SCHEDULE 14A
                                 (RULE 14A-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION
           PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                   EXCHANGE ACT OF 1934 (AMENDMENT NO. _____)

Filed by the Registrant |X| 
Filed by a Party other than the Registrant |_| 
Check the appropriate box:
      |_|  Preliminary Proxy Statement        |_|  Confidential, For Use of the
      |X|  Definitive Proxy Statement              Commission Only (as permitted
      |_|  Definitive Additional Materials         by Rule 14a-6(e)(2)
      |_|  Soliciting Material Pursuant to
           ss.240.14a-12


                            PEOPLE'S LIBERATION, INC.
--------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X]  No fee required.
[_]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1)   Title of each class of securities to which transaction applies:

________________________________________________________________________________
2)   Aggregate number of securities to which transaction applies:

________________________________________________________________________________

3)   Per unit price or other underlying value of transaction  computed  pursuant
     to Exchange  Act Rule 0-11 (set forth the amount on which the filing fee is
     calculated and state how it was determined):

________________________________________________________________________________
4)   Proposed maximum aggregate value of transaction:

________________________________________________________________________________
5)   Total fee paid:

________________________________________________________________________________
[_]  Fee paid previously with preliminary materials:

________________________________________________________________________________
[_]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the form or schedule and the date of its filing.

     1)   Amount previously paid:

________________________________________________________________________________
     2)   Form, Schedule or Registration Statement No.:

________________________________________________________________________________
     3)   Filing Party:

________________________________________________________________________________
     4)   Date Filed:

________________________________________________________________________________



<PAGE>


                            PEOPLE'S LIBERATION, INC.

              -----------------------------------------------------


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
              -----------------------------------------------------




TIME....................................          9:00  a.m.   Pacific  Time  on
                                                  Wednesday, June 21, 2006


PLACE...................................          Sheraton Los Angeles Downtown,
                                                  711 Hope Street, Los Angeles, 
                                                  CA 90017


ITEMS OF BUSINESS.......................          (1)  To elect three members of
                                                       the Board of Directors.

                                                  (2)  To  transact  such  other
                                                       business as may  properly
                                                       come  before the  Meeting
                                                       and  any  adjournment  or
                                                       postponement.

RECORD DATE.............................          You can  vote if at the  close
                                                  of business on April 25, 2006,
                                                  you were a stockholder  of the
                                                  Company.

PROXY VOTING............................          All stockholders are cordially
                                                  invited  to attend  the Annual
                                                  Meeting in person. However, to
                                                  ensure your  representation at
                                                  the  Annual  Meeting,  you are
                                                  urged  to  vote   promptly  by
                                                  signing  and   returning   the
                                                  enclosed Proxy card.



M
ay 10, 2006 
                                        /s/ Daniel S. Guez
                                        --------------------------------------
                                        DANIEL S. GUEZ, CHAIRMAN OF THE BOARD,
                                        CHIEF EXECUTIVE OFFICER AND PRESIDENT



<PAGE>


                                                       PEOPLE'S LIBERATION, INC.
                                                    150 WEST JEFFERSON BOULEVARD
                                                           LOS ANGELES, CA 90007
                                                                  (213) 745-2123
PROXY STATEMENT
--------------------------------------------------------------------------------


         These Proxy materials are delivered in connection with the solicitation
by the Board of Directors of People's  Liberation,  Inc., a Delaware corporation
("People's Liberation", the "Company", "we", or "us"), of Proxies to be voted at
our  2006  Annual  Meeting  of   Stockholders   and  at  any   adjournments   or
postponements.

         You are  invited  to attend  our  Annual  Meeting  of  Stockholders  on
Wednesday,  June 21, 2006, beginning at 9:00 a.m. Pacific Time. The meeting will
be held at Sheraton  Los Angeles  Downtown,  711 Hope Street,  Los  Angeles,  CA
90017.

         It is anticipated  that the 2005 Annual Report and this Proxy Statement
and the  accompanying  Proxy will be mailed to  stockholders on or about May 24,
2006.

         STOCKHOLDERS ENTITLED TO VOTE. Holders of our common stock at the close
of business on April 25,  2006 are  entitled to receive  this notice and to vote
their shares at the Annual Meeting.  As of April 25, 2006, there were 34,371,134
shares of common stock outstanding, our only class of voting securities.

         PROXIES. Your vote is important.  If your shares are registered in your
name,  you are a stockholder  of record.  If your shares are in the name of your
broker or bank, your shares are held in street name. We encourage you to vote by
Proxy so that your shares will be  represented  and voted at the meeting even if
you cannot  attend.  All  stockholders  can vote by  written  Proxy  card.  Your
submission of the enclosed Proxy will not limit your right to vote at the Annual
Meeting  if you later  decide to attend in  person.  IF YOUR  SHARES ARE HELD IN
STREET NAME, YOU MUST OBTAIN A PROXY, EXECUTED IN YOUR FAVOR, FROM THE HOLDER OF
RECORD IN ORDER TO BE ABLE TO VOTE AT THE MEETING.  If you are a stockholder  of
record,  you may revoke  your Proxy at any time  before  the  meeting  either by
filing with the Secretary of the Company,  at its principal executive offices, a
written  notice of revocation or a duly executed  Proxy bearing a later date, or
by attending the Annual  Meeting and  expressing a desire to vote your shares in
person. All shares entitled to vote and represented by properly executed Proxies
received  prior to the Annual  Meeting,  and not  revoked,  will be voted at the
Annual Meeting in accordance with the  instructions  indicated on those Proxies.
If no  instructions  are  indicated  on a properly  executed  Proxy,  the shares
represented  by  that  Proxy  will be  voted  as  recommended  by the  Board  of
Directors.

         QUORUM. The presence, in person or by Proxy, of a majority of the votes
entitled to be cast by the  stockholders  entitled to vote at the Annual Meeting
is necessary to constitute a quorum.  Abstentions  and broker  non-votes will be
included in the number of shares present at the Annual  Meeting for  determining
the presence of a quorum.  Broker non-votes occur when a broker holding customer
securities in street name has not received voting instructions from the customer
on certain  non-routine  matters and,  therefore,  is barred by the rules of the
applicable securities exchange from exercising  discretionary  authority to vote
those securities.

         VOTING.  Each share of our common stock is entitled to one vote on each
matter properly  brought before the meeting.  Abstentions will be counted toward
the  tabulation of votes cast on proposals  submitted to  stockholders  and will
have the same effect as  negative  votes,  while  broker  non-votes  will not be
counted as votes cast for or against such matters.

