UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: October 31, ~~2009~~2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-27011

ALPINE AIR EXPRESS, INC.

(Exact ~~Name~~name of registrant as specified in its ~~Charter~~charter)

Delaware	33-0619518
(State or other Jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1177 Alpine Air Way

Provo, UT 84601

(Address of ~~Principal~~principal ~~Executive~~executive ~~Offices~~offices)

(801) 373-1508

(Registrant’s ~~Telephone~~telephone ~~Number~~number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [ ] No [X]

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

(1) Yes [X] No [ ] (2) Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:



Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold, or the average bid and asked price of such common stock, as of the last business day of the Registrant's most recently completed second fiscal quarter.

April 30, ~~2009~~2010 - $1776,~~058,599~~306 There are approximately 7,057,327 shares of common voting stock of the Registrant beneficially owned by non-affiliates. There is a limited public market for the common stock of the Registrant, so this computation is based upon the bid price of $0.1511 per share of the Registrant's common stock on the OTC Bulletin Board as of April 30, ~~2009~~2010.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Not applicable.

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date:

January 2926, ~~2010~~2011: Common – 36,~~271~~059,~~461~~481

January 2926, ~~2010~~2011: Preferred – ~~820~~780,000

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Background.

Alpine Air Express, Inc., a Delaware corporation ("Alpine Air" or the “Company”), is engaged in the air cargo business through its wholly owned subsidiary, Alpine Aviation, Inc., a Utah corporation ("Alpine Aviation" or “Alpine”). Alpine Aviation was organized on October 7, 1975, in the state of Utah. Alpine Aviation has been operated by the same management since 1986. Alpine Aviation is an air cargo operator, transporting mail packages and other time-sensitive cargo to 19 cities in the western portion of the mainland United States. Alpine Aviation began its operations in the 1970's with the intent of being a regional charter and cargo carrier. After present management acquired control in 1986, Alpine Aviation began to focus less on the charter or passenger services and more on the cargo aspects of the airline industry. Since the 1990's, Alpine Aviation has focused on ~~hauling~~transporting mail for the United States Postal Service (USPS) and carrying packages for a large nationwide carrier because of their favorable contracts, routes, and payment practices. As a result of this focus, approximately 8792% of Alpine Aviation's revenues now come directly from these two customers.

Alpine Air Express was formed in April, 1994, under the name "Riverside Ventures, Inc." Prior to its acquisition of Alpine Aviation in June, 2000, Alpine Air Express had no business operations and was actively looking for a business with which to merge or acquire in an effort to create an operation that would provide value to our shareholders.

On June 12, 2000, Alpine Air Express, under its former name, entered into an agreement and plan of reorganization with Alpine Aviation, pursuant to which Alpine Air acquired all of the outstanding shares of Alpine Aviation. Pursuant to the terms of the reorganization, Alpine Air Express issued 9,895,000 shares of its common stock to the stockholders of Alpine Aviation in exchange for all of the issued and outstanding shares of Alpine Aviation. As a result of the reorganization, Alpine Aviation became a wholly owned subsidiary of Alpine Air Express. As a further result of the reorganization, the management of Alpine Aviation assumed control over Riverside Ventures and changed the company's name from "Riverside Ventures, Inc." to the current name of "Alpine Air Express, Inc." The reorganization has been treated as a "reverse merger," with Alpine Aviation as the surviving entity for accounting purposes and Alpine Air the surviving entity for corporate purposes. At the time of the reorganization, Alpine Air Express had 1,000,000 shares of common stock outstanding. Following the reorganization, Alpine Air had 10,895,000 shares outstanding, which was composed of the 1,000,000 shares outstanding prior to the issuance of shares for Alpine Aviation and the 9,895,000 newly issued shares to the Alpine Aviation stockholders. Alpine Air subsequently issued an additional 105,000 shares, bringing the total outstanding shares to 11,000,000 as of 2003. During 2004 and 2005 the Company issued 122,000 shares, bringing the total outstanding shares to 11,122,000 at 2005. In 2006, weAlpine Air effected a 3 for 1 stock split and issued additional shares for compensation during 2006 resulting in a total of 36,271,461 outstanding shares at both October 31, 2006 and 2007. Unless otherwise indicated all share calculations in this Annual Report take into account this stock split. During ~~2009~~2010 the Company ~~purchased~~retired 70141,~~660~~320 shares toit ~~hold~~held asin Treasury Stock ~~bringing~~reducing the total ~~shares~~of outstanding shares to 36,130,141. During 2010 the Company purchased 70,660 shares to hold as Treasury Stock.

