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 by
  |_|   Definitive Additional Materials         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)(1)
                  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:

================================================================================
         (4)      Proposed maximum aggregate value of transaction:

================================================================================
         (5)      Total fee paid:

================================================================================
         |_|      Fee paid 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
                                                  Monday, June 18, 2007


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


ITEMS OF BUSINESS........................         (1)      To elect five 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 May 14,  2007,
                                                  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 28, 2007
                                          /S/ COLIN DYNE   
                                          ------------------------------------
                                          COLIN DYNE, CO-CHAIRMAN OF THE BOARD
                                          AND CHIEF EXECUTIVE OFFICER



<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  2007  Annual  Meeting  of   Stockholders   and  at  any   adjournments   or
postponements.

         You are invited to attend our Annual Meeting of Stockholders on Monday,
June 18, 2007,  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 2006 Annual Report and this Proxy Statement
and the  accompanying  Proxy will be mailed to  stockholders on or about June 4,
2007.

         STOCKHOLDERS ENTITLED TO VOTE. Holders of our common stock at the close
of  business on May 14,  2007 are  entitled  to receive  this notice and to vote
their shares at the Annual  Meeting.  As of May 14, 2007,  there were 34,942,563
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,  as amended,
does not authorize  cumulative  voting.  In the election of directors,  the four
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 five (5)  directors  to hold  office  for a
period of one year or until their  respective  successors have been duly elected
and  qualified.  Our Restated  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 five
(5).

         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
                                   Colin Dyne
                                   Dean Oakey
                                  Susan White
                                  Troy Carter

        If elected,  the foregoing five nominees are expected to serve until the
2008 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 and nominees as of May 28, 2007.

NAME                     AGE             POSITION HELD
----                     ---             -------------
Colin Dyne               44              Chief Executive Officer and Co-Chairman
                                           of the Board of Directors
Daniel Guez              30              Creative Director, Secretary and Co-
                                           Chairman of the Board of Directors
Dean Oakey               49              Director
Susan White              57              Director
Troy Carter              34              Director

         COLIN DYNE has served as our Chief Executive  Officer and Co-Chaiman of
the Board of Directors since May 21, 2007. Mr. Dyne is a significant stockholder
of People's  Liberation,  and has served as a  consultant  to the company  since
December 2005, advising on strategic sales initiatives.  Mr. Dyne also serves as
Vice Chairman of the Board of Directors of Tag-It  Pacific,  Inc.  (AMEX:  TAG),
owner of  Talon(TM)  zippers and a full  service  trim  management  supplier for
manufacturers of fashion apparel. Mr. Dyne founded Tag-It, Inc., a subsidiary of
Tag-It  Pacific,  in 1991.  Mr. Dyne served as Tag-It  Pacific's  President from
inception and as its Chief Executive Officer from 1997 to 2005.

         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. In July 2006 Mr.
Guez  resigned  as our  President,  and on May 21, 2007 he resigned as our Chief
Exective Officer. Mr. Guez currently serves as Creative Director and Co-Chairman
of the Board of  Directors  of People's  Liberation,  and Manager of our William
Rast(TM)   apparel  line.  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.  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.

         SUSAN WHITE has served as a director  since May 21, 2007. Ms. White has
served as Chief  Executive  Officer and President of Brand  Identity  Solutions,
LLC, a branding,  marketing and licensing  consulting  company,  since 1987. Ms.
White also is the CEO and  president  of  Whitespeed,  LLC, an internet  design,
branding and  marketing  company.  Ms. White serves on the Board of Directors of
Tag-It Pacific,  Inc. (AMEX: TAG), owner of Talon(TM) zippers and a full service
trim management  supplier for  manufacturers of fashion apparel.  Ms. White also
previously served as Director of Marketing and Advertising Worldwide for Warnaco
from November 1997 through August 1999.

