No [ ]  (2)
 Yes [X]  No  [ ]  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not 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. [ ]    Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).  Yes    No X  State
issuer's revenues for its most recent fiscal year: $18,380,301  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: $3,366,980 as of January 21, 2008.   (ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)  Not
applicable.  (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 January 21, 2008, the Registrant
had 36,271,461 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 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:  None.  Transitional
Small Business Disclosure Format (check one):  Yes [ ]  No [X]  PART I  ITEM 1. DESCRIPTION OF BUSINESS  Background.  Alpine Air
Express, Inc., a Delaware corporation ("Alpine Air"), is engaged in the air
cargo business through its wholly owned subsidiary, Alpine Aviation, Inc., a
Utah corporation ("Alpine Aviation").  Alpine Aviation was organized on
October 7, 1975, in the state of Utah.  Alpine Aviation has been operated
by the same management since 1986.  Alpine Aviation is an air cargo
operator, transporting mail packages and other time-sensitive cargo to more than
20 cities in the western portion of the mainland United States and in the
Hawaiian Islands. Alpine Aviation began its operations in the 1970's with the
intent of being a regional charter and cargo carrier.  After present
management acquired control in 1986, Alpine Aviation began to focus less on the
charter or passenger services and more on the cargo aspects of the airline
industry.  Since the 1990's, Alpine Aviation has focused on hauling mail
for the United States Postal Service and carrying packages for United Parcel
Service because of their favorable contracts, routes and payment practices.
 As a result of this focus, approximately 84% of Alpine Aviation's revenues
now come directly from these two customers.  Alpine Air
Express was formed in April, 1994, under the name "Riverside Ventures, Inc."
 Prior to its acquisition of Alpine Aviation in June, 2000, Alpine Air
Express had no business operations and was actively looking for a business with
which to merge or acquire in an effort to create an operation that would provide
value to our shareholders.  On June 12,
2000, Alpine Air Express, under its former name, entered into an agreement and
plan of reorganization with Alpine Aviation, pursuant to which Alpine Air
acquired all of the outstanding shares of Alpine Aviation.  Pursuant to the
terms of the reorganization, Alpine Air Express issued 9,895,000 shares of its
common stock to the stockholders of Alpine Aviation in exchange for all of the
issued and outstanding shares of   Alpine Aviation.
 As a result of the reorganization, Alpine Aviation became a wholly owned
subsidiary of Alpine Air Express.  As a further result of the
reorganization, the management of Alpine Aviation assumed control over Riverside
Ventures and changed the company's name from "Riverside Ventures, Inc." to the
current name of "Alpine Air Express, Inc."  The reorganization has been
treated as a "reverse merger," with Alpine Aviation as the surviving entity for
accounting purposes and Alpine Air the surviving entity for corporate purposes.
At the time of the reorganization, Alpine Air Express had 1,000,000 shares of
common stock outstanding.  Following the reorganization, Alpine Air had
10,895,000 shares outstanding, which was composed of the 1,000,000 shares
outstanding prior to the issuance of shares for Alpine Aviation and the
9,895,000 newly issued shares to the Alpine Aviation stockholders.  Alpine
Air subsequently issued an additional 105,000 shares, bringing the total
outstanding shares to 11,000,000 as of 2003. During 2004 and 2005 the Company
issued 122,000 shares, bringing the total outstanding shares to 11,122,000 at
2005.  In 2006, we effected a 3 for 1 stock split and issued additional
shares for compensation during 2006 resulting in a total of 36,271,461
outstanding shares at both October 31, 2006 and 2007.  Routes and Delivery.  Alpine
Aviation currently has 12 air cargo routes covering 16 cities in four western
states in the mainland U.S. and 2 routes covering several of the Hawaiian
Islands. Alpine also provides contract cargo charter flights for other carriers
and for the public.  Most routes are flown every day and some multiple
times per day.  In fiscal 2007, Alpine Aviation transported 10,877 tons of
cargo.  The largest component of Alpine Aviation's cargo mix is U.S. mail,
which accounted for approximately 77% of our fiscal 2007 revenue  The USPS
delivers and picks up all cargo we carry at the aircraft, unless other
arrangements are called for separately by the contract.  When the USPS
delivers and picks up the mail at the side of our aircraft, we are able to
reduce our costs significantly.  Alpine
currently operates 26 aircraft on two national certificates (one is inactive).
 The largest aircraft in our fleet is a Beechcraft 1900, which holds
approximately 6,000 pounds of cargo.  Our other aircraft type is the
Beechcraft 99, which holds approximately 3,400 pounds of cargo.  Industry overview.  The package
delivery and air cargo business has evolved rapidly over the last two decades,
driven by the integration of world markets, the rationalization of corporate
supply chains and the implementation of enterprise software and internet-based
information technology solutions. The ability to provide time-definite delivery
options and transfer information increasingly determines success.  Customer
demands for real-time information processing and worldwide distribution and
logistics capabilities favor companies with integrated services.  Customers
increasingly focus on the timing and predictability of deliveries rather than
the mode of transportation. As customers re-engineer the total distribution
process, which includes order processing, administration, warehousing,
transportation and inventory management, they attempt to reduce the most
expensive and fastest growing component, inventory carrying costs. Time-definite
transportation, which is no longer limited to air express, has become a critical
part of just-in-time inventory management and improving overall distribution
efficiency.  Technology
advances have made it easier for companies to analyze and compare distribution
options.  As a result of these changes, individual shipments are generally
smaller but more frequent and a greater proportion of products are being
delivered directly to end-users, particularly as e-commerce takes hold.
 Customers expect high performance levels and broad product offerings as
they seek to optimize supply chain solutions.  There has been
dramatic growth in the utilization of e-commerce by both consumers and
businesses for the transfer of goods.  Consumers who use the internet for
home shopping and other services shop across borders and require global delivery
capabilities.  Delivery of
packages to a specific destination at a guaranteed time has been the growth
engine for the package delivery industry over the past decade. The industry has
become increasingly dominated by large integrated carriers such as UPS and FedEx
that provide seamless services, including pick-up and delivery, shipment via air
and/or road transport and customs clearance. The pace of consolidation in the
package delivery industry has increased on a global scale.    Industry
participants are acquiring, merging with or forming alliances with partners that
can expand global reach, breadth of services or technological capabilities in
order to better enable those participants to compete in a rapidly changing
global environment.  In particular, government-run post offices have made
several recent alliances with and acquisitions of private-sector companies.
 Post offices, which still maintain numerous advantages over private-sector
companies, create significant challenges for competitors worldwide.  With the
growth in cargo and e-commerce taking a greater hold, we feel the need for
companies like Alpine Air will only continue to expand.  We offer the
ability to deliver mail and cargo to smaller markets without many of the
associated capital costs.  Employees.  The Company
has 118 employees, 57 of which are full time, including 10 in administration and
46 in flight operations, which includes 32 pilots.  No employees belong to
any labor union or have employment contracts.  ITEM 2. DESCRIPTION OF
PROPERTIES  Alpine Air is
headquartered in its owned facility located in Provo, Utah.  This facility
is on leased property at the Provo Municipal Airport. Our hangar consists of
approximately 25,000 square feet with attached corporate offices.  The
hangar and offices have been valued at a cost of approximately $1,200,000.  The company
also leases a 10,403 square foot hangar in Billings, Montana at the Logan
International Airport and has permits to lease and use hangar and office space
with the State of Hawaii, Department of Transportation for our air cargo
operations serving the Hawaiian Islands.  We carry
extensive insurance coverage on all facilities as well as aircraft.
 Management believes our insurance coverage is adequate to cover any damage
to our facilities or aircraft and any resulting liabilities.  ITEM 3. LEGAL PROCEEDINGS  Alpine Air
has been named in a lawsuit by a former employee for claims of approximately
$50,000 related to wrongful termination. The plaintiff is not actively pursuing
prosecution and we believe the case may be dismissed for lack of prosecution.  ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITIES HOLDERS  No matters
were submitted to a vote of stockholders of Alpine Air during the fourth quarter
of the fiscal year ended October 31, 2007.    PART
II  ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS  Alpine Air's
common stock is currently quoted on the National Association of Securities
Dealers Electronic Bulletin Board under the symbol "APNX" (a change in the
previous "ALPE" symbol took place during the current fiscal year). Set forth
below are the high and low closing bid prices for our common stock for each
quarter.  These bid prices were obtained from Yahoo Finance (available on
the internet ). All prices listed herein reflect inter- dealer prices, without
retail mark-up, mark-down or commissions and may not represent actual
transactions. These prices retroactively reflect the three-for-one split of our
issued and outstanding stock in January, 2006.  Quarter
Ended
High
Bid
Low
BidOctober 31, 2005
$0.17
$0.17January 31, 2006
$0.36
$0.36April 30, 2006
$0.50
$.45July 31, 2006
$0.40
$0.40October 31, 2006
$0.44
$0.44January 31, 2007
$0.35
$0.35April 30, 2007
$0.35
$0.35July 31, 2007
$0.35
$0.35October 31, 2007
$0.42
$0.42   We cannot
guarantee that the present market for our common stock will continue or be
maintained, and the resale of "unregistered" and "restricted" shares pursuant to
Rule 144 of the Securities and Exchange Commission may substantially reduce the
market price of our common stock.  Holders.  As of January
19, 2008, there were 36,271,461 post split shares of common stock outstanding
held by approximately 466 active holders of record, including broker-dealers and
clearing corporations holding shares on behalf of their customers, as reported
by the Company's transfer agent.  This figure does not include an
indeterminate number of stockholders who may hold their shares in street name.  Dividends.  Since its
inception, Alpine Air has paid no dividends on its common stock, and we do not
anticipate that we will pay any dividends in the foreseeable future.  Recent Sales of Unregistered
Securities.  Except as
indicated below, Alpine Air has not sold any equity securities during the period
covered by this Annual Report that were not registered under the Securities Act
of 1933, as amended.    ITEM 6.
 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION  General.  Alpine
Aviation Inc. provides air cargo transportation services in the United States in
Hawaii, Montana, North Dakota, South Dakota, and Washington.  While the
USPS is our primary customer, we also provide contract cargo and charter
services for other package delivery and cargo carriers. We continue to offer
package delivery services for local businesses between the islands in Hawaii. In
addition to air cargo transportation, the Company provides maintenance service
on aircraft owned or operated by third parties, and operates a First Officer
Training Program.  Revenues were
over $18 million in 2007, a nearly 9% decrease from the $20 million in 2006.
 The primary decrease in revenues came from contract changes in the Hawaii
USPS contract, under which Alpines total number of flights were significantly
reduced. However, while reducing the total number of flights, the new contract
provided a significant increase in the revenue per pound flown. This new
agreement commenced in January 2006 and expires in June 2008. If the Company
were unable to renew this contract in June 2008, it would have a significant
impact on earnings and revenues. However, management has had substantial success
in renewing contracts with the USPS over the past 30 years.  In 2007, the
Company carried over 10,877 tons of cargo as compared to 14,451 tons in 2006.
This reduction is directly attributable to the January 2006 changes in the
Company's Hawaii USPS contract and the resulting decrease in routes flown.
However, while cargo weights were down 25%, the Company's revenue per pound was
also significantly higher.  The Company
continues to experience rising costs in fuel, insurance, contract labor costs
and professional services fees. While public fuel prices increased nearly 50%
during the current fiscal year, management was able to secure favorable fuel
contracts which held the Companys costs at a significantly lower increase.
 These costs along with the need to continue maintenance and repair of our
aircraft place a strong demand on our cash resources.  Due to the
improved overall financial position of the Company, we are now seeking
aggressive growth through expansion in current and new markets and through
acquisitions.  Liquidity and Capital Resources.  October 31, 2007 and 2006.  The Company
has a working capital position on October 31, 2007 of $2,350,821, as compared to
working capital on October 31, 2006, of $707,754. The increase in working
capital has been the direct result of significant reductions in operating
expenses, negotiated increases in contract revenues, and re-allocation of
aircraft resources. The management team continues to make strong efforts to
maximize its cash resources to support all operations and has seen considerable
improvement in the past 12 months.  The Company's
increase in working capital was a result of multiple factors, including
increases in cash balances of $602,793 and in accounts receivable of $199,250,
and a decrease in accounts payable of $861,391. A decrease of $134,790 was also
noted in the current portion of the notes payable accounts. The Company
presently has no material off-balance sheet financing arrangements.  Total assets
increased to $23,623,577 on October 31, 2007 from $22,836,992 on October 31,
2006. Total liabilities also decreased from $11,300,308 to $9,109,622 during the
same period. Our stockholders' equity has also increased from $3,958,941 to
$14,513,955 for October 31, 2006 and October 31, 2007, respectively. This
increase is substantially due to a new issue of Preferred Stock and from
continued increases in retained earnings.  For the year
ended October 31, 2007 there was a net profit from operations before income
taxes and preferred stock dividends of $3,918,184. This is a significant
increase from the previous years net income of $2,768,595. Depreciation was
$1,886,493 for a decrease of $64,417 over last year. This decrease is due to
reduction in the aircraft engine flight times from those of the previous year,
upon which a substantial amount of depreciation is based.    During the year
ended October 31, 2007, the company has continued to reduce the tax NOL
carryforward created in prior years and accordingly, there was a decrease in the
deferred tax benefits of $761,636.  Investing
activities for the year ended October 31, 2007, included receiving $556,900 in
net cash receipts primarily from the proceeds of the sale of property and
equipment. Additional equipment purchases during the current year totaled
$2,867,852.  For the year
ended October 31, 2007, net cash used in financing activities was $1,666,001,
which includes new funds made available of $6,000,000 and subsequent use
primarily from payments of $4,119,168 towards notes payable and $2,194,443 from
payments to related party notes payable. For the year ended October 31, 2006,
financing activities used net cash of $1,689,506, with $1,417,879 paid on notes
payable and $369,627 towards notes payable related parties. All Alpine aircraft
are currently pledged as collateral on the line of credit, Notes Payable and
Preferred Stock of the Company.  For the years
ended October 31, 2007 and 2006, net increases (uses) in cash and cash
equivalents were $602,793 and $18,329, and ending cash and cash equivalents was
$1,108,829 and $506,036, respectively.  Results of Operation.  During the
year ended October 31, 2007 total operating revenues were $18,380,301,
representing a 9% decrease from the 2006 revenues of $20,156,657.  This
decrease is a continuation of the modifications made to the Hawaii USPS contract
which reduced overall aircraft flights, but continuing flights are being made
under the new contract pricing which represents an increase in revenue per pound
flown, resulting in greater profitability. Total direct costs continued to
decrease to $12,468,243 from $15,768,378 for the years 2007 and 2006,
respectively. This 21% reduction in total direct costs was driven by a
combination of actions including the reduced number of flights made under the
current Hawaii contract, a more effective deployment of Company assets, and
successful cost management initiatives implemented by management.  Alpine's
revenue from Public Services which include its First Officer Training Program
and maintenance provided to outside entities increased slightly in 2007 to
$249,240 from $201,438 in 2006. As a direct result, expenses for Public Services
also increased to $162,101 from $70,301 in 2006.  Operating
expenses increased to $1,415,100 from $954,779 for the years ended October 31,
2007 and 2006 respectively.  During the year ended October 31, 2007 and
2006, gain on disposal of assets was $397,918 and $596,432 and respectively.  During the
year ended October 31, 2007, Other Income (expense) was $578,774 compared to the
previous year total of $664,905. The decrease was the direct result of
additional interest paid to the Company from its cash investments.  Total income
tax expense for the year ended October 31, 2007 and 2006 was $761,636 and
$1,057,380, respectively.  For the year
ended October 31, 2007 and 2006, income before preferred dividends of subsidiary
was $3,156,548 and $1,711,215, or $0.09 per share and $0.05 per share and,
respectively. For the same periods net income available to shareholders was
$1,846,548 and $401,215, and $0.05 per share and $0.01 per share, respectively.
The difference for both years presented is approximately $1,310,000 and $0.04
per share, which is related to dividends declared on preferred stock and the
amortization of a preferred stock discount analogous to a preferred stock
dividend.  Critical Accounting Policies and
Estimates.  The
preparation of the Company's financial statements in conformity with accounting
principles generally accepted in the U.S. requires the use of estimates and
assumptions to determine certain assets, liabilities, revenues and expenses.
Management bases these estimates and assumptions upon the best information
available at the time of the estimates or assumptions. The Company's estimates
and assumptions could change materially as conditions   within and
beyond our control change. Accordingly, actual results could differ materially
from estimates. The most significant estimates made by management include
allowance for doubtful accounts receivable, reserves for excess and obsolete
inventories, deferred tax asset valuation, revenue recognition and valuation of
long-lived assets.  Following is
a discussion of critical accounting policies and related management estimates
and assumptions.  Allowance for
Doubtful Accounts. An allowance for doubtful accounts receivable in the amount
of $19,390 and $30,324, respectively, as of October 31, 2007 and 2006, and was
established based on management's estimates of the collectability of accounts
receivable. The required allowance is determined using information such as
customer credit history, industry information, credit reports, customer
financial condition and the collectability of outstanding accounts receivables
associated with a discontinued business segment. The estimates can be affected
by changes in the financial strength of the aviation industry, customer credit
issues or general economic conditions.  Inventories.
The Company's parts inventories are valued at the lower of cost or market.
Reserves for excess and obsolete inventories in the amount of $47,489 and
$44,849, respectively, as of October 31, 2007 and 2006, are based on assessment
of the marketability of slow-moving and obsolete inventories. Estimates are
subject to volatility and can be affected by reduced equipment utilization,
existing supplies of used inventory available for sale, the retirement of
aircraft or ground equipment and changes in the financial strength of the
aviation industry.  Deferred
Taxes. Net deferred tax assets are shown net of valuation allowance in the
amount of $966,861 and $1,728,497, as of October 31, 2007 and 2006,
respectively, to reflect the likelihood of the recoverability of these assets.
Company judgment of the recoverability of these assets is based primarily on
estimates of current and expected future earnings and tax planning. The balance
of net deferred tax assets will continue to decrease as the Company continues to
perform well.  Revenue
Recognition. Cargo revenue is recognized upon completion of contract terms and
maintenance revenue is recognized when the service has been performed. These
contracts vary in length but average three years, with some having options for
an additional year(s).  Valuation of
Long-Lived Assets. The Company assesses long-lived assets used in operations for
impairment when events and circumstances indicate the assets may be impaired and
the undiscounted cash flows estimated to be generated by those assets are less
than their carrying amount. In the event it is determined that the carrying
values of long-lived assets are in excess of the fair value of those assets, the
Company then will write-down the value of the assets to fair value.  Safe Harbor Statement.  Statements
made in this Form 10-KSB which are not purely historical are forward-looking
statements with respect to the goals, plan objectives, intentions, expectations,
financial condition, results of operations, future performance and business of
the Company, including, without limitation, (i) our ability to retain existing
commercial relationships and to obtain additional profitable sources of revenue,
and (ii) statements preceded by, followed by or that include the words "may",
"would", "could", "should", "expects", "projects", "anticipates", "believes",
"estimates", "plans", "intends", "targets" or similar expressions.  Forward-looking statements involve
inherent risks and uncertainties, and important factors (many of which are
beyond the Company's control) that could cause actual results to differ
materially from those set forth in the forward- looking statements, including
the following, in addition to those contained in the Company's reports on file
with the SEC: general economic or industry conditions, nationally and/or in the
communities in which the Company conducts business, legislation or regulatory
requirements, the economic condition of the U.S. Postal Service or United Parcel
Service, changes in the air cargo, charter and leasing industries, demand for
air cargo, charter and leasing services, competition, changes in the quality or
composition of the Company's services, our ability to develop profitable new
sources of revenue, changes in accounting principals, policies or guidelines,
financial or political instability, acts of war or terrorism, other economic,
competitive, governmental, regulatory and technical factors affecting the
Company's operations, services and prices.    Accordingly, results actually
achieved may differ materially from expected results in these statements.
 Forward-looking statements speak only as of the date they are made.
 The Company does not undertake, and specifically disclaims, any obligation
to update any forward-looking statements to reflect events or circumstances
occurring after the date of such statements.  ITEM 7.  FINANCIAL STATEMENTS                            ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED FINANCIAL STATEMENTS  October 31, 2007                                            ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED FINANCIAL STATEMENTS    CONTENTS   PAGEReport of Independent Registered Public Accounting
Firm
2Consolidated Balance Sheet at October 31,
2007
3 - 4Consolidated Statements of Operations for years
ended October 31, 2007 and 2006
5 - 6Consolidated Statement of Stockholders'
Equity
7 - 8Consolidated Statements of Cash Flows, for the
years ended October 31, 2007 and 2006
9 - 10Notes to Consolidated Financial Statements
11 - 24      REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Board of
Directors ALPINE AIR
EXPRESS, INC. AND SUBSIDIARY Provo. Utah  We have
audited the accompanying balance sheet of Alpine Air Express, Inc. and
Subsidiary as of October 31, 2007 and the related statements of operations,
stockholders' equity and cash flows for the years ended October 31, 2007 and
2006.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.  We conducted our audits 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 audits provide 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 Alpine Air Express, Inc. and
Subsidiary as of October 31, 2007 and the results of its operations and its cash
flows for the years ended October 31, 2007 and 2006, in conformity with
accounting principles generally accepted in the United States of America.    /s/Pritchett, Siler
& Hardy, P.C.  PRITCHETT, SILER
& HARDY, P.C.  Salt Lake City,
Utah January 29, 2008  2     ALPINE AIR EXPRESS, INC. AND
SUBSIDIARY  CONSOLIDATED BALANCE SHEET  ASSETS  October 31, 2007CURRENT ASSETS:Cash and cash equivalents
$
1,108,829Trade accounts receivable,
net