         ELECTION  OF  DIRECTORS.  Our  Certificate  of  Incorporation  does not
authorize cumulative voting. In the election of directors,  the three candidates
receiving the highest number of votes at the Annual Meeting will be elected.  If
any  nominee is unable or  unwilling  to serve as a director  at the time of the
Annual Meeting,  the Proxies will be voted for such other nominee(s) as shall be
designated  by the current  Board of Directors  to fill any vacancy.  We have no
reason to  believe  that any  nominee  will be unable or  unwilling  to serve if
elected as a director.

         OTHER MATTERS.  At the date this Proxy  Statement went to press,  we do
not know of any other matter to be raised at the Annual Meeting.


                                       1

<PAGE>


         In the event a  stockholder  proposal was not  submitted to us prior to
the date of this Proxy  Statement,  the enclosed Proxy will confer  authority on
the  Proxyholders  to vote the shares in accordance with their best judgment and
discretion  if the proposal is presented at the Meeting.  As of the date hereof,
no stockholder proposal has been submitted to us, and management is not aware of
any other  matters to be presented  for action at the Meeting.  However,  if any
other matters  properly come before the Meeting,  the Proxies  solicited  hereby
will be voted by the Proxyholders in accordance with the  recommendations of the
Board  of  Directors.   Such  authorization  includes  authority  to  appoint  a
substitute  nominee for any Board of Directors'  nominee identified herein where
death,  illness or other  circumstance  arises which  prevents such nominee from
serving in such position and to vote such Proxy for such substitute nominee.


                                       2

<PAGE>



ITEM 1:  ELECTION OF DIRECTORS
--------------------------------------------------------------------------------


         Item 1 is the  election  of three (3)  directors  to hold  office for a
period of one year or until their  respective  successors have been duly elected
and  qualified.  Our  Certificate of  Incorporation  provides that the number of
directors  of the Company  shall be fixed from time to time  exclusively  by the
Board of  Directors,  but shall  not be less than two (2) nor more than  fifteen
(15). The Board of Directors has fixed the number of directors at three (3).

         Unless  otherwise  instructed,  the Proxy holders will vote the Proxies
received by them for the nominees  named  below.  If any nominee is unwilling to
serve as a director at the time of the Annual Meeting, the Proxies will be voted
for such other  nominee(s)  as shall be  designated by the then current Board of
Directors  to fill any  vacancy.  We have no reason to believe  that any nominee
will be unable or unwilling to serve if elected as a director.

         The Board of Directors  proposes the election of the following nominees
as directors:

                               Daniel S. Guez
                               Dean Oakey
                               Kevin Keating

        If elected, the foregoing three nominees are expected to serve until the
2007 Annual Meeting of Stockholders.

T
HE BOARD OF DIRECTORS  UNANIMOUSLY  RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES LISTED ABOVE.

         The  principal  occupation  and  certain  other  information  about the
nominees and certain executive officers are set forth on the following pages.


                                       3

<PAGE>


CURRENT DIRECTORS/DIRECTOR NOMINEES

         The  following  table sets forth the name,  age and position of each of
our directors as of May 3, 2006.

        NAME                   AGE       POSITION HELD
        ----                   ---       -------------

        Daniel Guez            29        Chief Executive Officer, President, 
                                            Secretary and Chairman of the Board 
                                            of Directors
        Dean Oakey             48        Director
        Kevin R. Keating       66        Director

         DANIEL  GUEZ,  the founder of Versatile  Entertainment,  Inc. and Bella
Rose, LLC, our wholly-owned  subsidiaries,  became our Chief Executive  Officer,
President  and  Secretary  and a director on  November  22,  2005.  Mr. Guez was
appointed Chairman of the Board of Directors on February 28, 2006. Mr. Guez also
serves as  President of  Versatile  Entertainment,  Inc., a position he has held
since  April 2001,  and manager of Bella Rose,  a position he has held since May
2005. Both Versatile  Entertainment,  Inc. and Bella Rose, LLC are  wholly-owned
subsidiaries of People's  Liberation, Inc.  Prior to July 2004, Mr. Guez managed
several  private  label  divisions of Innovo Group,  Inc. and Azteca  Production
International,  Inc., Los Angeles based manufacturers of denim apparel. Mr. Guez
started his career in the apparel industry in 1995.

         DEAN OAKEY has served as a director since November 22, 2005.  From June
1997 to present,  Mr.  Oakey has served as the  Managing  Director of  Corporate
Finance  and Capital  Markets at Sanders  Morris  Harris,  Inc.,  an  investment
banking  firm. In this  capacity,  Mr. Oakey has been  responsible  for business
development and management duties, with a focus on the apparel industry.

         KEVIN R. KEATING has served as a director  since  February 4, 2005, and
served as our former President, Secretary and Treasurer from February 4, 2005 to
November 22, 2005. Mr. Keating is an investment  executive and for the past nine
years  has  been the  Branch  Manager  of the Vero  Beach,  Florida,  office  of
Brookstreet  Securities  Corporation.  Brookstreet is a  full-service,  national
network of  independent  investment  professionals.  Mr.  Keating  services  the
investment needs of private clients with special emphasis on equities.  For more
than 35  years,  he has  been  engaged  in  various  aspects  of the  investment
brokerage  business.  Mr.  Keating  began his Wall Street  career with the First
Boston  Company in New York in 1965.  From 1967 through 1974, he was employed by
several  institutional  research boutiques where he functioned as Vice President
Institutional  Equity Sales. From 1974 until 1982, Mr. Keating was the President
and Chief Executive Officer of Douglas Stewart,  Inc., a New York Stock Exchange
member firm.  Since 1982,  he has been  associated  with a variety of firms as a
registered  representative  servicing  the needs of  individual  investors.  Mr.
Keating is also the manager and sole member of Vero Management, LLC, which had a
management  agreement with us that terminated effective as of the closing of the
exchange agreement on November 22, 2005.

OTHER EXECUTIVE OFFICERS

         DARRYN  BARBER  has  served as our Chief  Financial  Officer  and Chief
Operating Officer since November 22, 2005. Prior to joining us, Mr. Barber spent
five years as a senior  associate  at  Europlay  Capital  Advisors,  LLC and its
affiliates.  Mr.  Barber has been  successful  in  evaluating,  developing,  and
operating  businesses in the entertainment and technology fields. Mr. Barber has
been responsible for preparing business models,  financial planning,  evaluating
and valuing  businesses,  providing corporate and strategic advice and preparing
businesses  for  strategic  transactions.   Mr.  Barber  brings  over  10  years
experience  in  owning  and  operating  businesses.  Prior to  Europlay  Capital
Advisors,  Mr.  Barber was  Director of  Operations  of Trademark  Cosmetics,  a
private  label  cosmetic  manufacturing  company.  Mr. Barber earned an MBA from
California  State  University  Northridge  and a BA in business  economics  from
University of California Santa Barbara. Mr. Barber is 30 years old.

FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS

         MEETINGS AND COMMITTEES. The Board of Directors held one meeting during
fiscal 2005, which was attended by all members of the Board of Directors.  While
directors  generally  attend annual  stockholder  meetings,  the Company has not
established a specific  policy with respect to members of the Board of Directors
attending annual stockholder meetings.


                                       4

<PAGE>


         Currently, we do not have any committees, including an audit committee,
compensation  committee,  or nominating and corporate governance  committee.  In
addition, we do not have any charters that relate to the functions traditionally
performed by these committees.

         The functions  customarily  delegated to the  nominating  committee are
performed by our full board of  directors.  Our full board of directors  reviews
those  Board  members  who  are  candidates  for  re-election  to our  Board  of
Directors,  and makes the determination to nominate a candidate who is a current
member of the Board of Directors for  re-election for the next term. The Board's
methods for identifying candidates for election to the Board of Directors (other
than those  proposed  by our  stockholders,  as  discussed  below)  include  the
solicitation of ideas for possible  candidates from a number of sources--members
of the Board of Directors;  our executives;  individuals personally known to the
members of the Board of Directors;  and other research. We may also from time to
time  retain  one  or  more  third-party   search  firms  to  identify  suitable
candidates.  The Board also  nominates  outside  candidates for inclusion on the
Board of Directors.

         A People's Liberation  stockholder may nominate one or more persons for
election as a director at an annual meeting of  stockholders  if the stockholder
complies with the notice,  information and consent  provisions  contained in our
Bylaws. In addition, the notice must be made in writing and set forth as to each
proposed nominee who is not an incumbent  Director (i) their name, age, business
address and, if known,  residence  address,  (ii) their principal  occupation or
employment,  (iii) the  number of  shares of stock of the  Company  beneficially
owned  and (iv) any  other  information  concerning  the  nominee  that  must be
disclosed  respecting nominees in proxy solicitations  pursuant to Rule 14(a) of
the  Exchange  Act of  1934.  The  recommendation  should  be  addressed  to our
Secretary.

        Among other  matters,  our full board of  directors  which serves as the
nominating and governance committee:

         o        Reviews  the  desired  experience,  mix of  skills  and  other
                  qualities to assure appropriate Board composition, taking into
                  account the current  Board  members and the specific  needs of
                  People's Liberation and the Board;

         o        Conducts candidate searches, interviews prospective candidates
                  and  conducts   programs  to  introduce   candidates   to  our
                  management and operations,  and confirms the appropriate level
                  of interest of such candidates;

         o        Recommends  qualified  candidates  who bring  the  background,
                  knowledge, experience,  independence, skill sets and expertise
                  that would strengthen and increase the diversity of the Board;
                  and

         o        Conducts   appropriate   inquiries  into  the  background  and
                  qualifications of potential nominees.

         Based on the  foregoing,  the Board  recommends  for nomination and the
Board of Directors  nominated,  Daniel Guez,  Dean Oakey,  and Kevin Keating for
re-election  as  directors  on the Board of  Directors,  subject to  stockholder
approval,  for a one-year  term  ending on or around the date of the 2007 Annual
Meeting of Stockholders.

         COMPENSATION OF DIRECTORS.  We are currently  revising our compensation
plan and intend to pay outside directors a fee and issue stock options for being
a board  member as well as fees for chairing  and sitting on  committees  of the
board, when such committees are established.

         COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION.   Our
Compensation  Committee  consists of our entire Board of  Directors.  No current
executive  officer  of the  Company  has  served  as a  member  of the  board of
directors  or  compensation  committee  of any  entity for which a member of our
Board of Directors has served as an executive officer.

         STOCKHOLDER  COMMUNICATIONS.  Holders of the Company's  securities  can
send communications to the Board of Directors via email to  board@peopleslib.com
or by telephoning the Secretary at the Company's  principal  executive  offices,
who will then relay the communications to the Board of Directors.

         CODE OF  ETHICS.  We have  adopted a Code of  Ethical  Conduct  that is
applicable  to all of our  officers,  directors  and  employees,  including  our
principal executive officer,  principal financial officer,  principal accounting
officer and persons performing similar functions.  A copy of our Code of Ethical
Conduct is filed as an exhibit to our 2005 Annual Report on Form 10-KSB.


                                       5

<PAGE>



EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

      The following  table sets forth  information  concerning all  compensation
paid to our Chief  Executive  Officer for services to us in all  capacities  for
each of the three  fiscal  years ended  December 31  indicated  below.  No other
officer  was  paid  more  than  $100,000   during  the  last  fiscal  year.  The
compensation  table excludes other  compensation  in the form of perquisites and
other  personal  benefits  that  constituted  less than 10% of the total  annual
salary and bonus for the executive officer during the applicable fiscal year.


<TABLE>
<CAPTION>
                                                                                           LONG-TERM
                                                                                         COMPENSATION
                                                             ANNUAL COMPENSATION            AWARDS
                                                   ------------------------------------   -----------
NAME AND                                                                                   NUMBER OF
                                    FISCAL YEAR                                           SECURITIES
NAME AND                               ENDED                               OTHER ANNUAL   UNDERLYING
PRINCIPAL POSITION                  DECEMBER 31,    SALARY      BONUS      COMPENSATION    OPTIONS
                                    ------------   --------    --------   -------------   -----------
<S>         <C>                         <C>        <C>         <C>            <C>             <S>
Daniel Guez (1)................         2005       $151,202    $155,929       $15,006         N/A
   Chief Executive Officer,             2004        $62,308      N/A          $52,836         N/A
   President and Secretary              2003          --          --            --            N/A

Kevin R. Keating (2) .........          2005          $0          $0          $5,000          N/A
   Former President,                    2004          N/A        N/A            N/A           N/A
   Treasurer and Secretary              2003          N/A        N/A            N/A           N/A

David Hadley (3) .............          2005        $16,848       $0            N/A           N/A
   Former Chief Executive               2004        $60,000       $0          $20,500         N/A
   Officer and President                2003        $60,000       $0          $20,500         N/A
</TABLE>


----------
     (1) Mr.  Guez  commenced  his  service  as Chief  Executive  Officer of our
         company on November  22,  2005.  The amounts in the table also  reflect
         compensation  paid  to Mr.  Guez  as  Chief  Executive  Officer  of our
         subsidiary, Versatile Entertainment, Inc. prior to November 22, 2005.