         TROY CARTER has served as a director  since May 21, 2007. Mr. Carter is
the Founder,  Chairman and CEO of the urban talent  management and  full-service
film and  television  production  entity,  The  Coalition,  Inc. Mr.  Carter has
managed  and built  careers  for some of the  hottest  acts on the  urban  scene
including hip-hop artists Eve, Beanie Siegel,  and Fat Joe and hot newcomer acts
such  as Ya Boy.  Prior  to  establishing  The  Coalition,  Mr.  Carter  was the
co-founder of Erving Wonder,  a management firm purchased by Sanctuary Group UK,
the largest urban talent  manager in the world with clients  including  Beyonce,
Destiny's  Child,  Nelly,  Eve and D-12.  Mr.  Carter  began  his  entertainment
industry  career at Bad Boy Records  working for Sean "Diddy"  Combs and also at
Overbrook Entertainment, Will Smith's management/production company.


                                       4

<PAGE>


OTHER EXECUTIVE OFFICERS

         DARRYN BARBER has served as our Chief Financial  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 the  University  of California
Santa Barbara.

         EDWARD HOUSTON has served as our President  since July 20, 2006.  Prior
to joining us, Mr.  Houston was most  recently the Chief  Operating  Officer for
Rock & Republic,  a premium  denim  company  based in Los Angeles.  Prior to his
position at Rock & Republic,  Mr. Houston was the Chief Operating Officer of C&C
California and Dickies Girl, both California based apparel companies,  from 2003
through 2005 and held other  management  positions in the apparel  industry from
2000 to 2003.  Mr.  Houston has also served as a management  consultant for Moss
Adams, LLP from 1997 to 2000.

         THOMAS NIELDS has served as our Chief Operating  Officer since November
8, 2006.  Prior to joining  us, Mr.  Nields  held  various  positions  at Tag-It
Pacific,  Inc., a full service trim  management  supplier for  manufacturers  of
fashion apparel,  from November 1994 to October 2006.  These positions  included
Director  of  Global  Operations,  President  of  Talon,  Inc.  (a  wholly-owned
subsidiary of Tag-It Pacific, Inc.) and Vice President of Production. During his
employment with Tag-It, Mr. Nields was responsible for implementing and managing
production  facilities in eight  countries  including the U.S.,  Mexico and Hong
Kong.

FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS

         MEETINGS  AND  COMMITTEES.  The Board of  Directors  held six  meetings
during fiscal 2006.  All directors  then serving  attended 75% or more of all of
the meetings of the Board of Directors in fiscal 2006. 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.

         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.


                                       5

<PAGE>


        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 of Directors  nominated Daniel Guez,
Colin Dyne, Dean Oakey, Susan White and Troy Carter 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 2008 Annual Meeting of Stockholders.


         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 2006 Annual Report on Form 10-KSB.


EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table sets forth information  concerning all compensation
paid to persons serving as our Chief Executive Officer,  Chief Financial Officer
and  President  (our "Named  Executive  Officers")  during our fiscal year ended
December 31, 2006 for services rendered to us during such fiscal year.


<TABLE>
<CAPTION>
                                                              Option      All Other
   Name and Principal                                         Awards      Compensa-
        Position            Year     Salary       Bonus         (1)        tion (5)      Total
-----------------------     ----   ----------   ----------   ----------   ----------   ----------
<S>                         <C>    <C>          <C>          <C>          <C>          <C>       
Daniel Guez ...........     2006   $  300,000   $  175,000   $        0   $   22,182   $  497,182
   Founder and Creative
   Director (2)

Darryn Barber .........     2006   $  203,278   $   40,000   $   87,771   $        0   $  331,049
   Chief Financial
   Officer (3)

Edward Houston ........     2006   $  131,591   $   25,000   $  103,239   $    8,000   $  267,830
    President (4)
</TABLE>



(1)      Assumptions  relating  to the  estimated  fair  value of stock  options
         granted to Darryn  Barber,  which we are  accounting  for in accordance
         with SFAS  123(R)  are as  follows:  risk-free  interest  rate of 5.1%;
         expected  dividend  yield 0%;  expected  option life of 5.1 years;  and
         volatility of 60.3%.  Assumptions  relating to the estimated fair value
         of stock options granted to Edward Houston, which we are accounting for
         in accordance with SFAS 123(R) are as 


                                       6

<PAGE>


         follows:  risk-free interest rate of 5.0%;  expected dividend yield 0%;
         expected option life of 6.0 years; and volatility of 60.3%.  Please see
         Note  2 to our  financial  statements  for  further  discussion  of our
         assumptions  relating  to the  estimated  fair  value  of  these  stock
         options.