2,008,708Inventories

1,384,340Prepaid expenses

587,434Deposits

10,130Deferred tax asset,
current

116,497Total Current
Assets

5,215,938PROPERTY AND EQUIPMENT,net

17,302,275OTHER ASSETS

255,000DEFERRED TAX ASSETS,long-term

850,364$
23,623,577                          [Continued]  3    ALPINE AIR
EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED BALANCE SHEET  [Continued]  LIABILITIES AND
STOCKHOLDERS' EQUITY October 31, 2007CURRENT LIABILITIES:Trade accounts payable
$
900,582Accrued liabilities

584,508Deferred Revenue

16,992Dividends Payable

98,627Current portion of notes
payable

1,264,408Total Current
Liabilities

2,865,117DEFERRED GAIN ON SALE OF ASSETS

270,725NOTES PAYABLE,net of current portion

5,973,780Total
Liabilities

9,109,622STOCKHOLDERS' EQUITY:Preferred stock, $.001 par value,
$9.104 stated value, 1,000,000 shares authorized,
1,000,000
shares issued and outstanding, net of discount of $808,019

8,295,981Common stock, $.001 par value,
100,000,000 shares authorized, 36,271,461 shares issued and
outstanding

36,271Additional paid-in capital

2,350,103Retained earnings

3,831,600Total Stockholders
Equity

14,513,955Total Liabilities and Stockholders Equity
$
23,623,577                  The accompanying notes are an integral part
of this consolidated financial statement.  4    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED
STATEMENTS OF OPERATIONS For the years ended
October
31,2007

2006  (restated)OPERATING REVENUE:Operations

$
18,131,061

$
19,955,219Public
services


249,240


201,438Total
Operating Revenues


18,380,301


20,156,657DIRECT COSTS:Operations


12,306,142


15,698,077Public
services


162,101


70,301Total
Direct Costs


12,468,243


15,768,378Gross
Profit


5,912,058


4,388,279OPERATING
EXPENSES:General and
administrative
(Gain) loss on
disposal of assets


1,813,018
(397,918)


1,551,211
(596,432)Total
Operating Expenses


1,415,100


954,779Operating income (loss)


4,496,958


3,433,500OTHER INCOME
(EXPENSE):Interest
income


44,082


9,664Interest
expense


(622,856)


(674,569)Total
Other Income (Expense)


(578,774)


(664,905)INCOME (LOSS) BEFORE TAXES
AND PREFERRED STOCK DIVIDEND


3,918,184


2,768,595Current
income tax expense (benefit)


-


-Deferred
income tax expense (benefit)


761,636


1,057,380INCOME (LOSS) BEFORE
PREFERRED STOCK DIVIDEND

$
3,156,548

$
1,711,215                        (continued)  5    ALPINE
AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED STATEMENTS OF OPERATIONS  [Continued]  For the Years
Ended
October
31,2007

2006  (restated)Preferred Stock dividend
declared andAmortization of
preferred stock discount analogous to a preferred stock dividend of a
Subsidiary

(655,000)


(1,310,000)NET INCOME (LOSS)
$
2,501,548

$
401,215Preferred Stock dividend
declared and
Amortization of preferred stock
discount analogous to a preferred stock dividend

(655,000)


-NET INCOME (LOSS) AVAILABLE
TO COMMON SHAREHOLDERS
$
1,846,548

$
401,215NET INCOME (LOSS) PER COMMON
SHAREBasic
$
.05

$
0.01Diluted
$
.03

$
N/A                             The accompanying notes
are an integral part of these consolidated financial statements.    6    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY  FOR THE YEARS ENDED OCTOBER 31, 2007 AND
2006  Preferred Stock
In Parent

Preferred
Stock

Common StockShares

Amount

Discount

Shares

AmountBALANCE, October 31, 2005 after restatement
-


-


-


33,366,000


33,366Net income for the year ended October 31,
2006
-


-


-


-


-Shares issued in November as part of employee
compensation package
-


-


-


60,000


60Shares issued in December as part of A consulting
contract
-


-


-


2,845,461


2,845Amortization of stock subscriptions
-


-


-


-


-BALANCE, October 31, 2006
-


-


-


36,271,461


36,271Issuance of Preferred Stock in Parent
1,000,000


9,104,000


(1,167,139)


-


-Net income for the year ended October 31,
2007
-


-


-


-


-Dividends declared and amortization of preferred
stock discount analogous to a preferred stock dividend
-


-


359,120


-


-Stock subscription Receivable
-


-


-


-


-Debt forgiveness on early N/P redemption
-


-


-


-


-BALANCE, October 31, 2007
1,000,000

$
9,104,000

$
(808,019)


36,271,461

$
36,271  The accompanying notes are an integral part
of these consolidated financial statements  7    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY  FOR THE YEARS ENDED OCTOBER 31, 2007 AND
2006   Additional Paid-in Capital


Stock Subscription Receivable


Retained
Earnings


Accumulated TotalBALANCE, October 31, 2005 after restatement

1,668,689


-


1,583,837


3,285,892Net income for the year ended October 31,
2006

-


-


401,215


401,215Shares issued in November as part of employee
compensation package

10,940


-


-


11,000Shares issued in December as part of a consulting
contract

518,823


(521,668)


-


-Amortization of stock subscription

-


260,834


-


260,834BALANCE, October 31, 2006

2,198,452


(260,834)


1,985,052


3,958,941Issuance of Preferred Stock in Parent

-


-


-


7,936,861Net income for the year ended October 31,
2007

-


-


2,501,548


2,501,548Dividends declared and amortization of preferred
stock discount analogous to a preferred stock dividend

-


-


(655,000)


(295,880)Stock subscription receivable

-


260,834


-


260,834Debt forgiveness on early N/P redemption

151,651


-


-


151,651BALANCE, October 31, 2007
$
2,350,103

$
-

$
3,831,600

$
14,513,955  The accompanying notes are an integral part
of these consolidated financial statements   8     ALPINE AIR EXPRESS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS  For the Year Ended
October 31,2007

2006
(restated)Cash flows from operating
activities:Net income (loss)
$
2,501,548

$
401,215Adjustments to reconcile net
income (loss) to net cash provided by (used in) operating
activities:Realized gain
on sale of fixed assets

(397,918)


(590,851)Deferred tax
expense (benefit)

761,636


1,057,380Depreciation
and amortization

1,886,493


1,942,854Change in
allowance for bad debt

5,720


-Non-Cash
Items

260,834


271,834Preferred
Stock Dividends and related amortization

655,000


1,310,000Changes in
operating assets and liabilities:Trade
accounts receivable

(199,250)


727,141Inventories

32,731


(608,118)Income
taxes receivable

-


103,297Deposit

5,760


39,110Prepaid
expenses

31,987


45,459Trade
accounts payable

(861,391)


(1,583,328)Accrued
expenses
Accrued
interest on loan to officer and related party

54,333
-


(112,196)
(175,185)Deferred
gain amortization
Refundable
Deposits

(174,729)
-


(174,729)
(95,700)Deferred
Revenue

16,992


-Total
adjustments

2,078,198


2,156,968Net
cash provided by (used in) operating activities

4,579,746


2,558,183Cash flows from investing
activities:Proceeds from sale of property
and equipment

556,900


686,150Purchase of property and
equipment

(2,867,852)


(1,449,652)Other assets

-


(86,846)Net
cash provided by (used in) investing activities

(2,310,952)


(850,348)Cash flows from financing
activities:Payment on notes payable
Payment on dividends
payable

(4,119,168)
(2,194,443)


(1,417,879)
-Payment on notes payable -
related party

(1,254,390)


(369,627)Line of Credit Increase

(98,000)


98,000Proceeds from Notes
payable

6,000,000


-Net
cash provided by (used in) financing activities

(1,666,001)


(1,689,506)Net change in cash and cash
equivalents

602,793


18,329Beginning cash and cash
equivalents

506,036


487,707Ending cash and cash
equivalents
$
1,108,829

$
506,036 [Continued]  9    ALPINE
AIR EXPRESS, INC. AND SUBSIDIARY CONSOLIDATED
STATEMENTS OF CASH FLOWS [Continued] For the Year Ended
October 31,2007

2006
          (restated)Supplemental disclosures of
cash flow information:Cash paid during the period
for:Interest
$
703,317