     (2) Mr.  Keating  served as our  President,  Treasurer and  Secretary  from
         February 4, 2005 to November 22, 2005.  On June 28, 2005, we issued Mr.
         Keating 54,054 shares of our common stock in consideration for services
         rendered by him, valued at $5,000.

     (3) Mr. Hadley served as our Chairman of the Board, Chief Executive Officer
         and President  until  February 4, 2005. Mr. Hadley has no stock options
         to purchase shares of common stock and was paid no compensation for his
         services as Chief Executive  Officer and President.  As Chief Executive
         Officer and  President of our former  wholly-owned  subsidiary,  Global
         Medical  Technologies,  Inc.,  Mr.  Hadley was paid an annual salary of
         $60,000  together with an annual bonus as set forth above in connection
         with his services to Global Medical Technologies,  Inc. On December 15,
         2004,  we issued Mr.  Hadley  2,470,000  restricted  common shares on a
         pre-reverse  stock  split basis in exchange  for  $125,000  accumulated
         unpaid salary.

OPTION GRANTS IN 2005

      We did not grant options to purchase common stock during 2005.

OPTION VALUES AT DECEMBER 31, 2005

         None  of the  executive  officers  named  in the  summary  table  above
exercised options during 2005.

EMPLOYMENT AND SEVERANCE AGREEMENTS

         Except  as  described  below,  we are  not  parties  to any  employment
agreements with any of our executive officers.

         On January 3, 2006, we entered into an Employment Agreement with Darryn
Barber  pursuant  to which he serves as our Chief  Financial  Officer  and Chief
Operating Officer. The agreement is for a term of 2 years


                                       6

<PAGE>


commencing as of November 22, 2005 and terminating on November 21, 2007. For the
six month period  commencing  on November 22, 2005,  Mr. Barber was permitted to
perform transition  services for other entities up to approximately one business
day per week and Mr. Barber  received an annual  salary of $172,000  during this
initial six month  period.  Mr.  Barber is currently  receiving a base salary of
$212,000  up to the  first  anniversary  of his  appointment,  and will  receive
$232,000 during the second year of his contract. In addition to his base salary,
Mr.  Barber will  receive an annual  bonus of not less than  $25,000 and no more
than  $100,000  based on objectives  determined  by our Board of Directors.  Mr.
Barber  will also be granted a  non-qualified  stock  option to  purchase  up to
300,000  shares of our  common  stock at an  exercise  price  equal to the "fair
market  value" of such shares on the date the option is approved by our Board of
Directors.  In the  event Mr.  Barber  is  terminated  without  cause,  we shall
continue to pay Mr.  Barber's then current base salary for the remaining term of
the agreement, without regard to any employment of Mr. Barber by a third party.

EMPLOYEE BENEFIT PLANS

         Our 2005 Stock  Incentive  Plan was  adopted on  November  23, 2005 and
became effective on January 5, 2006. A total of 3,500,000 shares of common stock
have been reserved for issuance  upon exercise of awards  granted under the 2005
Stock Incentive Plan. Any shares of common stock subject to an award,  which for
any reason expires or terminates  unexercised,  are again available for issuance
under the 2005 Stock Incentive Plan.

         Our 2005 Stock  Incentive Plan will  terminate  after 10 years from the
date on which our board  approved the plan,  unless it is terminated  earlier by
our board.  The plan  authorizes  the award of stock options and stock  purchase
grants.

         Our 2005  Stock  Incentive  Plan is  administered  by our full board of
directors.  To the extent we expand our board of directors,  we intend to form a
compensation  committee,  all  of the  members  of  which  will  be  independent
directors under  applicable  federal  securities  laws and outside  directors as
defined  under  applicable  federal  tax  laws.  Following  its  formation,  the
compensation  committee  will have the  authority to construe and  interpret the
plan, grant awards and make all other determinations  necessary or advisable for
the administration of the plan.

         Our 2005 Stock  Incentive Plan provides for the grant of both incentive
stock options that qualify  under  Section 422 of the Internal  Revenue Code and
nonqualified  stock  options.  Incentive  stock  options may be granted  only to
employees  of ours or any parent or  subsidiary  of ours.  All awards other than
incentive  stock options may be granted to our employees,  officers,  directors,
consultants,  independent  contractors  and  advisors  of ours or any  parent or
subsidiary  of ours.  The exercise  price of incentive  stock options must be at
least equal to the fair market  value of our common  stock on the date of grant.
The exercise price of incentive stock options granted to 10%  stockholders  must
be at least  equal to 110% of that value.  The  exercise  price of  nonqualified
stock options will be determined by our compensation  committee when the options
are granted.

         In  general,  options  will vest over a four-year  period.  The term of
options granted under our 2005 Stock Incentive Plan may not exceed 10 years.

         Awards  granted  under  our  2005  Stock  Incentive  Plan  may  not  be
transferred  in any  manner  other  than by will or by the laws of  descent  and
distribution or as determined by our  compensation  committee.  Unless otherwise
restricted  by our  compensation  committee,  nonqualified  stock options may be
exercised  during  the  lifetime  of the  optionee  only  by the  optionee,  the
optionee's  guardian or legal  representative or a family member of the optionee
who has acquired the option by a permitted transfer. Incentive stock options may
be exercised  during the  lifetime of the  optionee  only by the optionee or the
optionee's  guardian or legal  representative.  Options  granted  under our 2005
Stock  Incentive  Plan  generally  may be exercised for a period of three months
after  the  termination  of the  optionee's  service  with us or any  parent  or
subsidiary  of  ours.   Options  will  generally   terminate   immediately  upon
termination of employment for cause.

         The purchase price for restricted stock will be determined by our board
of directors or  compensation  committee,  as applicable,  at the time of grant.
Stock  bonuses  may be  issued  for past  services  or may be  awarded  upon the
completion of services or performance goals.

         If we are  subject to a sale,  merger,  consolidation,  reorganization,
liquidation or change in control,  our Board of Directors may take actions which
include  (but shall not be limited  to)  establishing,  amending  or waiving the
type,  terms,  conditions  or duration  of, or  restrictions  on rights so as to
provide for earlier, later, extended or


                                       7

<PAGE>


additional time for exercise and other modifications.  In addition, the Board of
Directors  may take such actions with  respect to all  participants,  to certain
categories  of  participants  or only to  individual  participants  in the plan.
Moreover,  the Board of Directors may take such action before or after  granting
rights to which the action  relates and before or after any public  announcement
with respect to such sale, merger, consolidation, reorganization, liquidation or
change in control that is the reason for such action.