(2)      Mr. Guez became our President and Chief  Executive  Officer on November
         22, 2005 in connection with the consummation of an exchange transaction
         and our reverse mergers of Versatile Entertainment,  Inc., a California
         corporation,  and Bella  Rose,  LLC,  a  California  limited  liability
         company.  In July 2006,  Mr. Guez  resigned as President and on May 21,
         2007,  Mr.  Guez  resigned  as our Chief  Exective  Officer.  Mr.  Guez
         currently  serves as Creative  Director and Co-Chairman of the Board of
         Directors of People's  Liberation,  and Manager of our William Rast(TM)
         apparel line. Mr. Guez is subject to an employment  agreement the terms
         of which are described hereafter.

(3)      Mr. Barber became our Chief Financial Officer on November 22, 2005. Mr.
         Barber is subject  to an  employment  agreement  the terms of which are
         described  hereafter.  Mr.  Barber was  granted  an option to  purchase
         300,000 shares of our common stock at a per share price of $1.25, which
         option  terminates on July 7, 2016 and is now fully vested.  Mr. Barber
         is subject to an employment  agreement the terms of which are described
         hereafter.

(4)      Mr.  Houston  was named our  President  effective  July 20,  2006.  Mr.
         Houston is subject to an  employment  agreement  the terms of which are
         described  hereafter.  Mr.  Houston  was  granted an option to purchase
         1,000,000  shares of our  common  stock at a per share  price of $1.25,
         which option terminates on July 31, 2016. These options vest and become
         exercisable in quarterly installments of 83,333 shares each (other than
         in the last quarter, in which 83,337 shares shall vest), with the first
         installment  vesting on  October 1, 2006,  and on the first day of each
         fiscal quarter thereafter.

(5)      Other  compensation  indicated  in  the  above  table  consists  of car
         expenses and allowances.

NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE

         We compensate  our executive  officers  through a combination of a base
salary,  a cash bonus,  and options to purchase  shares of our common stock.  In
addition, we provide other perquisites to some of our executive officers,  which
primarily  consist of car  expenses  and  allowances.  The  bonuses  paid to our
executive  officers in 2006 were determined by our Board of Directors,  and were
based on the  performance  of the executive  officer and the company.  We do not
have a formal plan for determining the  compensation of our executive  officers.
Instead, each executive officer negotiates their respective employment agreement
with us.

         All  agreements  with our named  executive  officers  that  provide for
payments to such named  executive  officers at,  following or in connection with
the  resignation,  retirement  or  other  termination  of such  named  executive
officers,   or  a  change  in  control  of  our  company  or  a  change  in  the
responsibilities  of such named executive officers following a change in control
are set  forth  in the  following  description  of their  respective  employment
agreements.

         DANIEL GUEZ

         On January 12,  2007,  we entered  into an  Employment  Agreement  with
Daniel  Guez,  pursuant  to which he will serve as our Chief  Executive  Officer
and/or Creative Director, and Chairman of the Board of Directors.  The agreement
is for an  initial  term  of  three  years  and is  automatically  extended  for
additional  one year terms unless we or Mr. Guez elect not to extend the term of
the  agreement.  Under the  agreement,  Mr.  Guez  will  receive  the  following
compensation:

         o        Base  salary  of  $400,000   per  annum,   subject  to  upward
                  adjustment;

         o        Annual performance bonus in the amount equal to the sum of (i)
                  ten  percent  (10%)  of  the  first  three   million   dollars
                  ($3,000,000)  of the  Company's  consolidated  EBITDA for such
                  fiscal  year,  and (ii) five percent (5%) of the amount of the
                  Company's  consolidated  EBITDA,  if any,  in  excess of three
                  million dollars ($3,000,000) for such fiscal year; and

         o        Automobile and related expense allowance of $2,300 per month.