$
638,408Income
taxes
$
-

$
-  Non-cash investing and financing activities:   For the year ended October 31, 2007:  In April 2007, the
Company issued 1,000,000 shares of new Preferred Stock with a value of $9.104
per share (see Note 11). This new issuance was exchanged share for share for the
outstanding Preferred Shares issued from the companys subsidiary, Alpine
Aviation, Inc. This transaction had no effect on the Companys cash.  In July 2007 the
Company restructured most of its outstanding debt and paid all outstanding
Related Party Notes Payable. As part of the restructuring, the related party
involved agreed to discount the balances due by $151,651. This amount was
properly recorded as forgiveness of debt and booked as increase to Paid In
Capital.  The Company had
preferred dividend expense from a subsidiary of $655,000 which is comprised of
$295,880 in dividends and $359,120 of amortized discount on preferred stock
analogous to a preferred stock dividend. The Company also had preferred dividend
expense of $655,000 which is comprised of $295,880 in dividends payable and
$359,120 of amortized discount on preferred stock analogous to a preferred stock
dividend.  Stock subscription
balance was reduced to $0 from $260,834. These were related to a services
contract which was in its second and final year and has been amortized over the
past two years.  For the year ended October 31, 2006:  The Company had
preferred dividend expense of $1,310,000 which is comprised of $591,760 in
dividends payable and $718,240 of amortized discount on preferred stock
analogous to a preferred stock dividend.  In November 2005 the
Company issued 60,000 shares of common stock as part of an employment
      agreement. The stock was valued at $11,000
or approximately $0.1834 per share.  In December 2005 the
Company issued 2,845,467 shares of common stock for services to be rendered over
a 2-year period. The stock was valued at $521,668 or approximately $0.1834 per
share. The Company has received services to date valued at $521,668.  In August 2006, the Company
refinanced certain outstanding Related Party Notes Payable in a non-cash
          transaction.  The accompanying notes are an integral part
of these consolidated financial statements.  10    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  This summary of significant accounting
policies of Alpine Air Express, Inc. and subsidiaries (the "Company") is
presented to assist in understanding the Company's financial statements. These
accounting policies conform to accounting principles generally accepted in the
United States of America (USGAAP) and have been consistently applied in the
preparation of the consolidated financial statements.  Organization and business
description - Alpine Aviation, Inc. (Alpine) was incorporated in the state
of Utah on October 7, 1975.  On June 12, 2000 Alpine entered into a
transaction that was accounted for as a reverse merger with Riverside Ventures,
Inc., a Delaware corporation incorporated on April 20,1994. At the time of the
transaction, Riverside Ventures, Inc. was inactive. All of the outstanding
common stock of Alpine was exchanged for 29,685,000 shares of common stock of
Riverside Ventures, Inc.  The transaction, accounted for as a reverse
acquisition, resulted in a recapitalization of Alpine, inasmuch as it was deemed
to be the acquiring entity for accounting purposes. Riverside Ventures, Inc.
changed its name to Alpine Air Express, Inc.  The Company is an air cargo
operator, transporting mail, packages and other time-sensitive cargo between
cities in the western portion of the United States.  Principles of consolidation  The
condensed consolidated financial statements include the accounts and operations
of Alpine Air Express, Inc., and its wholly-owned subsidiary Alpine Aviation,
Inc. as of October 31, 2007 and 2006 (together referred to as the Company). All
material inter-company transactions and accounts have been eliminated in the
consolidation.  Cash and cash equivalents - The
Company considers demand deposits at banks and money market funds at other
financial institutions with an original maturity of three months or less to be
cash equivalents.  At October 31, 2007, the Company had cash balances in
excess of federally insured limits in the amount of $898,325. . Other assets -At October 31, 2007,
the Company had three restricted cash time deposits totaling $255,000 held as
collateral for debt of a third party and is included in other assets. (See Note
5)  Trade accounts
receivable - The Company grants credit to its customers, substantially all
of whom are businesses located in the United States. The Company does not
require collateral on any of its trade accounts receivable.  Inventories -
Inventories consist of aircraft parts and fuel stated at the lower of cost or
market, determined using the first-in, first-out method (FIFO).  Property and
equipment - Provision for depreciation for financial reporting purposes of
property and equipment is computed on the straight-line method over their
estimated useful lives ranging from three to forty years. (See Note 5)
Maintenance, repairs, and renewals, which neither materially add to the value of
the property and equipment nor appreciably prolong the useful lives are charged
to expense as incurred.  Gains and losses on dispositions are included in
operations.  Engine overhauls - The Company had
previously used the direct expense method to account for engine overhauls and
has elected to make a change in accounting method during the year ended October
31, 2006. The Company has elected to make a "Change in Accounting Method" in
order to use the deferral method of accounting for our major engine and airframe
component overhauls and which provides for major engine and airframe component
overhaul costs to be capitalized and depreciated over the estimated useful life
of the engine and airframe components. This method will provide a more
consistent approach to accounting for major engine and airframe component
overhauls.  Certain
reclassifications - Certain reclassifications have been made to the 2006
financial statements to conform to the 2007 presentation.  11    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[CONTINUED]  Impairment of
long-term assets - The Company reviews all long-term assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
such assets may not be recoverable through undiscounted future cash flows. If an
impairment loss has occurred, such loss is recognized in the determination of
net income.  Income taxes -
The Company utilizes the liability method of accounting for income taxes.
 Under the liability method, deferred tax assets and liabilities are
determined based on the difference between financial accounting and tax bases of
assets and liabilities using enacted tax rates in effect during the years in
which the differences are expected to reverse.  An allowance against
deferred tax assets is recorded in whole or in part when it is more likely than
not that such tax benefits will not be realized. (See note 13)  Use of estimates
- In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenue and expenses during the reporting
period.  Actual results could differ from those estimates.  Fair value of
financial instruments - Cash and cash equivalents, marketable securities,
accounts receivable, and accrued liabilities are reflected in the financial
statements at fair value because of the short-term maturity of these
instruments.  Management is not able to practicably estimate the fair value
of the notes receivable from related parties due to the related party nature of
the underlying transactions.  Income (Loss) per
common share - The Company follows the provisions of Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" (SFAS No. 128).  SFAS No.
128 requires the presentation of basic and diluted earning per share.
 Basic earnings per share are calculated by dividing income (loss)
available to common shareholders by the weighted-average number of common shares
outstanding during each period. Diluted earnings per share are similarly
calculated, except that the weighted-average number of common shares outstanding
includes common shares that may be issued subject to existing rights with
dilutive potential.  Potential common shares having an anti-dilutive effect
on periods presented are not included in the computation of dilutive earning per
share. (See note 12)  Revenue and cost
recognition - The Company utilizes the accrual method of accounting whereby
revenue is recognized when earned. Air freight revenue is recognized upon
delivery of cargo to its destination.  Public services revenue consists of
charter income, pilot training fees, and customer maintenance services.
 Charter income and customer maintenance services income is recognized when
the service is performed.  Pilot training revenue is recognized over the
course of the program, based on the pro rata share of the course completed to
date.  The tuition revenue received, but not yet earned, is deferred and
recorded as "refundable deposits" on the balance sheet.  Recently Enacted Accounting Standards -Statement of Financial Accounting Standards (SFAS) No. 155, Accounting
for Certain Hybrid Financial Instruments  an amendment of FASB Statements No.
133 and 140, SFAS No. 156 "Accounting for the Servicing of Financial Assets",
SFAS No. 157, "Fair Value Measurements", SFAS No. 158, "Employers" Accounting
for Defined Benefit Pension and Other Postretirement Plans- an amendment of FASB
Statements No. 87, 88, 106, and 132(R)", and SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities  Including and amendment
of FASB Statement No. 115, and SFAS No. 160,Noncontrolling Interest in
Consolidated Financial Statements  (as amended), were recently issued.
 SFAS No. 155, 156, 157, 158, 159, and 160 have no current applicability to
the Company or their effect on the financial statements would not have been
significant.       12    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[CONTINUED]   Stock Based Compensation - The
Company currently accounts for its stock based compensation in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 123 (as revised in
2004) "Accounting for Stock-Based Compensation." This statement establishes an
accounting method based on the fair value of equity instruments awarded to
employees as compensation. Equity instruments issued to non-employees are valued
based on the fair value of the services received or the fair value of the equity
instruments given up which ever is more reliably measurable.  Beginning in
February 2006, the Company adopted the Provisions of SFAS No. 123 as revised in
2004 which will require that options issued to employees as compensation be
valued at fair value.  During 2006, the Company issued options to
purchase 325,000 shares of common stock to employees and directors. During 2007
the Company has issued options to purchase 425,278 shares of common stock to
employees and directors. All of these options were issued under the Companys
established equity incentive plan.  13    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   NOTE 2 - TRADE ACCOUNTS RECEIVABLE  Trade accounts receivable consist of the
following at: October
31,2007

2006
          (restated)Trade accounts receivable
$
2,028,098

$
1,839,782Related party accounts
receivable
$
-0-

$
5,720Less allowance
for doubtful accounts
$
(19,390)

$
(30,324)$
2,008,708

$
1,815,178  Bad debt (recovery) expense for the
year ended October 31, 2007 and 2006 was $(6,912) and $0,
respectively.    NOTE 3 - PREPAID EXPENSES  Prepaid expenses consist of the following at: October
31,2007

2006
          (restated)Prepaid expenses and
credits
$
274,719

$
198,672Prepaid other taxes
$
312,715

$
420,749$
587,434

$
619,421    NOTE 4 - INVENTORIES  The composition of inventories is as follows
at: October
31,2007

2006
(restated)Aircraft Parts
$
1,000,025

$
921,014Work in Process
Fuel
$
$
405,844
25,960

$
$
519,094
21,812Allowance
$
(47,489)

$
(44,849)$
1,384,340

$
1,417,071       14    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   NOTE 5  PROPERTY PLANT & EQUIPMENT  Property and equipment consists of the following
at:  Estimated life in
years

2007
2006Building and improvements
10 - 40

$
1,280,391
1,268,013Aircraft
15


15,764,364
15,468,885Engines
7 - 10


7,235,864
5,850,153Equipment
3 - 10


201,875
171,480Furniture and fixtures
3 - 10


338,145
333,665Vehicles
5 - 7


135,811
144,55124,956,450
23,236,747Less: Accumulated depreciation and
amortization



(7,654,175)
(6,756,849)$
17,302,275
16,479,898  Depreciation expense
amounted to $1,886,493 and $1,950,910 for the years ended October 31, 2007 and
2006, respectively.  All of the Company's aircraft are held as
collateral on various notes payable and related party notes payable at October
31, 2007 and 2006.  Sales/Leasebacks - In April 2004,
the Company entered into a sale/leaseback agreement with a third party, wherein,
the Company sold an aircraft for $650,000 and entered into an operating lease
(See Note 6).  The Company has recorded a deferred gain of $355,716 which
will be amortized over the life of the lease as an offset to lease expense.
 In addition, $80,000 of the proceeds from this sale are invested in a time
deposit as collateral on the lease.  These funds are recorded as a
restricted time deposit on the Company's records.  In June 2004, the Company entered into a
sale/leaseback agreement with a third party, wherein, the Company sold an
aircraft for $650,000 and entered into an operating lease (See Note 6).
 The Company has recorded a deferred gain of $517,929 which will be
amortized over the life of the lease as an offset to lease expense.  In
addition, $80,000 of the proceeds from this sale are invested in a time deposit
as collateral on the lease.  These funds are recorded as a restricted time
deposit on the Company's records.  In April 2006, the Company entered into a
sale/leaseback agreement with a third party, wherein, the Company sold an
aircraft for $675,000 and entered into a six month operating lease. The Company
has recorded a gain on the sale of the aircraft during the second quarter of
2006 in the amount of $594,586. There is no continuing commitment on the part of
the Company to continue the operating lease beyond six months. In addition,
$95,000 of the proceeds from this sale are invested in a time deposit as
collateral on the lease. These funds are recorded as a restricted time deposit
on the Company records.  Aircraft Dispositions - In December 2006
and January 2008 there were two separate incidents involving the Companys
aircraft. In both cases, the aircraft were damaged beyond repair or
unrecoverable. However, both of the aircraft were fully insured and the Company
does not expect either incident to have any effect on operations or its
financial position.   15    ALPINE AIR
EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  NOTE 6 - OPERATING LEASES  On March 20, 2001, the Company entered into
a 30-year lease agreement with two five-year extension options for real property
at the Provo, Utah Airport. The Company also leases a hangar in Billings,
Montana at the Logan International Airport. The lease is for a term of five
years ending October 31, 2012. These operating lease agreements contain
scheduled rent escalation clauses based on changes in the consumer price index
that are being amortized over the term of the lease using the straight-line
method. In addition to the operating leases reported above, the Company has two
revocable permits (month-to-month leases) with the State of Hawaii, Department
of Transportation to use hangar and office space for its air cargo operations
and the permits are renewed on an annual basis.  Future minimum lease
payments for the years ending October 31, are as follows:  2008
$
24,6252009