Routes and Delivery.

Alpine Aviation currently has 2523 air cargo routes covering 19 cities in six western states in the mainland U.S. Alpine also provides contract cargo charter flights for other carriers and for the public. Most routes are flown every day and some multiple times per day. In fiscal ~~2009~~2010, Alpine Aviation transported 98,~~673~~444 tons of cargo. The largest component of Alpine Aviation's cargo mix is U.S. mail, which accounted for approximately 6669% of our fiscal ~~2009~~2010 revenue. The USPS delivers and picks up all cargo weAlpine ~~carry~~Air carries at the aircraft, unless other arrangements are called for separately by the contract. When the USPS delivers and picks up the mail at the side of ~~our~~the aircraft, weAlpine ~~are~~Air is able to reduce ~~our~~its costs significantly.

Alpine currently operates 2923 aircraft on ~~two~~one national ~~certificates (one is inactive)~~certificate. The largest aircraft in ~~our~~its fleet is a Beechcraft 1900, which holds approximately 6,000 pounds of cargo. ~~Our~~The other aircraft type is the Beechcraft 99, which holds approximately 3,400 pounds of cargo. The Company also owns 23 Beechcraft 1900-D aircraft (passenger configuration) and currently leases them on an annual lease basis.

Industry overview.

The package delivery and air cargo business has evolved rapidly over the last two decades, driven by the integration of world markets, the rationalization of corporate supply chains and the implementation of enterprise software and internet-based information technology solutions. The ability to provide time-definite delivery options and transfer information increasingly determines success. Customer demands for real-time information processing and worldwide distribution and logistics capabilities favor companies with integrated services.

software and internet-based information technology solutions. The ability to provide time-definite delivery options and transfer information increasingly determines success. Customer demands for real-time information processing and worldwide distribution and logistics capabilities favor companies with integrated services.

Customers increasingly focus on the timing and predictability of deliveries rather than the mode of transportation. As customers re-engineer the total distribution process, which includes order processing, administration, warehousing, transportation and inventory management, they attempt to reduce the most expensive and fastest growing component, inventory carrying costs. Time-definite transportation, which is no longer limited to air express, has become a critical part of just-in-time inventory management and improving overall distribution efficiency.

Technology advances have made it easier for companies to analyze and compare distribution options. As a result of these changes, individual shipments are generally smaller but more frequent and a greater proportion of products are being delivered directly to end-users, particularly as e-commerce takes hold. Customers expect high performance levels and broad product offerings as they seek to optimize supply chain solutions.

There has been dramatic growth in the utilization of e-commerce by both consumers and businesses for the transfer of goods. Consumers who use the internet for home shopping and other services shop across borders and require global delivery capabilities.

Delivery of packages to a specific destination at a guaranteed time has been the growth engine for the package delivery industry over the past decade. The industry has become increasingly dominated by large integrated carriers such as UPS and FedEx that provide seamless services, including pick-up and delivery, shipment via air and/or road transport and customs clearance. The pace of consolidation in the package delivery industry has increased on a global scale.

Industry participants are acquiring, merging with or forming alliances with partners that can expand global reach, breadth of services or technological capabilities in order to better enable those participants to compete in a rapidly changing global environment. In particular, government-run post offices have made several recent alliances with and acquisitions of private-sector companies. Post offices, which still maintain numerous advantages over private-sector companies, create significant challenges for competitors worldwide.

With the growth in cargo and e-commerce taking a greater hold, we feel the need for companies like Alpine Air will only continue to expand. We offer the ability to deliver mail and cargo to smaller markets without many of the associated capital costs.

Employees.

Alpine Air has ~~107~~109 employees, 5661 of which are full time, including 910 in administration and 5562 in flight operations, which includes 2223 pilots. No employees belong to any labor union or have employment contracts.

ITEM 1A. RISK FACTORS

Not applicable to smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable to smaller reporting companies.