         If during the employment period, (a) we terminate Mr. Guez's employment
without cause or if Mr. Guez  terminates his employment for good reason,  or (b)
if (i) we fail to extend the period of the employment  period as provided above,
and (ii) at any time within six months  following  expiration of the  employment
period, we terminate 


                                       7

<PAGE>


Mr. Guez's  employment  without cause or Mr. Guez  terminates his employment for
good reason or without good reason, Mr. Guez will be paid severance in an amount
equal to one and one-half  times the sum of Mr.  Guez's base salary in effect on
the date of  termination  plus the average annual bonus received by Mr. Guez for
the two complete fiscal years immediately prior to the termination date, and all
of his outstanding stock options,  restricted stock and other equity awards will
accelerate  and become fully vested on the date of  termination.  If Mr.  Guez's
employment  is  terminated  by  reason  of his death or  disability  during  the
employment period, Mr. Guez, his estate or beneficiaries, as applicable, will be
entitled  to be paid a lump sum  payment of  one-hundred  percent  (100%) of Mr.
Guez's then  current  annual base salary,  and all  outstanding  stock  options,
restricted stock and other equity awards granted to Mr. Guez will accelerate and
become fully vested on the date of termination.  In addition, for a period of 18
months  following the date of termination,  we will continue to provide Mr. Guez
and his eligible family members with group health insurance coverage.

         On May 21, 2007,  Mr. Guez  resigned as Chief  Executive  Officer,  and
currently serves as Creative Director of People's  Liberation.  On May 21, 2007,
Colin Dyne was  appointed  Chief  Executive  Director  of  People's  Liberation.
Pursuant to an oral agreement between the Company and Mr. Dyne, Mr. Dyne will be
paid an annual  salary of  $200,000,  and will  receive  an  automobile  expense
allowance of $1,200 per month.

         EDWARD HOUSTON

         On July 13, 2006, we entered into an Employment  Agreement  with Edward
Houston  pursuant to which he serves as the Company's  President  effective July
20,  2006.  Mr.  Houston is employed  on an "at will" basis and will  receive an
annual  salary of  $300,000,  which is subject  to  adjustment  pursuant  to our
employee  compensation  policies in effect from time to time. In addition to his
base  salary,  commencing  with  fiscal  year  2006  and for  each  fiscal  year
thereafter  during  which Mr.  Houston is  performing  services  for us, we will
maintain a  Management  Incentive  Program  pursuant  to which we will set aside
during  each fiscal  year for  payment to Mr.  Houston an amount  equal to three
percent (3%) of our earnings before interest and taxes for such fiscal year. Mr.
Houston  was also  granted  a  non-qualified  stock  option  to  purchase  up to
1,000,000 shares of our common stock at an exercise price of $1.25. In the event
Mr.  Houston is terminated  without cause prior to the third  anniversary of the
commencement  of his  employment  with  us,  we  shall  pay to Mr.  Houston  the
equivalent of six months of his base salary,  or if lesser,  the base salary Mr.
Houston  would have earned had he remained  employed  with us through such third
anniversary of  commencement  of his employment at his then  applicable  rate of
pay.