24,6252010

24,6252011

24,6252012

24,625Thereafter

133,634$
256,759  Total Rental expense for the period ending October 31,
2007 and 2006 was $163,302 and $172,223 respectively.  Aircraft - In April and June of 2004
and again in April of 2006, the Company entered into certain sale/leaseback
agreements (See Note 5).  The Company has agreed to lease two aircraft for
sixty months.  It has also agreed to lease a third aircraft on a month to
month basis. The Company is also required to pay an additional amount to the
Lessor based on the aircrafts actual flight time. The Lessor is responsible for
engine and propeller overhauls and certain qualifying improvements to all leased
aircraft.  Future minimum lease payments are as follows for the
periods ending October 31:  2008
$
264,0002009

132,000$
396,000  Total Lease expense for the years
ending October 31, 2007 and 2006 was $348,378 and $245,794, respectively.   NOTE 7 - RELATED PARTY TRANSACTIONS  The Company performed maintenance and certain qualified
repairs on an aircraft owned by a related party.  The Company charges the
related party cost plus ten percent markup on all parts and a fixed rate of $55
per hour for labor.  Total related party sales and cost of sales related to
aircraft maintenance are as follows for the year ended October 31:  2007

2006Total related party sales
$
5,849

$
9,717Total related party cost of sales

5,264


8,329Gross margin on related party transactions
$
585

$
1,388      16    ALPINE AIR
EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  NOTE 7 - RELATED PARTY TRANSACTIONS
(CONTINUED)  At October 31, 2007 and 2006, the Company had a
receivable of $0 and $0, respectively, related to these repairs, reported under
accounts receivable - related parties on the balance sheet.  Personal Guarantee - The Company's major
shareholder/officer has personally guaranteed several notes which are also
collateralized by certain aircraft of the Company.  (See Notes 5 and 9)  Aircraft Purchase- In December 2003, the Company acquired 16 aircraft from an entity related
to an officer and majority shareholder of the Company for $9,900,000.  The
consideration paid included $9,104,000 in preferred stock of the Company's
subsidiary Alpine Aviation, Inc. and the assumption of the underlying debt on
the aircraft totaling $709,981.  The remaining $86,019 was recorded as a
payable to the entity related to an officer and majority shareholder of the
Company.  As the aircraft were purchased from a related party they have
been recorded at their carryover basis of $4,111,485.  A discount on
preferred stock in the amount of $3,591,195, net of tax effect of $2,197,320,
has been recorded and is being amortized as dividends over a five year period.
 The preferred stock provides for monthly dividends at an annual rate of
6.5%, and is not convertible. The Company can redeem the subsidiary's preferred
stock any time and the entity related to an officer and majority shareholder of
the Company can call for redemption of the subsidiary's preferred stock any time
after December 31, 2011.  Notes Payable - Related Party - In
connection with the purchase of the aircraft in July 2003 the Company issued a
note to an entity related to an officer and majority shareholder of the Company
in the amount of $1,476,381.  The note payable dated July 31, 2003, bears
an interest rate of 6.5% and called for payments of $33,624 due for 14 monthly
installments with the balance due November 1, 2004. The entity related to an
officer and majority shareholder of the Company previously agreed to forestay
future payment until required by the note's balloon payment which was due
November 1, 2004 but later agreed to defer all payments of principal, interest
and balloon payments until November 1, 2006. Subsequently, all unpaid and
accrued interest and the remaining principal balance was rolled into a new note
at 6.5% interest and a 5-year term. On October 31, 2007 the balance of this note
was $0.  In connection with the purchase of aircraft
in December 2003 from an entity related to an officer and majority shareholder
of the Company, the Company has entered into a Note Payable in the amount of
$86,019.  This note bears interest at 6.5%.  The note holder had
agreed to defer all payments of principal and interest until November 1, 2006.
Subsequently, all unpaid and accrued interest and the remaining principal
balance were rolled into a new note at 6.5% interest and a 5-year term. On
October 31, 2007 the balance of this note was $0.  During May 2004, lease payments due to an
entity related to an officer and majority shareholder of the Company in the
amount of $667,115 were converted into a demand note payable with interest to
accrue at six and one-half (6.50%) percent on the principal balance. No
principal or interest payments were required to be paid until November 1, 2006.
Subsequently, all unpaid and accrued interest and the remaining principal
balance was rolled into a new note at 6.5% interest and a 5-year term. On
October 31, 2007 the balance of this note was $0.  During February 2007, preferred stock
dividends due to an entity related to an officer and majority shareholder in the
amount of $1,849,250 was converted into a demand note payable with interest to
accrue at six and one-half (6.50%) percent on the principal balance. On October
31, 2007 the balance of this note was $0.  The following is a
summary of notes payable to related parties at October 31, 2007:  Notes payable 
related party
                                                                    $
             - __________       17    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS    NOTE 8  LINE OF CREDIT  During the year ended October 31, 2006, the
Company initiated an overdraft line of credit with a Lender. The balance is
currently reported as a separate line item in current liabilities on these
financial statements. It is a $100,000 10-year revolving line maturing August
25, 2016. Interest rate at Lender's Prime plus 1% with a $0 balance on October
31, 2007. Secured by same six aircraft as Note payable #2 in Note 9 below.    NOTE 9  LONG TERM DEBT  Notes payable arose from the purchase
of aircraft during July 2003 [See Note 7], which were subsequently refinanced
and consisted of the following at:  October 31, 2007 __________  Note payable issued August 28, 2006 for $1,936,193 due
August 28, 2009. Interest rate of 9.5% at October 31, 2007.
 Secured by five Aircraft. Reg # N-410UB, N-17ZV, N-194GA, N-955AA, and N-99GH. Personally guaranteed by an
officer/shareholder.                                                                                  $1,563,407  Lease Obligation issued July 31, 2007 for $6,000,000 due
Sept 30, 2012. Implied interest rate of 9.33%. Secured by seven Aircraft
Reg#N95WA, N24BH, N950AA, N99CA, N197GA, N127BA, and N192GA.
                                                                 5,674,781 _________ $7,238,188 Less
current portion     (1,264,408) __________ Long-term
portion        $5,973,780 __________  The estimated aggregate maturities required on long-term
debt for each of the individual years at October 31, 2007 are as follows: 2008
     1,264,408 2009
     2,293,348 2010
     1,189,889 2011
     1,305,765 2012
     1,184,778 ___________ $
7,238,188 ____________  18    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  NOTE 10 - PREFERRED STOCK - SUBSIDIARY  The Company's subsidiary Alpine Aviation,
Inc. is authorized to issue 1,000,000 shares of preferred stock with a stated
value of $9.104. At October 31, 2007, 1,000,000 shares are issued and
outstanding.  The preferred stock provides for monthly dividends at an
annual rate of 6.5%, and is not convertible. The Company can redeem the
subsidiarys preferred stock any time and the Holder can call for redemption of
the subsidiary's preferred stock any time after December 31, 2008.
 Effective May 1, 2007 the Company became the Holder of 100% of the
Preferred Stock of its subsidiary, Alpine Aviation, Inc. when it exchanged its
own Preferred Stock in return for the Alpine Aviation, Inc. outstanding
Preferred Stock. Due to the intercompany relationship, the Alpine Aviation, Inc.
Preferred Stock is now eliminated in the consolidation process.  NOTE 11  STOCKHOLDERS EQUITY  Common Stock - The Company is authorized to
issue 100,000,000 shares of $.001 par value common stock. As of October 31,
2007, 36,271,461 shares are issued and outstanding.  Preferred Stock - The Company is authorized
to issue 1,000,000 shares of $.001 par value preferred stock. In April 2007 the
Board of Directors authorized the issuance of 1,000,000 shares of Preferred
Stock with a stated value of $9.104. At October 31, 2007, 1,000,000 shares are
issued and outstanding. The preferred stock provides for monthly dividends at an
annual rate of 6.5%, and is convertible at any time by the holder based on the
current market price of the Companys stock. The Company can redeem the
preferred stock any time and the Holder can call for redemption of the preferred
stock any time after December 31, 2011. As a subsequent event, on November 9,
2007 the Board of Directors voted to redeem 40,000 shares of the outstanding
preferred stock.  Stock Option Plan - In August 2001, the
stockholders approved the adoption of an equity incentive plan. The plan allows
the Company to issue incentive stock options (ISO's), non-statutory stock
options and restricted shares to employees, directors, and consultants of the
Company. Annually, commencing January 2002, the aggregate number of shares of
the Company's common stock available for award under the plan shall increase by
the lesser of 250,000 or seven percent of the outstanding stock less the number
of shares previously authorized for the plan, respectively. As of October 31,
2006 and  2007 a total of 1,028,540 shares and 1,278,540 shares,
respectively, of the Company's common stock have been reserved for issuance
under the plan. After August 18, 2011, the plan terminates and no further
options may be granted. The exercise price of options granted under the terms of
the plan must not be less than 100% of the fair market value of the shares as of
the date of grant. Additionally, no individual may be granted more than 100,000
options in any given year. All options issued under the plan are exercisable for
ten years and vest after two years. The Company has not received and does not
intend to request a determination from the Internal Revenue Service that the
options issued under the plan will qualify under the Code for treatment as
qualified incentive stock options.  The Company previously adopted the
disclosure only provisions of Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" (SFAS 123). During 2006, the
Company issued options to purchase 325,000 shares of common stock to employees
and directors. During 2007 the Company has issued options to purchase 425,278
shares of common stock to employees and directors.  The fair value of these
new options was estimated at the date of grant using the Black-scholes
option-pricing model with the following weighted-average assumptions, an
interest rate of five and 09/100 percent  for the period ended October 31,
2007; expected life is ten years for the outstanding options. It is assumed that
no dividends will be paid during the periods of calculation.  At October
31, 2007, volatility is calculated to be forty-four, resulting in a respective
weighted-average fair value per option of $0.25. Option pricing models require
the best-input assumptions available were used to value the options and
management believes the resulting option values are reasonable.      19     ALPINE AIR EXPRESS,
INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  NOTE 11  STOCKHOLDERS EQUITY (CONTINUED)  A summary of the status of the options
outstanding under the Company's stock option plans at October 31, 2007, is
presented below: October 31, 2007

October 31, 2006Shares

Weighted Average Exercise Price

Shares

Weighted Average Exercise
PriceOutstanding at beginning of
period
881,620

$
1.75

556,620

$
2.53Granted
425,278


0.40

325,000


0.50Exercised
-


-

-


-Forfeited
95,792


0.48

-


-Expired
-


-

-


-Outstanding at end of period
1,211,106

$
1.40

881,620

$
1.75Weighted average fair value of options granted
during the year
425,278


0.40

325,000

$
0.50  A summary of the status of the options outstanding under
the Company's stock option plans and employment agreements at October 31, 2007
is presented below:  Options Outstanding

Options ExercisableRange of Exercise Prices

Number
of Outstanding

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

Number Exercisable

Weighted Average Exercise
Price$2.50 - $2.75

556,620

3.8 years

$
2.53

556,620

$
2.53$0.50
$0.40

245,000
409,486

8.7 years
9.6 years

$
$
0.50
0.40

-0-
30,000

$
$
0.50
0.401,211,106

6.8 years

$    1.40

586,620

$
    1.40   NOTE 12 - INCOME (LOSS) PER COMMON SHARE The following data show the amounts used in computing net
income (loss) per common share, for the years ended October 31: For the Year Ended
October 31,2007