REPORT OF BOARD OF DIRECTORS ON AUDIT COMMITTEE FUNCTIONS

         We do not have an Audit  Committee.  For the fiscal year ended December
31, 2005, the Company's  Board of Directors has performed the duties of an Audit
Committee and is responsible for providing  objective oversight of the Company's
internal controls and financial reporting process.

         In fulfilling  its  responsibilities  for the financial  statements for
fiscal year 2005, the Board of Directors:

         o        Reviewed and discussed the audited  financial  statements  for
                  the  year  ended   December  31,  2005  with   management  and
                  Grobstein,  Horwath  &  Company,  LLP  (the  "Auditors"),  the
                  Company's independent auditors; and

         o        Received written  disclosures and the letter from the Auditors
                  regarding  its   independence   as  required  by  Independence
                  Standards  Board Standard No. 1. The Board  discussed with the
                  Auditors their independence.

         In fulfilling  its  responsibilities  for the financial  statements for
fiscal year 2005, the Board of Directors discussed with the Auditors the matters
required to be discussed by Statement on Auditing  Standards  No. 61 relating to
the conduct of the audit.

         Based on the  Board  of  Directors'  review  of the  audited  financial
statements  and  discussions  with  management  and the  Auditors,  the Board of
Directors  approved the  inclusion of the audited  financial  statements  in the
Corporation's  Annual Report on Form 10-KSB for the year ended December 31, 2005
for filing with the SEC.

         The Board of Directors also considered the status of pending litigation
and other areas of  oversight  relating  to the  financial  reporting  and audit
process that the Board determined appropriate.

         The  Board  of  Directors  has  considered  whether  the  provision  of
non-audit  services is compatible with  maintaining  the principal  accountant's
independence.

                                            BOARD OF DIRECTORS

                                            Daniel Guez
                                            Dean Oakey
                                            Kevin Keating

         The  information  in this  Report  of Board of  Directors  shall not be
deemed to be  "soliciting  material," or to be "filed" with the  Securities  and
Exchange  Commission or to be subject to Regulation 14A or 14C as promulgated by
the Securities and Exchange  Commission,  or to the liabilities of Section 18 of
the Exchange Act.

I
NDEPENDENT PUBLIC ACCOUNTANTS

         Effective  as of November  30, 2005,  we engaged  Grobstein,  Horwath &
Company LLP as our principal independent  accounting firm. Prior to November 30,
2005,  Grobstein,  Horwath  &  Company  LLP  acted  as the  accountant  for  our
wholly-owned subsidiaries Versatile Entertainment, Inc. and Bella Rose, LLC. The
appointment  of Grobstein,  Horwath & Co. was approved by the unanimous  written
consent of our Board of  Directors.  All audit work for the year ended  December
31,  2005 was  performed  by the full time  employees  of  Grobstein,  Horwath &
Company LLP.  Representatives of Grobstein,  Horwath & Company, LLP are expected
to be present  at our Annual  Meeting  and will have the  opportunity  to make a
statement  if  they  desire  to do  so.  In  addition,  at the  Annual  Meeting,
Grobstein,  Horwath & Company,  LLP is  expected to be  available  to respond to
appropriate questions posed by our stockholders.


                                       8

<PAGE>


         Also   effective  as  of  November  30,  2005,  we  dismissed   Shelley
International CPA ("Shelley  International") as our independent certified public
accountants. The decision was approved by our Board of Directors. The reports of
Shelley  International  on our financial  statements  for the fiscal years ended
September 30, 2005 and 2004 did not contain an adverse  opinion or disclaimer of
opinion and were not  modified as to  uncertainty,  audit scope,  or  accounting
principles,  except the 2005 report did contain an explanatory paragraph related
to our  ability to continue as a going  concern.  During our fiscal  years ended
September 30, 2005 and 2004,  and through  November 30, 2005 (the effective date
of Shelley International's dismissal),  there were no disagreements with Shelley
International  on any matter of accounting  principles  or practices,  financial
statement disclosure,  or auditing scope or procedure,  which disagreements,  if
not  resolved to the  satisfaction  of Shelley  International  would have caused
Shelley   International   to  make  reference  to  the  subject  matter  of  the
disagreements in connection with its reports. We furnished Shelley International
with a copy of our report on Form 8-K/A  prior to our filing the report with the
Securities  and Exchange  Commission on December 9, 2005. We also requested that
Shelley  International  furnish us with a letter addressed to the Securities and
Exchange  Commission stating whether or not it agreed with our statements in the
8-K/A. A copy of the letter  furnished by Shelley  International  in response to
that request,  dated December 8, 2005, is filed as Exhibit 16.1 to our report on
Form 8-K/A.

     AUDIT FEES

         Fees for audit  services  provided  by  Grobstein,  Horwath & Co.,  LLP
totaled  approximately  $74,000 for the year ended December 31, 2005,  including
fees  associated  with the December 31, 2004 and 2003 audits,  and the review of
our nine-month period ended September 30, 2005.

         Fees for audit services provided by Shelley International,  CPA totaled
approximately  $12,000 and $36,250 for the fiscal years ended September 30, 2005
and 2004.

     AUDIT-RELATED FEES

         There  were no  audit-related  services  provided  for the years  ended
December 31, 2005 and 2004.

     TAX FEES

         There were no tax services  provided  for the years ended  December 31,
2005 and 2004.

     ALL OTHER FEES

         No other fees were  incurred  during the years ended  December 31, 2005
and 2004 for  services  provided  by  Grobstein,  Horwath & Co.,  LLP or Shelley
International, CPA, except as described above.

POLICY  ON  PRE-APPROVAL  OF  AUDIT  AND  PERMISSIBLE   NON-AUDIT   SERVICES  OF
INDEPENDENT AUDITORS

         Consistent  with  policies of the  Securities  and Exchange  Commission
regarding auditor  independence,  our Board of Directors has  responsibility for
appointing,  setting  compensation  and overseeing  the work of the  independent
auditor.  In  recognition  of this  responsibility,  our Board of Directors  has
established a policy to pre-approve all audit and permissible non-audit services
provided by the  independent  auditor.  Our Board of  Directors  has  considered
whether the provision of non-audit  services is compatible with  maintaining the
independent accountant's independence, and has approved any such services.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       Other than the  employment  arrangements  described  above in  "Executive
Compensation" and the transactions described below, since January 1, 2004, there
has not been,  nor is there  currently  proposed,  any  transaction or series of
similar transactions to which we were or will be a party:

         o        in which the amount involved exceeds $60,000; and

         o        in which any  director,  executive  officer,  stockholder  who
                  beneficially owns 5% or more of our common stock or any member
                  of  their  immediate  family  had or  will  have a  direct  or
                  indirect material interest.