         DARRYN BARBER

         On January 3, 2006, we entered into an Employment Agreement with Darryn
Barber  pursuant  to which he  serves  our  Chief  Financial  Officer  and Chief
Operating  Officer.  The  agreement  is for a term of 2 years  commencing  as of
November 22, 2005 and  terminating on November 21, 2007.  Mr. Barber  received a
base salary of $212,000 through the first  anniversary of his  appointment,  and
currently receives $232,000 through 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.  On July 7, 2006, in accordance  with the Employment  Agreement,  Mr.
Barber was granted a stock option to purchase 300,000 shares of our common stock
at an  exercise  price of $1.25 per  share.  One-third  of the  options  vest in
monthly  installments of 25,000  beginning August 7, 2006 and the balance vested
immediately.  In the  event Mr.  Barber is  terminated  without  cause,  we will
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.
On November 8, 2006,  we entered into an amendment  to Mr.  Barber's  employment
agreement.  Pursuant to the amendment,  Mr. Barber resigned from his position as
Chief Operating Officer, effective November 8, 2006. Mr. Barber will continue to
serve as our Chief  Financial  Officer.  The amendment also extends the exercise
period of Mr. Barber's option to purchase  300,000 shares of our common stock to
a period of one year  following  termination  of Mr.  Barber's  service  for any
reason  other  than  for  cause  (as  defined  in  the  employment   agreement).
Previously,  Mr.  Barber's  option was to remain  exercisable for a period of at
least six months  following  termination  of his service  with us for any reason
other than for cause. Mr. Barber's annual bonus amounted to $40,000 for the year
ended December 31, 2006.


                                       8

<PAGE>


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

         The following table presents information  regarding outstanding options
held by our named  executive  officers  as of the end of our  fiscal  year ended
December 31, 2006. None of the named executive officers exercised options during
the fiscal year ended December 31, 2006.


<TABLE>
<CAPTION>
                             Number of Securities Underlying
                                  Unexercised Options (#)
                             -------------------------------- 
                                                                      Option          Option
                                                                     Exercise        Expiration
          Name                Exercisable       Unexercisable        Price ($)          Date
--------------------------   -------------      -------------      -------------   -------------
<S>                                 <C>               <C>          <C>             <C>
Daniel Guez ..............            --                 --                 --              --

Darryn Barber (1) ........         300,000(1)            --        $        1.25    July 7, 2016

Edward Houston (2) .......          83,333(2)         916,667(2)   $        1.25   July 31, 2016
</TABLE>



(1)      On July 7, 2006,  Mr. Barber was granted an option to purchase  300,000
         shares of our common stock at a per share exercise  price of $1.25.  As
         of December 31, 2006, this option was fully vested.

(2)      On July 31,  2006,  Mr.  Houston  was  granted  an option  to  purchase
         1,000,000  shares of our common stock at a per share  exercise price of
         $1.25.  This  option  vests  in  twelve  equal  quarterly  installments
         beginning  October 2006 through July 2009.  This option  terminates  on
         July 31, 2016.

DIRECTOR COMPENSATION AND INDEPENDENCE

         The following table presents information regarding compensation paid to
persons  serving as our  non-employee  directors  during  the fiscal  year ended
December 31, 2006.


<TABLE>
<CAPTION> 
                             Fees Earned
                               or Paid       Option        All Other        
          Name                 in Cash      Awards (3)    Compensation       Total
-------------------------   ------------   ------------   ------------   ------------
<S>                         <C>            <C>            <C>            <C>
Dean Oakey (1) ..........   $     10,000   $     14,724   $       --     $     24,724

Kevin Keating (2) .......   $     10,000   $     14,724   $       --     $     24,724
</TABLE>


(1)      On June 22, 2006,  Mr.  Oakey was granted an option to purchase  36,000
         shares of our common stock at a per share exercise price of $1.25. This
         option  vested  18,000  shares on the date of grant  and  1,500  shares
         monthly  thereafter  through July 2007. This option  terminates on June
         22, 2016.  Mr. Oakey did not exercise any of his option  awards  during
         the fiscal year ended December 31, 2006.

(2)      On June 22, 2006, Mr. Keating was granted an option to purchase  36,000
         shares of our common stock at a per share exercise price of $1.25. This
         option  vested  18,000  shares on the date of grant  and  1,500  shares
         monthly  thereafter through July 2007. This option terminates on August
         19, 2007.  Mr. Keating did not exercise any of his option awards during
         the fiscal year ended  December 31,  2006.  Mr.  Keating  resigned as a
         director on May 21, 2007.