2006Net income (loss) available to common
shareholders

$
1,846,548

$
401,215Weighted average number of common shares used in
basic EPS


36,271,461


36,271,461Dilutive effect of preferred
stock


26,776,471


-Dilutive effect of stock options
Weighted average number of common shares and
dilutive potential common stock used in diluted EPS


586,620

63,634,552


-

36,271,461    20     ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  NOTE 12 - INCOME (LOSS) PER COMMON SHARE
(continued)   For the year ended October 31, 2007 and
2006, 1,226,898 and 869,494 outstanding options, respectively, were excluded
from the calculation of diluted earnings per share because their effect was
anti-dilutive.  During December 2003 the Company issued 1,000,000 series A,
6.5% preferred shares of the Company's subsidiary Alpine Aviation, Inc. with a
stated value of $9.104 per share, for the purchase of aircraft.  These
preferred shares have no voting rights and are not convertible into common stock
and thus are not included in the calculations of earnings per share. During
April 2007 the Company issued 1,000,000 series A, 6.5% preferred shares with a
stated value of $9.104 per share.  These preferred shares have no voting
rights and are convertible into common stock at the current market value. They
do have a dilutive effect and are included in the computation of EPS.   NOTE 13  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].  SFAS No. 109 requires the Company to
provide a net deferred tax asset or liability equal to the expected future tax
benefit or expense of temporary reporting differences between book and tax
accounting and any available operating loss or tax credit carryforwards.
 At October 31, 2007 and October 31, 2006, respectively, the total of all
deferred tax assets was approximately $3,803,000 and $4,111,000 and the total of
the deferred tax liabilities was approximately $2,252,000 and $1,638,000.
 The amount of and ultimate realization of the benefits from the deferred
tax assets for income tax purposes is dependent, in part, upon the tax laws in
effect, the Company's future earnings, and other future events, the effects of
which cannot be determined.  The components of income tax expense (benefit) from
continuing operations for the year ended October 31,  2007

2006Current income tax expense (benefit):Federal
$
-

$
-State

-


-Current
tax expense (benefit)
$
-

$
-Deferred tax expense (benefit) arising from:Excess
of tax over financial accounting depreciation
$
613,629

$
(35,272)Deferred
gain

55,646


66,328Allowance
for bad debt

4,151


454,871Inventory
Shrinkage

(1,003)


(17,025)Reserve
for accrued vacation

(8,944)


(37,832)Accrued
interest

12,800


66,500Alternative
minimum tax credit

-


-Foreign
net operating loss carryforward

-


-Net
operating loss carryover

85,357


559,810Valuation
allowance

(160,145)


(534,796)Capital
loss carryover

160,145


534,796Net deferred tax expense
(benefit)
$
761,636

$
1,057,380   21     ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  NOTE 13 - INCOME TAXES [CONTINUED]  Deferred income tax expense results
primarily from the reversal of temporary timing differences between tax and
financial statement income.  A reconciliation of income tax expense from
continuing operations at the federal statutory rate to income tax expense at the
company's effective rate is as follows as of October 31: 2007 ___________ Computed tax at the expected
statutory rate
                                                           34.00% State and local income taxes, net
of federal benefit
                                                  3.96% Capital loss carryover
                                                                                                     - Valuation allowance
                                            
                                                      (6.62)% Other Items
                                                              
                                                      .13% ___________ Income
tax expense
                                                  
                                             31.47% ___________    The temporary differences, tax credits and
carryforwards gave rise to the following deferred tax asset (liability) for the
year ended October 31, 2007 and at October 31, 2006:  October 31,

October 31,2007

2006Allowance for bad debt
$
7,360

$
11,511Reserve for accrued vacation

90,183


81,240Accrued interest

927


13,726Inventory Shrinkage

18,027


17,025Net
current tax assets
$
116,497

$
123,502Capital Loss carryforward
$
386,258

$
546,403Net operation loss
carryforward

2,953,401


3,038,758Valuation allowance

(584,385)


(744,530)Alternative minimum tax
credits

35,462


35,462Excess of tax over book accounting
depreciation

(2,251,947)


(1,638,319)Deferred sales

113,448


169,094Foreign net operating loss
carryforward

198,127


198,127Net
deferred tax (liability)
$
850,364

$
1,604,995  As of October 31, 2007 the Company has
capital  loss carryforwards of approximately $1,018,000 that expire in 2010
and a net operation loss carryforward of approximately $7,780,000 that expires
in 2025. A valuation allowance in the amount of approximately $584,385 was
recorded at October 31, 2007, due to uncertainty of whether the company is more
than likely not to generate sufficient capital gains and foreign income to
utilize the benefit of these loss carryforwards before their expiration.
 The change in the valuation allowance for the year ended October 31, 2007
and 2006 was approximately ($160,000) and $535,000, respectively.     22    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   NOTE 14  RESTATEMENT  The Company has restated its financial
statements for the year ended October 31, 2006. The significant changes made are
further described and summarized below.  Upon current review of accounting standards
and interpretations, management has determined to change its accounting
treatment of the preferred stock issued by its subsidiary.  The preferred
stock which has previously been disclosed as part of stockholders' equity is now
reclassified outside of equity as a mezzanine item on the balance sheet.
 Further, the dividends on preferred stock which previously were deducted
from Net Income to arrive at Income Available to Common Stockholders, has been
reclassified as an expense to arrive at Net Income. In April 2007 the Company
became the Holder of 100% of the Preferred Stock of its subsidiary, Alpine
Aviation, Inc. when it exchanged its own Preferred Stock in return for the
Alpine Aviation, Inc. outstanding Preferred Stock. Starting in April 2007 and
due to the intercompany relationship, the Alpine Aviation, Inc. Preferred Stock
is now eliminated in the consolidation process.   The following tables highlight the
significant areas of change from those previously reported:  For the Year Ended October 31,
2006As Previously Reported