ITEM 2. DESCRIPTION OF PROPERTIES

Alpine Air is headquartered in its owned facility located in Provo, Utah. This facility is on leased property at the Provo Municipal Airport. ~~Our~~The hangar consists of approximately 25,000 square feet with attached corporate offices. ~~The hangar~~ and ~~offices~~has ~~have~~ been valued at a cost of approximately $1,200,000.

The company also leases aan 1011,~~403~~450 square foot hangar and a separate maintenance facility in Billings, Montana at the Logan International Airport and has permits to lease and use hangar and office space with the State of Hawaii, Department of Transportation.

WeAlpine ~~carry~~Air carries extensive insurance coverage on all facilities as well as aircraft. Management believes ~~our~~the insurance coverage is adequate to cover any damage to ~~our~~its’ facilities or aircraft and any resulting liabilities.

Alpine Air operates the following aircraft:


Aircraft Model: All Aircraft are Manufactured by Beechcraft	Number of aircraft	Location	Owned/Note Payable/Capital Lease
99	6	Utah, Montana	Owned
99	6	South Dakota, Montana	Note Payable
1900	5	Montana, Utah, Bahamas	Owned
1900	8	North Dakota, Montana	Note Payable
1900	1	Montana	Capital Lease

All aircraft are in working condition and alternately either in maintenance or assigned to a scheduled route.

ITEM 3. LEGAL PROCEEDINGS

~~There~~During ~~are~~the ~~two~~reporting ~~claims~~period, ~~pending~~the ~~against~~Company ~~the~~received ~~Alpine~~three ~~Air~~notices byfrom the ~~FAA~~Federal ~~from~~Aviation ~~the~~Administration (FAA) ~~Regional~~that ~~Office~~the inFAA ~~Renton,~~was ~~Washington. One~~going ~~claim~~to ~~alleges~~impose ~~that~~civil ~~contract~~penalties ~~ramp~~for ~~personnel~~alleged ~~were~~violations ~~allowed~~of toFAA ~~load~~regulations. ~~Alpine~~Company ~~Air~~management ~~aircraft~~immediately ~~even~~began ~~though~~countering ~~they~~those ~~had~~allegations ~~not~~and ~~completed~~assessed ~~Alpine~~the ~~Air’s~~probability ~~hazardous~~of ~~materials~~actually ~~training~~having ~~program.~~monetary ~~The~~penalties ~~FAA~~imposed ~~has~~against ~~proposed~~the aCompany. ~~civil~~The ~~penalty~~Company inestimated the amount of ~~$5,000~~the ~~and~~possible ~~Alpine~~penalties ~~Air~~and isaccrued ~~vigorously~~a ~~contesting~~reasonable ~~the~~amount ~~claim.~~to ~~The~~cover ~~second~~the ~~FAA~~potential ~~claim~~assessments ~~alleges~~all ~~violations~~while ofvigorously ~~maintenance~~contesting ~~requirements~~the ~~for~~allegations. anSubsequent ~~airplane~~to ~~based~~the inend ~~Hawaii~~of ~~during~~ the reporting period, two of ~~January~~the tothree ~~February~~notice ~~2009.~~actions ~~The~~were ~~FAA~~negotiated ~~has~~with ~~proposed~~the aFAA ~~civil~~resulting ~~penalty~~ in ~~the~~substantially ~~amount~~reduced ~~of $228~~penalties,~~250~~ ~~and~~well ~~Alpine~~within ~~Air is vigorously contesting~~ the ~~claim.~~established ~~The~~reserves ~~Company~~and ~~believes~~with ~~there is~~ no ~~good~~further ~~faith~~enforcement ~~basis~~action ~~for~~by the ~~amount of either of the claims~~FAA.