                                       9

<PAGE>


T
RANSACTIONS WITH OFFICERS AND DIRECTORS

         On February 16, 2004,  we entered  into a one-year  contract  with Vero
Management,  LLC for managerial and administrative services. Vero Management was
not engaged to provide, and Vero Management does not render, legal,  accounting,
auditing,  investment banking or capital formation services. Kevin R. Keating is
the manager of Vero Management.  In consideration of the services provided, Vero
was paid $1,000 for each month in which  services were  rendered.  The agreement
with Vero terminated on November 22, 2005.

         On August 30, 2004, we issued  1,000,000  shares of  restricted  common
stock in exchange  for a $85,000  note  payable to David L.  Hadley,  one of our
former officers.

         On December 15, 2004, we issued 2,470,000  restricted  common shares in
exchange for $125,000 accumulated unpaid salary to David L. Hadley.

         On January 31,  2005,  we entered  into an  Assumption  Agreement  with
Global Medical Technologies,  Inc., Natural  Technologies,  Inc. and Mr. Hadley,
our former Chief Executive Officer,  pursuant to which we contributed all of the
shares of common stock of our inactive  subsidiaries,  Century Pacific Financial
Corp. and Century Pacific Investment Management Corporation,  to Global Medical.
Global Medical agreed to assume all of our  liabilities  and to indemnify us for
any loss we incur with  respect to such  assumed  liabilities.  Global  Medical,
Natural  Technologies,  and Mr. Hadley also released us from all obligations and
claims.

         On February 16, 2005,  we received a  non-interest  bearing,  unsecured
demand loan from Keating Reverse Merger Fund in the amount of $50,000 to provide
working  capital for operating  expenses.  On June 28, 2005 we issued  5,000,000
restricted  common shares in full payment of the $50,000 note payable to Keating
Reverse  Merger  Fund.  We  granted   Keating   Reverse  Merger  Fund  piggyback
registration rights with respect to these shares.

         On June 28, 2005, we issued 500,000  restricted  common shares to Kevin
R.  Keating for  services  valued at $5,000.  We granted Mr.  Keating  piggyback
registration rights with respect to these shares.

         On November 22,  2005,  we entered  into a certain  financial  advisory
agreement with Keating Securities,  LLC under which Keating Securities,  LLC was
compensated by us for its advisory  services  rendered to us in connection  with
the closing of the exchange transaction with Versatile  Entertainment,  Inc. and
Bella Rose,  LLC. The  transaction  advisory fee was $350,000,  with the payment
thereof made at the closing of the exchange transaction.

         Kevin R.  Keating,  is the  father of the  principal  member of Keating
Investments,  LLC.  Keating  Investments,  LLC is the managing member of Keating
Reverse  Merger  Fund and is also the  managing  member and 90% owner of Keating
Securities, LLC, a registered broker-dealer.  Kevin R. Keating is not affiliated
with and has no equity  interest in Keating  Investments,  LLC,  Keating Reverse
Merger Fund or Keating Securities,  LLC and disclaims any beneficial interest in
the shares of our common stock owned by Keating Reverse Merger Fund.  Similarly,
Keating  Investments,  LLC, Keating Reverse Merger Fund and Keating  Securities,
LLC disclaim any beneficial interest in the shares of our common stock currently
owned by Kevin R. Keating.

         On November 23, 2005, we received gross proceeds of approximately  $7.8
million in a private  placement  transaction  with  institutional  investors and
other high net worth  individuals.  In  conjunction  with the private  placement
transaction,  we issued  warrants to purchase an aggregate of 625,000  shares of
common stock to Sanders  Morris  Harris,  Inc.,  the  placement  agent,  and its
employees Dean Oakey and Jonah Sulak.  Dean Oakey,  who received  262,500 of the
placement  agent  warrants,  became a director of the company upon completion of
the exchange transaction with Versatile Entertainment,  Inc. and Bella Rose, LLC
on  November  22,  2005.  The  warrants  are fully  vested  and have a per share
exercise  price of $1.25.  From June 1997 to the  present  date,  Mr.  Oakey has
served as the  Managing  Director of  Corporate  Finance and Capital  Markets at
Sanders Morris Harris, Inc.

         Paul Guez, Daniel Guez's father, loaned Versatile  Entertainment,  Inc.
$75,000  in May 2005  pursuant  to a note  payable  which was  unsecured,  bared
interest at 5% and was due on demand.  The note and accrued  interest was repaid
in November 2005.


                                       10

<PAGE>


TRANSACTIONS WITH 5% STOCKHOLDERS

         During 2004,  Tag-It  Pacific,  Inc. loaned an aggregate of $293,989 to
Versatile  Entertainment,  Inc., which loan was unsecured, and due on demand. On
May 16, 2005, the then  outstanding  balance of $300,000 due to Tag-It  Pacific,
Inc. was repaid with borrowings from an unrelated entity. On May 16, 2005, Colin
Dyne,  CEO of  Tag-It  Pacific,  Inc.,  assumed  Versatile's  obligation  to the
unrelated entity in exchange for the issuance of 45 shares of Versatile's common
stock.  After  giving  9.546  shares of his  Versatile  common  stock to various
parties,  the  remaining  35.454  shares of common  stock held by Mr.  Dyne were
exchanged for 775,294.3  shares of our series A convertible  preferred  stock on
November  22,  2005,  the closing of the  exchange  transaction  with  Versatile
Entertainment and Bella Rose.

         During the year ended  December 31, 2005,  we purchased  trim  products
from Tag-It Pacific,  Inc., a related entity,  amounting to $74,960.  During the
year ended  December 31, 2005,  we incurred  approximately  $35,000 for services
provided by an employee of Tag-it Pacific, Inc.


PRINCIPAL STOCKHOLDERS

         The following  table  presents  information  regarding  the  beneficial
ownership of our common stock as of May 10, 2006 by:

         o        each of our executive officers;

         o        each of our directors, who are also nominees;

         o        all of our directors and executive officers as a group; and

         o        each  stockholder  known by us to be the  beneficial  owner of
                  more than 5% of our common stock.