Restated

ChangeTotal Assets
$
22,836,992

$
22,836,992

$
-Stockholders' Equity
$
11,536,684

$
3,958,941

$
7,577,743Net Income (Loss)
$
1,711,215

$
401,215

$
1,310,000Income (Loss) available to common
stockholders'
$
401,215

$
401,215

$
-Basic Earnings (Loss) per Share
$
.01

$
.01

$
-     NOTE 15  CONCENTRATIONS  U.S. Postal Service Contracts- The
Company receives the majority of its revenues from contracts with the U.S.
Postal Service (USPS).  For the year ended October 31, 2007 and 2006, the
revenues from contracts with the USPS represented 78% and 86% of total revenues,
respectively.  At October 31, 2007 and 2006, accounts receivable from the
USPS totaled $1,257,995, and $1,357,171 or 61% and 74%, respectively. The
contracts currently in effect for USPS routes will expire between July and
November 2009 for mainland US operations and in June 2008 for Hawaii with
certain renewal provisions for an additional 2 years. The loss of this customer
would have a material negative effect on the operations of the Company.              23    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  NOTE 16 -  CHANGE IN ACCOUNTING METHOD  During the previous year ended October 31,
2006 we changed our method of accounting for major engine and airframe component
overhaul costs from the direct expense method to the deferral method (costs are
capitalized and depreciated over the expected life of the asset). All aircraft
purchased in the current and previous periods (2003 through 2006) had their
original basis allocated to the engines and major airframe components, which
were then capitalized separately and depreciated over their estimates lives. The
Cumulative effects of this change resulted in reduced direct costs of $271,392
during the current fiscal year, reduced direct costs of $303,672 in fiscal year
2005, and increased direct costs of $84,009 in fiscal year 2004 and prior
periods. The 2005 and 2006 amounts are included in their respective income
statement positions, while the prior period amount is reflected in a single line
item in the Statement of Stockholders Equity as an adjustment to ending 2005
Retained Earnings.  Although not material to prior periods, the
Company has determined that this change in accounting method will provide a more
consistent approach to reporting the actual expenses related to the usage of
those engines and airframe components  in future periods than the
previously used direct expense method. It will also provide a more consistent
reporting of historical values related to the value of the overhauled engine of
airframe components in future periods.  The amount of the cumulative effect of the
change in accounting method related to the engines and major airframe components
is due exclusively to the allocation and reclassification of fixed asset
balances, depreciation of the asset value, and changes in the retained earnings
balances for items which had been expensed subsequent to the aircraft
acquisition.  This change in accounting method had a minimal effect (less
than $0.01) on earnings per share for the prior year presented.   NOTE 17  COMMITMENTS AND CONTINGENCIES  Lawsuit - The Company has been named in a
lawsuit by a former employee for claims of approximately $50,000 related to
wrongful termination. The plaintiff is not actively pursuing prosecution and the
Company believes the case may be dismissed for lack of prosecution.  FAA Matters - Several allegations and
proposals have been put forth by the FAA and are currently being reviewed by the
Company. None of these assertions have resulted in any enforcement action
against the Company, nor does the Company expect any actions as a result of
their allegations. Management believes that the ultimate resolution of these
matters will not have a material impact on the financial condition of the
Company.  The Company operates its aircraft under a
certificate which allows it to accumulate time between overhauls (TBO) in excess
of manufacturer's recommendations.  The Company regularly inspects its
engines.  A majority of the engines used by the Company have accumulated
TBO in excess of manufacturer's recommendations.   NOTE 18  SUBSEQUENT EVENTS  Preferred Stock Redemption -  On November 9, 2007
the Alpine Air Express Board of Directors voted to redeem 40,000 shares of the
Preferred Stock issued on May 1, 2007.  Aircraft Accident  On January 14, 2008, an Alpine
Aviation Inc. aircraft disappeared from radar on its landing approach to the
airport in Lihue, HI. The aircraft and the pilot are both presumed lost. The
aircraft was fully insured and the Company does not expect this accident to have
any significant effect on operations or its financial position.  24     PART III  Item 8(A)T.  CONTROLS AND
PROCEDURES  Management's Annual Report on Internal Control Over
Financial Reporting.  As of the end
of the period covered by this Annual Report, we carried out an evaluation, under
the supervision and with the participation of our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures.  Based on this evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures
are effective in timely alerting them to material information required to be
included in our periodic Securities and Exchange Commission reports.  It
should be noted that the design of any system of controls is based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.  In addition, we
reviewed our internal controls over financial reporting, and there have been no
changes in our internal controls or in other factors in the last fiscal quarter
that has materially affected or is reasonably likely to materially affect our
internal control over financial reporting.  Changes in Internal Control Over
Financial Reporting.  There have
been no changes in internal control over financial reporting during the period
covered by this Annual Report.  ITEM 9.  DIRECTORS AND EXECUTIVE
OFFICERS, PROMOTERS, AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT  Directors and Executive
Officers.  The members
of the Board of Directors of Alpine Air serve until the next annual meeting of
stockholders, or until their successors have been elected. The officers serve at
the pleasure of the Board of Directors.  The following are our directors
and executive officers.  Name
Age
Position
Held Position SinceEugene R. Mallette
58
CEO
1986Don T. Squire, Jr.
48
Chief Financial Officer
2005Max A. Hansen
58
Secretary/Treasurer and Director
1986Joseph O. Etchart
59
Chairman
2005Kenneth D. Holliday
62
Director
2002Michael Brown
66
Director
2006Ronald L. Pattison
50
Director
2006  Mr. Mallette
began his career with Alpine Aviation in 1979 as its Sales Manager, then became
General Manager later in 1979.  He became Chief Executive Officer and
Director upon acquiring Alpine Aviation in 1986.  Prior to his employment
by Alpine Aviation, he was employed by the State of Montana as a staff auditor.
 He received a B.A. in Business Administration from Carroll College in
1971.  Mr. Mallette holds a private pilot's license and maintains his
proficiency.  He devotes time to civic and charitable causes and was
previously Chairman of the Better Business Bureau of Utah County and
Vice-President of the Provo Chamber of Commerce.  Don T. Squire
Jr., was named Chief Financial Officer in September 2005 after serving as
Director of Accounting since June 2005.  Mr. Squire is a licensed CPA and
has served as a consultant and in finance and accounting leadership capacities
in private industry for the past 17 years. His most recent consulting assignment
prior to coming to Alpine involved the restructuring of Sheaffer Pen
Manufacturing (a BIC, Inc. subsidiary). He has served as a Controller and
Finance Manager for Rehab Designs of America (GE Finance Subsidiary), Oriflame
USA, Priority Dispatch Corp. (formerly Medical Priority Consultants), Infinity
Nutritionals, and other      organizations.
He has served as an adult leader in the Boy Scouts of America for over 10 years,
including time as a District Chairman.  Max Hansen
has been a director since 1986.  He has been practicing law since 1976 and
has owned his own firm, Max A. Hansen & Associates, P.C. since 1980.
 Mr. Hansen provides legal services to Alpine Air.  From 1988 to 1989,
he was President of the Montana Bar Association and is currently a member of the
American Bar Association House of Delegates. Mr. Hansen has received
distinguished service awards from the Montana State Bar Association and the
Montana Supreme Court.  He received a JD degree from the University of San
Diego in 1976, where he was a member of the law review.  He received a BA
in Political Science from Carroll College in 1971.  Joseph O.
Etchart has been a member of our Board of Directors since April, 2002.  He
formerly served as Alpine Air's Director of Public and Investor Relations.
 He is also the President and CEO of Hinsdale Land Company, a real estate
and agricultural enterprise in Montana.  Since 1985, Mr. Etchart has served
on the Board of Directors, and is a former Chairman of the Board, of Montana
Livestock Ag Credit, one of the premier agricultural lending institutions in the
Pacific Northwest.  He served two terms as President of the Washington,
D.C. based National Public Lands Council, where he was involved in the
legislative and regulatory process associated with federal land commodity
production.  In addition, Mr. Etchart has held numerous civic, political
and appointed posts, including Campaign Finance Chairman during the first
successful election of Montana Governor Marc Racicot.  Mr. Etchart received
a Bachelor of Arts degree in Sociology from Carroll College in 1970 and is an
active member of numerous organizations, including the Knights of Columbus.  Kenneth D.
Holliday joined our Board of Directors in September, 2002.  He has
extensive experience in the aviation industry and currently serves as President
and CEO of Avcon, Inc., a consulting company assisting airlines, aviation and
travel related companies.  He was formerly the President and CEO of
TransMeridian Airlines, an air carrier contracted to fly A-320 aircraft for one
of the nation's largest tour operators.  Mr. Holliday also has served as
President and CEO of Private Jet Expeditions, Inc., where he directed airline
growth from one B-727 aircraft to 16 MD-80 aircraft over a two-year period.
 Mr. Holliday received a Bachelor of Science degree in Industrial
Management from Clemson University and USAF undergraduate pilot training at
Williams Air Force Base in Arizona.  Michael Brown
was most recently the Managing Director and Head of Mergers and Acquisitions in
the Investment Banking Group of Wells Fargo Securities where he completed
numerous mergers and acquisitions, private placements and initial public
offerings for companies in various segments of the consumer and technology
industries. Mr. Brown was a member of the Investment Banking Commitment
Committee of Wells Fargo Securities and coordinated the firm's investment
banking activities in Southern California. Prior to joining the predecessor of
Wells Fargo Securities, in September 2000, Mr. Brown was a Managing Director in
Sutro & Co.'s Investment Banking Department and Head of Mergers and
Acquisitions. Before joining Sutro, Mr. Brown was the founding Managing Director
of Drexel Burnham Lambert's West Coast Mergers and Acquisitions Department.
During his seven-year tenure at Drexel, Mr. Brown's transactions included
arranging the $1.6 billion sale of Jack Kent Cooke's cable properties to a
consortium of cable operators, Turner Broadcasting's $1.2 billion purchase of
MGM, the sale of the Beverly Wilshire Hotel to Regent International, the sale of
the Desert Inn and Sands Casinos to MGM Grand, and T. Boone Pickens' attempted
takeovers of Gulf Oil and UNOCAL. Mr. Brown was a member of Turner
Broadcasting's Board of Directors. Prior to joining Drexel, Mr. Brown was a
Partner specializing in mergers and acquisitions at Kidder Peabody & Co. in
Los Angeles and Vice President of Mergers and Acquisitions in the New York
office of Goldman Sachs. Mr. Brown was a member of the faculty of Harvard
Business School. Mr. Brown is a graduate of Harvard University (M.B.A.) and the
Wharton School of the University of Pennsylvania (B.S.&E.). He has served
with the U.S. Army Special Forces.  Ronald L.
Pattison received his CPA Certificate in August of 1984 after graduating with a
B.A. in Business Administration, specializing in Accounting. Ron has specialized
in the design and administration of defined contribution plans, but also has a
working knowledge of the requirements for defined benefit plans. He was the
manager of the Defined Contribution practice group in the Albuquerque, New
Mexico office of a national consulting firm. Ron left that practice in December
of 1990 to start Pattison Pension Specialists, Inc., where he is currently a
principal.       Alpine Air established a standing
audit committee in the first quarter of its 2002 fiscal year.  The
committee has adopted a charter and currently consists of three members, Ron
Pattison (Chair), Joe O. Etchart and Michael Brown.  Alpine Air does not
have standing nominating or compensation committee.  Except as
indicated below, to the knowledge of management, during the past five years, no
director, person nominated to become a director, executive officer, promoter or
control person of Alpine Air:  (1) was a
general partner or executive officer of any business entity that filed any
bankruptcy petition, either at the time of the bankruptcy or two years prior to
that time;  (2) was
convicted in a criminal proceeding or named subject of a pending criminal
proceeding (excluding traffic violations and 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, barring, suspending or otherwise limiting his or her involvement in
any type of business, securities or banking activities;  (4) was found
by a court of competent jurisdiction in a civil action, the Securities and
Exchange Commission or the Commodity Futures Trading Commission to have violated
any federal or state securities or commodities law, and the judgment has not
been reversed, suspended or vacated.  Code of Ethics.  We filed our
Code of Conduct for our executive officers with our Amended 10KSB dated October