~~Alpine~~ During ~~Air is also contesting a claim made by~~ the ~~State~~reporting ~~of Hawaii~~period, ~~Department~~the ofCompany ~~Transportation,~~contested ~~Airports~~a ~~Division,~~billing ~~for~~from ~~alleged~~a ~~past~~service ~~due~~provider ~~landing~~based ~~fees~~upon ~~for~~ the ~~period~~service ofprovider’s ~~April~~Fee ~~2004 through 2009 in the amount of $331,584~~Agreement. The ~~claim~~matter was ~~not~~submitted ~~presented~~ to ~~Alpine~~arbitration ~~Air~~by ~~until~~the ~~2008~~service ~~and~~provider ~~the~~which ~~Company~~was ~~immediately~~ contested by the ~~claimed amount~~Company. ~~Alpine~~Subsequent ~~Air~~to ~~is in~~ the ~~process~~end of ~~concluding~~the areporting ~~negotiated~~period, ~~settlement of~~ the ~~claim~~matter ~~for~~was ~~the~~resolved ~~total~~by ~~sum~~settlement ofbetween ~~$90,000~~the parties and the ~~final~~arbitration ~~settlement~~matter ~~agreement~~was ~~should~~dismissed beas ~~signed~~part ~~within~~of the ~~month~~settlement.

Alpine Air Express has evaluated events for the period October 31, ~~2009~~2010 through January 2926, ~~2010~~2011, the date the financial statements were issued, and concluded there were no other events or transactions during this period that required recognition or disclosure.

ITEM 4. ~~SUBMISSION~~(REMOVED OFAND ~~MATTERS TO A VOTE OF SECURITIES HOLDERS~~RESERVED)

~~Not~~PART ~~applicable; no matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this Annual Report.~~II

PART II

Alpine Air's common stock is currently quoted on the National Association of Securities Dealers Electronic Bulletin Board under the symbol "APNX". Set forth below are the high and low closing bid prices for our common stock for each quarter during our two most recent fiscal years. These bid prices were obtained from Yahoo Finance (available on the internet). All prices listed herein reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.

Quarter Ended	High Bid	Low Bid
January 31, 2008	$0.40	$0.35
April 30, 2008	$0.55	$0.50
July 31, 2008	$0.30	$0.30
October 31, 2008	$0.07	$0.05
January 31, 2009	$0.30	$0.10
April 30, 2009	$0.22	$0.15
July 31, 2009	$0.15	$0.08
October 31, 2009	$0.20	$0.16
January 31, 2010	$0.20	$0.085
April 30, 2010	$0.14	$0.082
July 31, 2010	$0.12	$0.07
October 31, 2010	$0.11	$0.05

We cannot guarantee that the present market for our common stock will continue or be maintained, and the resale of "unregistered" and "restricted" shares pursuant to Rule 144 of the Securities and Exchange Commission may substantially reduce the market price of our common stock.

Holders.

As of January 2926, ~~2010~~2011, there were 36,~~130~~059,~~141~~481 ~~post split~~ shares of common stock outstanding held by approximately ~~443~~439 active holders of record, including broker-dealers and clearing corporations holding shares on behalf of their customers, as reported by the Company's transfer agent. This figure does not include an indeterminate number of stockholders who may hold their shares in street name.

Dividends.

Since its inception, Alpine Air has paid no dividends on its common stock, and we do not anticipate that we will pay any dividends in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans.

Equity Compensation Plan Information

Plan Category	Number of ~~Securities~~securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a)
	(a)	(b)	(c)
Equity compensation plans approved by security holders	~~556~~554,~~620~~120 215,000 300,789	$2.53 $0.50 $0.40	- - -
Equity compensation plans not approved by security holders	327,500 -0-	$0.30 -0-	- -
Total	1,397,409	$1.24	-

Equity compensation plans not approved by security holders	362,500 -0-	$0.30 -0-	- -
Total	1,434,909	$1.21	-

Recent Sales of Unregistered Securities.

Alpine Air has not sold any equity securities during the period covered by this Annual Report that were not registered under the Securities Act of 1933, as amended.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

During the quarterly period ended October 31, ~~2009~~2010, neither Alpine Air nor any “affiliated purchaser” as defined in Reg. Section 240.10b-18(a)(3) purchased any of Alpine Air’s common equity.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable to smaller reporting companies.

ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General.

Alpine Aviation Inc. provides air cargo transportation services in the United States in Montana, North Dakota, South Dakota, Wyoming, Nebraska, and Colorado. While the USPS is our primary customer, we also provide contract cargo and charter services for other package delivery and cargo carriers. In addition to air cargo transportation, the Company provides maintenance service on aircraft owned or operated by third parties, leasing of passenger aircraft, and operates a First Officer Training Program.