(3)      Assumptions  relating  to the  estimated  fair  value  of  these  stock
         options, which we are accounting for in accordance with SFAS 123(R) are
         as follows:  risk-free  interest rate of 5.2%;  expected dividend yield
         0%; expected option life of 5.3 years; and volatility of 60.3%.  Please
         see Note 2 to our financial  statements  for further  discussion of our
         assumptions  relating  to the  estimated  fair  value  of  these  stock
         options.

         We  currently  pay  non-employee  directors  an annual fee of  $10,000.
Non-employee directors,  Mr. Keating and Mr. Oakey, also received 36,000 options
each to purchase  shares of our common  stock in June 2006 and  $10,000  each in
payment for service on the Board of directors  from July 2006 through June 2007.
Our directors are 


                                       9

<PAGE>


also  reimbursed  for  travel  expenses  associated  with  attendance  at  Board
meetings.  There were no reimbursements  for travel expenses for the fiscal year
ended December 31, 2006.

REPORT OF BOARD OF DIRECTORS ON AUDIT COMMITTEE FUNCTIONS 

            We do not  have an  Audit  Committee.  For  the  fiscal  year  ended
December 31, 2006, 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
2006, the Board of Directors:

         o        Reviewed and discussed the audited  financial  statements  for
                  the  year  ended   December  31,  2006  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 2006, 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, 2006
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.


                                       10

<PAGE>


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,  2006 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.


         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 and review  services  provided by  Grobstein,  Horwath &
Company, LLP totaled  approximately  $117,000 during the year ended December 31,
2006,  including  fees  associated  with the  December  31, 2005 audit,  and the
reviews of our quarterly  financial  statements  for the periods ended March 31,
2006, June 30, 2006 and September 30, 2006.

         Fees for audit and review  services  provided by  Grobstein,  Horwath &
Company,  LLP totaled  approximately  $74,000 during 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 for the fiscal year ended September 30, 2005.

     AUDIT-RELATED FEES

         There  were no  audit-related  services  provided  for the years  ended
December 31, 2006 and 2005.

     TAX FEES

         Fees for tax services  provided by  Grobstein,  Horwath & Company,  LLP
during the year ended December 31, 2006 amounted to approximately  $29,000.  Tax
services provided during the year ended December 31, 2006 primarily consisted of
the  preparation  of the  Federal  and State tax returns for the Company and its
subsidiaries and other tax compliance services.

         There  were no  material  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, 2006
and 2005 for services provided by Grobstein,  Horwath & Company,  LLP or Shelley
International, CPA, except as described above.


                                       11

<PAGE>



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.

TRANSACTIONS WITH RELATED PERSONS, PROMORTERS OR CERTAIN CONTROL PERSONS

         Other than the employment  arrangements  described  above in "Executive
Compensation" and the transactions described below, since January 1, 2005, 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 the lessor of $120,000 or
                  1% of the average of our assets at year-end for the last three
                  completed fiscal years; and

         o        in which any director, nominee, executive officer, shareholder
                  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.

TRANSACTIONS WITH OFFICERS, DIRECTORS, NOMINEES FOR DIRECTOR AND 5% SHAREHOLDERS

         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.

         In  addition,  please see the section  below  entitled  "Promoters  and
Control Persons."

         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.  The  Company  paid  $259,000  and  $10,000  in
consulting fees to this stockholder during the years ended December 31, 2006 and
2005.

         During the years ended  December 31, 2006 and 2005,  we purchased  trim
products from Tag-It Pacific, Inc., a related entity, amounting to approximately
$152,000 and $75,000, respectively.  Colin Dyne and Susan White are directors of
Tag-It Pacific, Inc.

         During  2006 and in the  first  quarter  of 2007,  Ms.  White  provided
consulting  services  to the  People's  Liberation,  Inc.,  advising on branding
issues.  For these  services,  we paid Ms.  White an  aggregate  of  $16,300  in
consulting fees. Ms. White ceased providing services in April 2007.