         Beneficial  ownership is determined in accordance with the rules of the
SEC  and  generally   includes  voting  or  investment  power  with  respect  to
securities.  Unless otherwise indicated below, to our knowledge, the persons and
entities  named in the table  have sole  voting and sole  investment  power with
respect to all shares  beneficially  owned,  subject to community  property laws
where applicable. Shares of our common stock subject to options from the Company
that are currently exercisable or exercisable within 60 days of May 10, 2006 are
deemed to be outstanding and to be beneficially  owned by the person holding the
options for the purpose of computing the percentage ownership of that person but
are not treated as  outstanding  for the  purpose of  computing  the  percentage
ownership of any other person.


                                       11

<PAGE>


         The information  presented in this table is based on 34,371,134  shares
of our common stock outstanding on May 10, 2006. Unless otherwise indicated, the
address  of  each  of the  executive  officers  and  directors  and  5% or  more
stockholders  named below is c/o People's  Liberation,  Inc., 150 West Jefferson
Boulevard, Los Angeles, CA 90007.

 
                                                                 PERCENTAGE OF
                                           NUMBER OF SHARES          SHARES 
NAME OF BENEFICIAL OWNER                  BENEFICIALLY OWNED       OUTSTANDING
---------------------------------------   ------------------      ------------

EXECUTIVE OFFICERS AND DIRECTORS:
Daniel S. Guez (1).....................          14,218,387            41.4
   Director, President and
      Chief Executive Officer 
      and Secretary
Darryn Barber (2)......................             125,060             *
   Chief Financial Officer and 
      Chief Operating Officer
Dean Oakey (3).........................             668,383            1.9
   Director
Kevin R. Keating (4)...................              54,055             *
   Director
Directors and officers as a 
   group (4 persons) (5)...............          15,065,885            43.8

5% STOCKHOLDERS:
Colin Dyne (6) ........................           8,231,560            23.9

----------
*    Less than 1%

(1)      Consists of 13,118,387 shares of common stock  beneficially held by Mr.
         Guez and  1,100,000  shares of common  stock  held by Daniel S. Guez as
         Custodian for Isabella Guez UTMA of CA.

(2)      Consists of 125,060 shares of common stock.

(3)      Consists  of  389,883  shares of common  stock,  warrants  to  purchase
         262,500  shares of common  stock at a strike  price of $1.25 per share,
         and  warrants to  purchase  16,000  shares of common  stock at a strike
         price of $2.00 per share.

(4)      Consists of 54,055 shares of common stock. Kevin R. Keating, a director
         of the  company,  is the  father of the  principal  member  of  Keating
         Investments,  LLC. Keating  Investments,  LLC is the managing member of
         KRM Fund, a selling  stockholder.  KRM also has the right to nominate a
         director of the company. Keating Investments,  LLC is also the managing
         member  and  90%  owner  of  Keating  Securities,   LLC,  a  registered
         broker-dealer.  Kevin  R.  Keating  is not  affiliated  with and has no
         equity  interest  in  Keating  Investments,  LLC,  KRM Fund or  Keating
         Securities,  LLC and disclaims any beneficial interest in the shares of
         our common  stock owned by KRM Fund.  Similarly,  Keating  Investments,
         LLC,  KRM Fund and Keating  Securities,  LLC  disclaim  any  beneficial
         interest in the shares of our common stock  currently owned by Kevin R.
         Keating.  Mr. Keating's address is 936A Beachland  Boulevard,  Suite 13
         Vero Beach, Florida 32963.

(5)      Consists of 14,787,385 shares of common stock, and warrants to purchase
         278,500 shares of common stock.

(6)      Consists of 8,231,560 shares of common stock.

CHANGE OF CONTROL

         On  October  28,  2005,  we entered  into an  Exchange  Agreement  with
Versatile Entertainment,  Inc., a California corporation ("Versatile"),  each of
the  stockholders of Versatile  ("Stockholders"),  Bella Rose, LLC, a California
limited  liability  company  ("Bella  Rose"),  each of the members of Bella Rose
("Members"),  and Keating Reverse Merger Fund, LLC ("KRM Fund").  The closing of
the transactions contemplated by the Exchange Agreement (the "Closing") occurred
on November  22,  2005.  At the  Closing,  pursuant to the terms of the Exchange
Agreement,  we acquired all of the outstanding equity interests of Versatile and
Bella Rose (the  "Interests")  from the Stockholders and Members  (collectively,
the  "Owners"),  and the Owners  contributed  all of their  Interests  to us. In
exchange,  the we  issued to the  Owners  2,460,106.34  shares  of our  Series A
Convertible  Preferred  Stock, par value $0.001 per share  ("Preferred  Stock"),
which  subsequently  converted  into  26,595,751  shares of our common  stock on


                                       12

<PAGE>


January 5, 2006 following a mandatory  conversion and 1-9.25 reverse stock split
of our common stock.  Following the exchange transaction,  each of Versatile and
Bella Rose became our wholly-owned  subsidiaries.  The exchange  transaction was
accounted for as a reverse  merger  (recapitalization)  with Versatile and Bella
Rose deemed to be the accounting acquirer, and us the legal acquirer.

         Immediately  following the  acquisition of Versatile and Bella Rose, we
received gross  proceeds of  approximately  $7.8 million in a private  placement
transaction with  institutional  investors and other high net worth individuals.
Pursuant to subscription  agreements entered into with these investors,  we sold
578,125.58  shares of our series A  convertible  preferred  stock at a price per
share of $13.5135,  which  subsequently  converted into 6,250,000  shares of our
common  stock  on a post  reverse  stock  split  basis.  We also  issued  to the
investors,  five-year  warrants to purchase an aggregate of 2,500,000  shares of
our  common  stock  with an  exercise  price of $2.00 per  share.  After  broker
commissions and expenses and accounting,  legal and other expenses,  we received
net proceeds of approximately $6.6 million in the capital raise. Following these
transactions,  the former  security  holders of Bella Rose and Versatile and the
investors in the financing owned 95.6%, and our stockholders  immediately  prior
to these  transactions now own  approximately  1,525,383 shares of common stock,
representing  4.4% of our  outstanding  common stock on an as converted and post
reverse stock split basis.