Revenues were $20.41 million in ~~2009~~2010, a 31.7% ~~increase~~decrease from $1920.84 million in ~~2008~~2009. The primary ~~increase~~decrease in revenues was the result of ~~two~~the ~~main~~loss ~~events;~~of ~~the~~our ~~award~~Hawaii ofUSPS ~~the~~contracts ~~Montana,~~on ~~South~~August ~~Dakota~~7, ~~and~~2009, ~~North~~but ~~Dakota~~was ~~USPS~~mostly ~~contracts~~offset atby ana ~~increased~~revenue ~~rate~~increase inon ~~September~~our ~~2009~~2010 ~~coupled~~fiscal ~~with~~year due to the ~~loss~~award in September 2009 of the ~~Hawaii~~Montana, South Dakota, and North Dakota USPS contracts ~~and~~at increased rates as well as the leasing of ~~two~~one additional 1900-D passenger aircraft in December 2009.

During the quarter ending July 31, 2009, the Company learned that the US Postal Service did not renew the contracts in place in Hawaii. These contracts expired June 6, 2009 and Alpine Air signed a two month contract to fly several routes with the company that was awarded the contract. That contract expired on August 7, 2009 and Alpine Air discontinued operations in Hawaii. ~~The~~Seven aircraft ~~have~~were ~~been~~ redeployed to the mainland. ~~and~~Four of these aircraft were immediately used to end month-to-month leases with third parties, two aircraft are being used as ~~spare~~additional aircraft in ~~our~~the Billings, MT operations to take advantage of extra charter opportunities as they arise and as backup spare aircraft in the event an aircraft needs maintenance. One aircraft was sold in May 2010.

In September 2009 the Company was successful in its attempts to keep the Montana/South Dakota/North Dakota contract with the US Postal service at an increased rate. The contract began on September 5, 2009 and runs for six years through September 5, 2015. In the future, if the Company were unable to renew this contract, it would have a ~~significant impact on earnings and revenues. However, management has had substantial success in renewing contracts with the USPS over the past 20 years.~~

Insignificant ~~2009,~~impact ~~the~~on ~~Company~~earnings ~~carried~~and ~~over~~revenues. 9However,~~673~~ ~~tons~~management ofhas ~~cargo~~had assubstantial ~~compared~~success ~~to 11,162 tons~~ in ~~2008.~~renewing ~~This~~contracts ~~decrease~~with ~~is directly attributable to~~ the ~~loss~~USPS ofover the ~~Hawaii~~past ~~USPS~~20 ~~contracts in August 2009~~years.

~~The~~In ~~Company~~fiscal ~~continued~~2010, tothe ~~experience~~Company ~~rising~~carried ~~costs~~over ~~in insurance~~8,444 ~~contract~~tons ~~labor~~of ~~costs~~cargo ~~and~~as ~~professional~~compared ~~services~~to ~~fees.~~9,673 ~~These~~tons ~~costs~~in ~~along~~fiscal ~~with~~2009. ~~the~~This ~~need~~decrease tois ~~continue~~directly ~~maintenance~~attributable ~~and~~to ~~repair~~the loss of ~~our~~the ~~aircraft~~Hawaii ~~place~~USPS acontracts ~~strong~~in ~~demand~~August ~~on our cash resources~~2009.

InThe ~~January~~Company ~~2008~~experienced ~~and~~rising ~~again~~costs infor ~~May~~fuel ~~2008~~in ~~there~~fiscal ~~were~~2010. ~~two~~This ~~separate~~cost ~~incidents~~increase ~~involving~~along ~~the~~with ~~Company’s aircraft. In both cases,~~ the ~~aircraft~~need ~~were~~to ~~damaged~~continue ~~beyond~~maintenance and repair ~~or unrecoverable. However, both~~ of ~~the~~our aircraft ~~were~~place ~~fully~~a ~~insured~~strong ~~and~~demand ~~the Company has not experienced any significant effect~~ on ~~operations~~our orcash ~~its financial position~~resources. ~~There were no aircraft dispositions in 2009.~~

During fiscal 2010, the Company acquired one additional Beechcraft 1900-D passenger aircraft and sold one Beechcraft 1900-C aircraft.

Liquidity and Capital Resources.