PROMOTERS AND CONTROL PERSONS

         On December  15, 2004,  Keating  Reverse  Merger Fund,  LLC, a Delaware
limited liability company,  David L. Hadley (our former chief executive officer)
and Natural Technologies, Inc., an Arizona corporation entered into a


                                       12

<PAGE>


purchase  agreement  pursuant to which certain  shareholders of the company sold
5,625,287 shares (on a pre-reverse stock split basis) of the common stock of the
company,  representing  approximately 70.99% of the outstanding shares of common
stock of the company,  to Keating  Reverse  Merger  Fund,  LLC, for an aggregate
purchase price of $375,000.

         On January 31,  2005,  we entered  into an  Assumption  Agreement  with
Global Medical  Technologies,  Inc., Natural  Technologies,  Inc. and Mr. Hadley
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 Technologies,  Inc. Global
Medical  Technologies,  Inc.  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.  In February 2005, we distributed all of the outstanding
shares of common stock of Global Medical Technologies,  Inc. on a pro rata basis
to our stockholders.  Following the distribution,  Global Medical  Technologies,
Inc.  continued to operate its medical equipment  reconditioning  business as an
independent  company.  After this distribution,  we existed as a "shell company"
under the name of Century  Pacific  Financial  Corporation  with nominal  assets
whose sole business was to identify,  evaluate and investigate various companies
to acquire or with which to merge.

         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 (on a pre-reverse stock split basis) 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 November 22, 2005, we consummated  an exchange  transaction in which
we acquired all of the  outstanding  ownership  interests of Bella Rose,  LLC, a
California limited liability company ("Bella Rose") and Versatile Entertainment,
Inc., a California corporation  ("Versatile") from their respective shareholders
and members, in exchange for an aggregate of 2,460,106.34 shares of our series A
convertible preferred stock which, on January 5, 2006, converted into 26,595,751
shares of our common stock on a post reverse  stock split basis.  At the closing
of the exchange  transaction,  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
acquirers, and People's Liberation, Inc. the legal acquirer.

         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.

DIRECTOR INDEPENDENCE

         Our board of directors currently consists of five members:  Daniel Guez
(our Creative  Director and  Co-Chairman of the Board of Directors),  Colin Dyne
(Chief Executive Officer and Co-Chairman of the Board of Directors), Dean Oakey,
Susan  White and Troy  Carter.  Daniel  Guez and Dean  Oakey  were  elected at a
meeting of shareholders.  Colin Dyne, Susan White and Troy Carter were appointed
by the Board of Directors and will serve until our next annual  meeting or until
his or her successor is duly elected and qualified.

         We  do  not  have  a  separately  designated  audit,   compensation  or
nominating  committee of our board of directors  and the  functions  customarily
delegated to these  committees are performed by our full board of directors.  We
are not a "listed  company"  under SEC rules and are  therefore  not required to
have separate committees


                                       13

<PAGE>


comprised of independent directors. We have, however,  determined that Ms. White
and Mr. Carter are  "independent" as that term is defined in Section 4200 of the
Marketplace  Rules as required by the NASDAQ Stock Market. As we do not maintain
an audit committee,  we do not have an audit committee "financial expert" within
the meaning of Item 401(d) of Regulation S-B.

         We intend to establish an audit committee,  compensation committee, and
nominating  and corporate  governance  committee  following the expansion of our
board  to  include  at least  three  directors  who are  independent  under  the
applicable rules of the SEC and NASDAQ.


SECURITY  OWNERSHIP  OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT  AND RELATED
STOCKHOLDER MATTERS

         The following  table  presents  information  regarding  the  beneficial
ownership of our common stock as of May 28, 2007 by:

         o        each of the named  executive  officers  listed in the  summary
                  compensation table;

         o        each of our directors and director nominees;

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

         o        each  shareholder  known to 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 21, 2007 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.

         The information  presented in this table is based on 34,942,563  shares
of our common stock outstanding on May 28, 2007. Unless otherwise indicated, the
address  of  each  of the  executive  officers  and  directors  and  5% or  more
shareholders  named below is c/o People's  Liberation,  Inc., 150 West Jefferson
Boulevard, Los Angeles, CA 90007.