31, 2003, and filed with the Securities and Exchange Commission on March 19,
2004.  Compliance with Section 16(a) of the
Exchange Act.  Alpine Air
believes all forms required to be filed under Section 16 of the Exchange Act
have been timely filed.  On January 9,
2004, our Board of Directors adopted an Insider Trading Policy.  The
purpose of this Policy is to ensure that our directors, executive stockholders
and 10% stockholders comply with Section 16(a) of the Exchange Act and to
establish procedures by which our insiders may buy and/or sell our common stock
without violating the securities laws' prohibition against insider trading.  ITEM 10.  EXECUTIVE
COMPENSATION  The following
tables set forth certain summary information concerning the compensation paid or
accrued for each of Alpine Air's last three completed fiscal years to Alpine Air
or its principal subsidiaries Chief Executive Officer and each of its other
executive officers that received compensation in excess of $100,000 during such
period (as determined at October 31, 2007, the end of Alpine Air's last
completed fiscal year). Unless indicated otherwise, all share figures in this
Item reflect the three-for-one split of our issued and outstanding common stock
in January, 2006.  Summary Compensation
Table.  No executive
officer earned over $100,000 in compensation during the previous 3 completed
fiscal years.  Options/SAR
Grants.  During the
year ended October 31, 2006 we issued options to purchase 5,000 shares each to
the CEO, Eugene Mallette and to the CFO, Don T. Squire Jr.. These were issued as
part of the same option grant offered to all full-time employees in June of
2006.  During the
year ended October 31, 2007 we issued options to purchase 5,000 shares each to
the CEO, Eugene Mallette and to the CFO, Don T. Squire Jr.. These were issued as
part of the same option grant offered to all full-      time employees
in June of 2006. In addition to these, the CFO was also awarded 30,000 options
to purchase shares as part of an annual bonus.  Aggregated Option/SAR
Exercises and Fiscal Year-End Option/SAR Value Table.  No stock options or SARs
were exercised during the fiscal year ended October 31, 2007.  Pension Table.  None.  Compensation of
Directors.  During the
fiscal year ended October 31, 2007, each Director was issued stock options to
acquire 10,000 shares of common stock. These options have a two year restriction
and an exercise price of $0.40 per share.  During the
fiscal year ended October 31, 2006, each Director was issued stock options to
acquire 10,000 shares of common stock. These options have a two year restriction
and an exercise price of $0.50 per share.  During the
fourth quarter of the current year, the Board of Directors fees were increased
to $4,000 per quarter from the previous rate of $2,500 per quarter for services
rendered.  Termination of
Employment and Change of Control Arrangement.  There are no
compensatory plans or arrangements, including payments to be received from
Alpine Air, with respect to any person named in Cash 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
Alpine Air or its subsidiaries, or any change in control of Alpine Air, or a
change in the person's responsibilities following a change in control of Alpine
Air.  Stock
Option Plan.  In August
2001, Alpine Air adopted an equity incentive plan.  The plan allows Alpine
to issue incentive stock options ("ISOs") within the meaning of section 422A of
the Internal Revenue Code of 1986, as amended ("Code"), non- statutory stock
options and restricted shares to employees, directors and consultants of Alpine
Air.  A total of 770,000 shares of Alpine Air's common stock have been
reserved for issuance under the plan.  As of January of each year
commencing in the year 2002, the aggregate number of shares of Alpine Air's
common stock that may be awarded under the plan shall automatically increase by
a number equal to the lesser of (i) 7% of the total number of shares of Alpine's
common stock outstanding, minus the number of shares of stock previously
authorized for award under the plan at the close of the preceding calendar year
or (ii) 250,000 shares of common stock.  The exercise
price of options granted under the terms of the plan must not be less than 100%
of the fair market value of the shares as of the date of grant, or 110% of the
fair market value for ISOs granted to optionees possessing more than 10% of the
total combined voting power of all classes of stock of Alpine Air for ISOs and
85% of the fair market value of the stock for nonqualified options.  In
addition, the aggregate fair market value (as determined on the date of each
option grant) of shares with respect to which ISOs are exercisable for the first
time by an employee during any calendar year shall not exceed $100,000.
 Additionally, no individual may be granted more than 100,000 options in
any given year.  Alpine Air
has not received and does not intend to request a determination from the
Internal Revenue Service that the ISOs issued under the plan will qualify under
the Code for treatment as ISOs.  The plan
provides that an option may be exercised by payment in cash or, with the consent
of the board of directors, by delivery of common stock of Alpine Air valued at
its fair market value on the date of payment.  An option holder shall not
have any of the rights of a shareholder with respect to the shares subject to
the option until the shares have been fully paid and issued.       The board of
directors or a committee of the directors will initially administer the plan,
prescribe the form and content of options to be granted, receive elections for
the exercise of stock conversion rights, determine the terms and restrictions on
all restricted stock awards granted under the plan, and other items.  No
stock option can be granted for a period longer than ten years or for a period
longer than five years for ISOs granted to optionees possessing more than 10% of
the total combined voting power of all classes of stock of Alpine Air.  The
right to exercise an option terminates three months after the termination of an
employees employment, unless the employee dies or is disabled, in which event
the option will remain exercisable for a period of one year after the
termination of employment.  The plan terminates, and no further options may
be granted after August 18, 2011.  In August
2001, Alpine Air issued options to acquire 547,185 shares of its common stock at
an exercise price of $2.50 per share and an option to purchase 79,998 shares at
an exercise price of $2.75 per share.  In 2002, Alpine Air issued options
to acquire 2,562 shares of its common stock at an exercise price of $2.50 per
share.  All options were issued under the plan.  In addition, a total
of 82,251 options have been forfeited through October 31, 2005.  During 2006,
the Company issued options to acquire 325,000 shares of its common stock at an
exercise price of $0.50 per share, to employees and directors of the company. To
date 80,000 of the 2006 options have been forfeited. During 2007, the Company
issued options to acquire 425,278 shares of its common stock at an exercise
price of $0.40 per share, to employees and directors of the company. To date
15,792 of the 2007 options have been forfeited.  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT  The following
table sets forth information relating to the beneficial ownership of Alpine
Air's common stock as of  October 31, 2007 by each person known by Alpine
Air to be the beneficial owner of more than 5% of the outstanding shares of
common stock and each of Alpine Air's directors and executive officers.  Name and Address of Principal Stockholders
Common Stock
PercentageEugene R. Mallette
1177 Alpine Air Way
Provo, Utah 84601
27,729,465(1)(3)
76.4%SCS, Inc.
455 East 500 South, #201
Salt Lake City, Utah 84111
2,450,214(2)
6.7%Officers and DirectorsEugene R. Mallette, CEO and Director
27,729,465(1)(3)
76.4%Don T. Squire, Jr. CFO
60,000(4)
Less than 1%Max Hansen, Secretary/Treasurer, Director
3,000
Less than 1%Joseph O. Etchart, Director
18,945
Less than 1%Ronald L. Pattison, Director
42,600
Less than 1%All officers and directors as a group (5
persons)
27,854,010
76.8%  (1) IFW St.
Croix Group, LLLP dissolved its partnership in February of 2007 and distributed
the shares to Mr. Mallette.  (2) 2,245,464
of these shares were issued as restricted stock as compensation on a consulting
contract entered into by the Company. The contract covers a two year period and
lifting of the restricted status is dependant on contract performance.  (3) 15,000 of
these shares are in the name of Mary Lou Mallette, Mr. Mallette's wife.  (4) These
shares were issued 11/22/2005 and are restricted.       Unless otherwise noted above, Alpine
Air believes that all persons named in the table have sole voting and investment
power with respect to all shares of common stock beneficially owned by them.
 For purposes hereof, a person is deemed to be the beneficial owner of
securities that can be acquired by such person within 60 days from the date
hereof upon the exercise of warrants or options or the conversion of convertible
securities.  Each beneficial owner's percentage ownership is determined by
assuming that any warrants, options or convertible securities that are held by
such person (but not those held by any other person) and which are exercisable
within 60 days from the date hereof, have been exercised.  Securities Authorized for Issuance under Equity
Compensation Plans.  Equity
Compensation Plan Information  Plan Category
Number of Securities to be issued upon exercise of
outstanding options, warrants and rights
Weighted-average exercise price of outstanding
options, warrants and rights
Number of securities remaining available for future
issuance under equity compensation plans excluding securities reflected in
column (a)(a)
(b)
(c)Equity compensation plans approved by security
holders
556,620
245,000
409,486
$2.53
$0.50
$0.40
556,620
245,000
209,486Equity compensation plans not approved by security
holders
-0-
-0-
-0-Total
1,211,106
$1.40
1,211,106   ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS  Aircraft
Purchase - In December 2003, the Company acquired 16 aircraft from an entity
related to an officer and majority shareholder of the Company for $9,900,000.
 The consideration paid included $9,104,000 in preferred stock of the
Company's subsidiary Alpine Aviation, Inc. and the assumption of the underlying
debt on the aircraft totaling $709,981.  The remaining $86,019 is recorded
as a payable to the entity related to an officer and majority shareholder of the
Company.  As the aircraft were purchased from a related party they have
been recorded at their carryover basis of $4,111,485.  A discount on
preferred stock in the amount of $3,591,195, net of tax effect of $2,197,320,
has been recorded and is being amortized as dividends over a five year period.
 The preferred stock provides for monthly dividends at an annual rate of
6.5%, and is not convertible. However, in April 2007 the Board of Directors
authorized the issuance of 1,000,000 shares of Preferred Stock in the Parent
Company, Alpine Air Express, with a stated value of $9.104, which were exchanged
with the holder for the outstanding preferred stock in the subsidiary. The newly
issued preferred stock in the Parent Company provides for monthly dividends at
an annual rate of 6.5%, and is convertible at any time by the holder based on
the current market price of the Companys stock. The Company can redeem the
preferred stock any time and the Holder can call for redemption of the preferred
stock any time after December 31, 2011.  Notes Payable
- Related Party - In connection with the purchase of the aircraft the Company
issued a note to an entity related to an officer and majority shareholder of the
Company in the amount of $1,476,381.  The note payable dated July 31, 2003,
bears an interest rate of 6.5% and called for payments of $33,624 due for 14
monthly installments with the balance due November 1, 2004. The entity related
to an officer and majority shareholder of the Company previously agreed to
forestay future payment until required by the note's balloon payment which was
due November 1, 2004 but later agreed to defer all payments of principal,
interest and balloon payments until November 1, 2006. Subsequently, all unpaid
and accrued interest and the remaining principal balance was rolled into a new
note at 6.5% interest and a 5-year term. On October 31, 2007 the balance of this
note was $0.  In connection with the purchase of aircraft during 2004 from
an entity related to an officer and majority shareholder of the Company, the
Company has entered into a Note Payable in the amount of $86,019.  This
note bears interest at 6.5%.  The note holder had agreed to defer all
payments of principal and interest until November 1, 2006. Subsequently, all
unpaid and accrued interest and the remaining principal balance was rolled into
a new note at      6.5% interest
and a 5-year term. On October 31, 2007 the balance of this note was $0. During
May 2004, lease payments due to an entity related to an officer and majority
shareholder of the Company in the amount of $667,115 were converted into a
demand note payable with interest to accrue at six and one- half (6.50%) percent
on the principal balance. No principal or interest payments were required to be
paid until November 1, 2006. Subsequently, all unpaid and accrued interest and
the remaining principal balance was rolled into a new note at 6.5% interest and
a 5-year term. On October 31, 2007 the balance of this note was $0.  Personal
Guarantee - The Company's major shareholder/officer has personally guaranteed
loans which are also collateralized by certain aircraft of the Company.  ITEM 13. EXHIBITS  (a) Exhibits.  31.1  302 Certification of Eugene Mallette  31.2  302 Certification of Don T. Squire Jr.  32     906 Certification  Item 14.  Principal Accountant Fees and
Services.  The following is a summary
of the fees billed to Alpine Air by its principal accountants during the fiscal
years ended October 31, 2007, 2006, and 2005:  Fee category
2007