October 31, ~~2009~~2010 and ~~2008~~2009.

~~The~~Historical ~~Company~~Source ~~has a working capital position on October 31, 2009~~ of ~~$669,987,~~Cash asand ~~compared~~Capital to working capital on October 31, 2008, of $1,839,462. The decrease in working capital has been the direct result of a $841,273 decrease in current assets coupled with an increase of $328,202 in current liabilities. The Company presently has no material off-balance sheet financing arrangements. Expenditures:

~~Total~~The ~~assets~~Company ~~increased~~has toa ~~$26,560,224~~working capital position on October 31, ~~2009~~2010 ~~from~~of $252,~~413~~255,~~758~~625, as compared to working capital on October 31, ~~2008.~~2009, ~~Total~~of ~~liabilities~~$669,987. ~~also~~The ~~increased~~increase toin ~~$12,552,207~~working ~~from~~capital ~~$11,916,143~~has ~~during~~been the ~~same~~direct ~~period.~~result ~~Our~~of ~~stockholders'~~a ~~equity~~$350,315 ~~has~~increase ~~also~~in ~~increased~~current assets coupled with a ~~total~~decrease of $~~510~~1,~~402~~235,323 ~~from~~in ~~$13,497,615~~current toliabilities. ~~14,008,017~~The ~~for~~Company ~~October~~presently ~~31,~~has ~~2008~~no ~~and~~material ~~October~~off-balance ~~31,~~sheet ~~2009,~~financing ~~respectively~~arrangements.

~~For~~Total ~~the~~assets ~~year~~increased ~~ended~~to $27,783,424 on October 31, ~~2009~~2010 ~~there was a net profit~~ from ~~operations~~$26,560,224 ~~before~~on ~~income~~October ~~taxes~~31, ~~and~~2009. ~~preferred~~Total ~~stock~~liabilities ~~dividends~~decreased ofto $112,~~629~~306,~~011.~~428 ~~This is a decrease~~ from ~~the previous year’s net income of~~ $112,~~811~~552,~~113.~~207 ~~Depreciation~~during ~~for~~ the ~~year~~same ~~ending~~period. ~~October~~Total ~~31,~~stockholders' ~~2009~~equity ~~was~~has ~~$3,163,137~~also ~~for~~increased ana ~~increase~~total of $~~944~~1,~~427~~468,979, ~~over~~from ~~last~~$6,542,737 ~~year. This increase is mostly due~~ to ~~the~~8,011,716 ~~acquisition~~for ofOctober ~~aircraft~~31, to2009 ~~the fleet at the end of 2008~~ and ~~additional~~October ~~ground~~31, ~~equipment~~2010, ~~purchases~~respectively.

~~During~~ For the year ended October 31, ~~2009~~2010 there was a net profit from operations before income taxes and preferred stock dividends of $3,500,637. ~~the~~This ~~Company~~is ~~increased~~an increase from the ~~tax~~previous ~~NOL~~year’s ~~carryforward.~~net ~~There~~income ~~was~~of a$1,629,011. ~~change~~Depreciation infor the ~~deferred~~year ~~tax~~ending ~~accounts~~October 31, 2010 was $3,208,929 for an increase of $~~509~~45,~~000~~792 over last year.

~~Investing~~During ~~activities for~~ the year ended October 31, ~~2009~~2010, ~~consisted~~the ~~mainly~~Company ofdecreased the ~~purchases~~tax ofNOL ~~property~~carryforward ~~and~~by ~~equipment~~$2,120,000 resulting in an increase in the deferred tax accounts of $31,~~789~~460,~~826~~000.

~~For~~Investing activities for the year ended October 31, ~~2009~~2010, ~~net~~consisted ~~cash~~mainly ~~used~~of inthe ~~financing~~purchases ~~activities was $1,780,307, which includes new funds made available from notes payable~~ of ~~$3,654,048~~property and ~~proceeds~~equipment ~~from a lending institution line~~ of ~~credit of~~ $~~748~~4,~~875. The subsequent use of these funds were primarily towards notes payable of $5~~760,~~716,041,~~576 ~~the payment of preferred stock dividends of $270,977~~ and the ~~redemption~~sale of ~~$182,080~~one ~~of Preferred Stock in the Company. All Alpine Air~~ aircraft ~~are~~for ~~currently pledged as collateral on the line of credit~~$1, ~~notes payable and preferred stock of the Company~~137,020.