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities  Exchange Act of 1934 requires that our
executive officers and directors, and persons who own more than ten percent of a
registered class of our equity securities, file reports of ownership and changes
in ownership with the SEC. Executive  officers,  directors and  greater-than-ten
percent  stockholders  are  required by SEC  regulations  to furnish us with all
Section  16(a) forms they file.  Based solely on our review of the copies of the
forms received by us and written  representations from certain reporting persons
that they have complied with the relevant filing requirements,  we believe that,
during  the  year  ended  December  31,  2005,  all of our  executive  officers,
directors and greater-than-ten  percent  stockholders  complied with all Section
16(a) filing requirements.

S
TOCKHOLDER PROPOSALS

         Any  stockholder  who  intends to present a proposal at the 2007 Annual
Meeting of Stockholders for inclusion in the Company's Proxy Statement and Proxy
form relating to such Annual Meeting must submit such proposal to the Company at
its principal executive offices by January 12, 2007. In addition, in the event a
stockholder  proposal is not received by the Company by March 9, 2007, the Proxy
to be  solicited  by the Board of  Directors  for the 2007 Annual  Meeting  will
confer discretionary authority on the holders of the Proxy to vote the shares if
the proposal is presented at the 2007 Annual  Meeting  without any discussion of
the proposal in the Proxy Statement for such meeting.

         SEC rules and  regulations  provide  that if the date of the  Company's
2007 Annual  Meeting is  advanced or delayed  more than 30 days from the date of
the 2006 Annual Meeting,  stockholder  proposals  intended to be included in the
proxy  materials  for the 2007  Annual  Meeting  must be received by the Company
within a reasonable  time before the Company  begins to print and mail the proxy
materials for the 2007 Annual Meeting.  Upon  determination  by the Company that
the date of the 2007 Annual  Meeting will be advanced or delayed by more than 30
days from the date of the 2006 Annual  Meeting,  the Company will  disclose such
change in the earliest possible Quarterly Report on Form 10-Q.

SOLICITATION OF PROXIES

         It is expected that the  solicitation  of Proxies will be by mail.  The
cost of  solicitation  by management  will be borne by the Company.  The Company
will reimburse brokerage firms and other persons representing  beneficial owners
of shares for their reasonable disbursements in forwarding solicitation material
to such  beneficial  owners.  Proxies  may also be  solicited  by certain of our
directors and officers, without additional compensation,  personally or by mail,
telephone, telegram or otherwise.


                                       13

<PAGE>


ANNUAL REPORT ON FORM 10-KSB

         THE COMPANY'S  ANNUAL REPORT ON FORM 10-KSB,  WHICH HAS BEEN FILED WITH
THE  SECURITIES  AND EXCHANGE  COMMISSION  FOR THE YEAR ENDED DECEMBER 31, 2005,
WILL BE MADE AVAILABLE TO  STOCKHOLDERS  WITHOUT CHARGE UPON WRITTEN  REQUEST TO
PEOPLE'S LIBERATION, INC., 150 WEST JEFFERSON BOULEVARD, LOS ANGELES, CALIFORNIA
90007 ATTN: DARRYN BARBER.

                                   ON BEHALF OF THE BOARD OF DIRECTORS

                                   /s/ Daniel Guez
                                   ---------------------------------------------
                                   DANIEL GUEZ, CHAIRMAN OF THE BOARD, PRESIDENT
                                   AND CHIEF EXECUTIVE OFFICER

150 West Jefferson Boulevard
Los Angeles, CA 90007
May 10, 2006


                                       14

<PAGE>


                            PEOPLE'S LIBERATION, INC.
                    PROXY FOR ANNUAL MEETING OF STOCKHOLDERS

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

         The undersigned, a stockholder of PEOPLE'S LIBERATION, INC., a Delaware
corporation (the "Company"),  hereby nominates,  constitutes and appoints Daniel
Guez and Darryn Barber, or either one of them, as proxy of the undersigned, each
with full power of substitution,  to attend, vote and act for the undersigned at
the Annual Meeting of Stockholders of the Company,  to be held on June 21, 2006,
and any postponements or adjournments thereof, and in connection  therewith,  to
vote and represent all of the shares of the Company which the undersigned  would
be entitled to vote with the same effect as if the undersigned were present,  as
follows:

A VOTE FOR ALL PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS:

Proposal 1.    To elect the Board of Directors' three nominees as directors:

                  Daniel Guez        Dean Oakey       Kevin Keating


                  |_|      FOR ALL NOMINEES  LISTED  ABOVE  (except as marked to
                           the contrary below)
                  |_|      WITHHELD for all nominees listed above

         (INSTRUCTION: To withhold authority to vote for any individual nominee,
         write that nominee's name in the space below:)

         -----------------------------------------------------------------------

         The  undersigned  hereby  confer(s)  upon the  proxies and each of them
         discretionary  authority  with  respect to the election of directors in
         the event  that any of the above  nominees  is unable or  unwilling  to
         serve.

         The  undersigned  hereby  revokes any other proxy to vote at the Annual
Meeting,  and hereby  ratifies and confirms all that said attorneys and proxies,
and each of them, may lawfully do by virtue hereof.  With respect to matters not
known at the time of the  solicitation  hereof,  said proxies are  authorized to
vote in accordance with their best judgment.

         THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE  INSTRUCTIONS SET FORTH
ABOVE OR, TO THE EXTENT NO CONTRARY DIRECTION IS INDICATED, WILL BE TREATED AS A
GRANT OF AUTHORITY TO VOTE FOR ALL PROPOSALS. IF ANY OTHER BUSINESS IS PRESENTED
AT THE ANNUAL  MEETING,  THIS PROXY  CONFERS  AUTHORITY TO AND SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE PROXIES.

         The undersigned  acknowledges receipt of a copy of the Notice of Annual
Meeting and  accompanying  Proxy Statement  dated May 10, 2006,  relating to the
Annual Meeting.


                                    Dated:___________________________, 2006

                                    Signature:_____________________________

                                    Signature:_____________________________
                                              Signature(s) of Stockholder(s)
                                                (See Instructions Below)

                                    The  Signature(s)  hereon should  correspond
                                    exactly    with   the    name(s)    of   the
                                    Stockholder(s)   appearing   on  the   Share
                                    Certificate.  If stock is held jointly,  all
                                    joint owners  should  sign.  When signing as
                                    attorney, executor,  administrator,  trustee
                                    or guardian, please give full title as such.
                                    If signer is a corporation,  please sign the
                                    full  corporation  name,  and give  title of
                                    signing officer.

           |_| Please indicate by checking this box if you anticipate
                         attending the Annual Meeting.

                PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
              PROMPTLY USING THE ENCLOSED ENVELOPE OR FAX DIRECTLY
                       TO STALT, INC. AT (650) 321-7113.