2006

2005Audit fees
$
89,936

$
74,411

$
82,541Audit-related fees

0


0


0Tax fees

0


0


0All other fees

0


0


0Total fees
$
89,936

$
74,411

$
82,541  Audit fees -
Consists of fees for professional services rendered by our principal accountants
for the audit of Alpine Air's annual financial statements and the review of
financial statements included in Alpine Air's Forms 10-QSB or services that are
normally provided by our principal accountants in connection with statutory and
regulatory filings or engagements.  Audit-related
fees -  Consists of fees for assurance and related services by our
principal accountants that are reasonably related to the performance of the
audit or review of Alpine Air's financial statements and are not reported under
"Audit fees."  Tax fees -
Consists of fees for professional services rendered by our principal accountants
for tax compliance, tax advice and tax planning.  All other
fees -  Consists of fees for products and services provided by our
principal accountants, other than the services reported under "Audit fees,"
"Audit-related fees" and "Tax fees" above.  The fees disclosed in this
category include due diligence, preparation of pro forma financial statements as
a discussion piece for a Board  member, and preparation of letters in
connection with the filing of Current Reports on Form 8-K.  Policy on Audit Committee Pre-Approval
of Audit and Permissible Non-Audit Services of Independent Auditors.  The Company's
Audit Committee Charter does not provide for the approval in advance of the
performance of professional services to be provided to the Company by its
principal accountant.  All services rendered by our      principal
accountant are performed pursuant to a written engagement letter between us and
the principal accountant. 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.  Alpine
Air Express, Inc.   Date: 1/26/2008
                 By:
/s/Eugene Mallette Eugene
Mallette, Chief Executive Officer and Director   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: 1/26/2008
                    /s/Eugene
Mallette Eugene
Mallette, Chief Executive Officer and Director   Date: 1/26/2008
                    /s/Don
T. Squire Jr. Don
T. Squire Jr., Chief Financial Officer   Date: 1/26/2008
                    /s/Max
A. Hansen Max
A. Hansen, Secretary/Treasurer and Director   Date: 1/26/2008
                     /s/Joseph
O. Etchart Joseph
O. Etchart, Chairman   Date: 1/26/2008
                     /s/Kenneth
D. Holliday Kenneth
D. Holliday, Director   Date: 1/26/2008
                     /s/Michael
Brown Michael
Brown, Director   Date: 1/26/2008
                     /s/Ronald
L. Pattison Ronald
L. Pattison, Director