For the year ended October 31, ~~2008~~2010, net cash ~~received~~used ~~from~~in financing activities was $~~445~~2,~~448~~452,685, which ~~includes~~included ~~new~~ funds made available from a new note payable in the amount of $41,~~000~~922,~~000~~769. ~~and~~The subsequent use ~~primarily~~of ~~from~~these ~~payments~~funds was the retiring of $12,~~459~~922,~~580~~199 ~~towards~~of ~~notes~~long-term ~~payable~~debt, the repayment of a line of credit in the amount of $758,875, the payment of preferred stock dividends of $688,647, and the redemption of $15,~~456,640~~733 of ~~Preferred~~Common Stock inof the Company.

For the years ended October 31, ~~2009~~2010 and ~~2008~~2009, net increases ~~(uses)~~ in cash and cash equivalents were $~~297~~143,~~142~~387 and $~~(468~~297,~~035)~~142, and ending cash and cash equivalents were $1,~~192~~336,~~936~~323 and $~~895~~1,~~794~~192,936, respectively.

~~Results~~Cash ~~of Operation.~~Requirements

~~During~~The ~~the~~following ~~year~~table ~~ended~~summarizes ~~October 31, 2009 total operating revenues were $20,464,409, representing a 3% increase from~~ the ~~2008~~Company’s ~~revenues~~contractual ofobligations ~~$19,840,376. This~~as ~~increase is attributable to the leasing~~ of ~~two~~October ~~Beechcraft 1900-D passenger aircraft. Total direct costs decreased to $15~~31,~~733,309~~ ~~from $16,378,631 for the years 2009 and 2008, respectively. This 4% decrease in total direct costs was driven by management’s efforts to reduce costs and operate more efficiently.~~2010:

Alpine's revenue from Public Services which include its First Officer Training Program and aircraft maintenance provided to outside entities decreased in 2009 to $142,243 from $204,494 in 2008, while expenses for public services slightly decreased to $215,412 from $216,254 in 2008.


		Total		One Year		2-5 Years		After 5 Years

Long-term debt principal	$	7,774,354	$	1,049,000	$	5,055,493	$	1,669,861
Capital leases principal		794,981		237,000		557,981		-
Interest payments		1,839,905		563,194		1,225,466		51,245
Operating leases		444,615		51,171		142,976		250,468
Dividend payment of preferred shares*		2,507,091		485,243		2,021,848		*
Total	$	13,360,946	$	2,385,608	$	9,003,764	$	1,971,574

~~Operating~~*Redemption ~~expenses~~and/or ~~increased~~conversion toof ~~$2,180,645~~preferred ~~from~~shares ~~$1,525,241~~assumed ~~for~~completed ~~the~~by ~~years~~year ~~ended~~2015 ~~October~~through ~~31,~~future ~~2009~~cash ~~and~~flows ~~2008,~~generated ~~respectively. This~~by ~~increase~~profits ~~was~~from ~~due~~Company ~~mainly~~operations, asale ~~large~~of ~~increase~~excess inaircraft, ~~bad~~or additional debt ~~expense~~borrowings. ofAll ~~$312,359~~preferred ~~and~~shares ~~increases~~are inowned ~~professional~~by ~~accounting,~~the ~~consulting,~~Company’s ~~and~~current ~~legal~~CEO ~~expenses~~and ofmajority ~~$120,781~~shareholder. ~~The~~Currently ~~increase~~loan incovenants ~~bad~~with ~~debt~~a ~~expense~~lender ~~was~~restrict ~~due~~the ~~mainly~~redemption toand apayment ~~large one-time write off~~ of ~~claims~~preferred ~~with~~dividends unless the USCompany ~~Postal~~maintains ~~Service.~~minimum ~~During~~net ~~the~~worth ~~year~~of ~~ended October 31~~$13,800,000 ~~2009~~ and ~~2008,~~debt ~~gain~~service oncoverage ~~disposal~~ of ~~assets~~1.25 ~~was~~to ~~$907 and $499,623, respectively~~1. 00.