<TABLE>
<CAPTION>
 
                                                     NUMBER OF SHARES     PERCENTAGE
                                                        BENEFICIALLY        OF SHARES  
NAME OF BENEFICIAL OWNER                                    OWNED          OUTSTANDING
--------------------------------------------------    ----------------    -------------
<S>                                                         <C>               <C>  
EXECUTIVE OFFICERS AND DIRECTORS:
Daniel S. Guez (1)................................          14,198,387        40.6%
   Creative Director, Vice Chairman and Secretary
Colin Dyne (2)....................................           7,731,560        22.1%
   Chief Executive Officer and Vice Chairman
Darryn Barber (3).................................             432,560         1.2%
   Chief Financial Officer
Edward Houston (4)................................             333,332          *
   President
Dean Oakey (5)....................................             514,383         1.5%
   Director
Susan White.......................................                  --          --
   Director
</TABLE>



                                       14

<PAGE>



<TABLE>
<CAPTION>
                                                      NUMBER OF SHARES     PERCENTAGE
                                                        BENEFICIALLY        OF SHARES  
NAME OF BENEFICIAL OWNER                                    OWNED          OUTSTANDING
--------------------------------------------------    ----------------    -------------
<S>                                                         <C>               <C>  
Troy Carter.......................................                  --          --
   Director
Directors and officers as a group (8 persons) (6).          23,365,246        65.0%

5% SHAREHOLDERS:
Microcapital Fund LP and Microcapital Fund Ltd (7)           2,800,000         7.9%
</TABLE>


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

(1)      Consists of 13,098,387 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 7,731,560 shares of common stock.

(3)      Consists  of  132,560  shares of common  stock and  300,000  options to
         purchase common stock.

(4)      Consists of 333,332 options to purchase common stock.

(5)      Consists  of  199,883  shares of common  stock,  warrants  to  purchase
         278,500 shares of common stock and options to purchase 36,000 shares of
         common stock.

(6)      Consists of  22,392,414  shares of common  stock,  warrants to purchase
         278,500  shares of common stock and options to purchase  694,332 shares
         of common stock.

(7)      Consists of  1,333,600  shares of common stock and warrants to purchase
         533,440  shares of common stock at an exercise  price of $2.00 owned by
         Microcapital Fund LP and 666,400 shares of common stock and warrants to
         purchase  266,560  shares of common stock at an exercise price of $2.00
         owned by  Microcapital  Fund Ltd. Ian P. Ellis,  the general partner of
         MicroCapital Fund LP and the President of Advisor, and Director of Fund
         of Microcapital  Fund Ltd.  exercises  voting and investment  authority
         over the shares held by these selling stockholders.

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
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


                                       15

<PAGE>


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,  2006,  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 2008 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 February 5, 2008. In addition, in the event a
stockholder proposal is not received by the Company by April 20, 2008, the Proxy
to be  solicited  by the Board of  Directors  for the 2008 Annual  Meeting  will
confer discretionary authority on the holders of the Proxy to vote the shares if
the proposal is presented at the 2008 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
2008 Annual  Meeting is  advanced or delayed  more than 30 days from the date of
the 2007 Annual Meeting,  stockholder  proposals  intended to be included in the
proxy  materials  for the 2008  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 2008 Annual Meeting.  Upon  determination  by the Company that
the date of the 2008 Annual  Meeting will be advanced or delayed by more than 30
days from the date of the 2007 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.

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, 2006,
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/  Colin  Dyne
                                         ------------------------------------
                                         COLIN DYNE, CO-CHAIRMAN OF THE BOARD
                                         AND CHIEF EXECUTIVE OFFICER
150 West Jefferson Boulevard
Los Angeles, CA 90007
May 28, 2007


                                       16

<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 Colin
Dyne 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 18, 2007,
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' five nominees as directors:

   Daniel Guez     Colin Dyne      Dean Oakey    Susan White    Troy Carter


                  |_|      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 28, 2007,  relating to the
Annual Meeting.


                                         Dated:___________________________, 2007

                                         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.