~~During~~Future ~~the~~Capital year ended October 31, 2009, other expense was $922,351 compared to the previous year total of $625,014. The increase was the direct result of additional interest paid by the Company due to additional financing, a loss on heating oil investments, and a decrease in interest income. Expenditures

~~Total~~The ~~income~~Company ~~tax~~as ~~expense~~of ~~for~~December ~~the~~31, ~~year~~2010 ~~ended~~had ~~October~~an ~~31,~~open ~~2009~~commitment ~~and~~to ~~2008~~purchase ~~was~~one additional Beechcraft 99 aircraft in the amount of $~~509~~350,000 and one additional Beechcraft 1900C aircraft for $~~434~~500,~~812,~~000. ~~respectively~~These additional aircraft will be used in the Company’s aircraft operations.

~~For~~Results the year ended October 31, 2009 and 2008, income before preferred dividends was $1,120,011 and $1,376,301, or $0.03 per share and $0.04 per share, respectively. For the same periods net income available to shareholders was $544,599 and $120,193, or $0.02 per share and $0.00 per share, respectively. The difference for both years presented is approximately $575,412 and $1,256,108, respectively ($0.01 and $0.02 per share, respectively), which is related to dividends declared on preferred stock and the amortization of ~~a preferred stock discount analogous to a preferred stock dividend~~Operations. ~~The amortization portion of the preferred stock discount ended in December 2008.~~

Operating Revenue

During the year ended October 31, 2010 total operating revenues were $20,118,724, representing a 1.7% decrease compared to 2009 revenues of $20,464,409. The following tables summarize Alpine Air’s operating revenue and associated percentage-of-change for the periods indicated.


		2010		2009	2010 over 2009 Change
Operating Revenue:
Operations
Mail revenue	$	13,851,828	$	13,366,226	4%
Contract cargo revenue and ad-hoc charters		4,705,895		5,730,000	(18)%
Aircraft leasing		1,507,472		1,225,940	23%
Total operations		20,065,195		20,322,166	(1)%
Public services
First officer		38,481		18,918	103%
Maintenance		15,048		123,325	(88)%
Total public services		53,529		142,243	(62)%
Total operating revenue	$	20,118,724	$	20,464,409	(2)%


	2010	2009	2009 over 2008 Change
Operating Revenue:
Operations
Mail revenue	69%	65%	4%
Contract cargo revenue and ad-hoc charters	23%	28%	(5)%
Aircraft leasing	8%	6%	2%
Total operations	100%	99%	1%
Public services
First officer	<1%	<1%	-
Maintenance	<1%	1%	(1)%
Total public services	<1%	1%	(1)%
Total operating revenue	100%	100%

Direct Costs

Total direct costs decreased to $14,149,394 from $15,733,309 for the years ending October 31, 2010 and 2009, respectively. This decrease is mainly due to a decrease in direct labor and benefit costs, decrease in aircraft insurance, and a decrease of $676,929 in aircraft lease expense. Fuel expense increased due to an overall increase in aviation fuel prices across the country and aircraft lease expenses decreased due to the ending of several sale/leaseback agreements. Depreciation and amortization expense for the year ended October 31, 2010 increased to $3,295,107 from $3,163,137 during 2009. This increase was due to additional depreciation on one new aircraft

acquired at the beginning of 2010 and from major engine and airframe component overhauls capitalized in 2010. The following table summarizes Alpine Air’s direct costs and the associated percentages-of-change for the periods indicated.


		2010		2009	2010 over 2009 Change
Direct Costs:
Operations
Depreciation and amortization	$	3,295,107	$	3,163,137	4%
Other direct costs		10,680,383		12,354,760	(14)%
Total operations		13,975,490		15,517,897	(10)%
Public services
Total public services		173,904		215,412	(19)%
Total direct costs	$	14,149,394	$	15,733,309	(10)%

Operating Expenses

Operating expenses decreased to $1,989,749 from $2,180,645 for the years ended October 31, 2010 and 2009, respectively. This decrease was due mainly to labor and benefit cost reductions. Consulting expenses, legal expenses, and professional accounting expenses decreased during 2010. The Company experienced an increase in fines and penalties during 2010 of $223,105. The following table summarizes Alpine Air’s operating expenses and the associated percentages-of-change for the periods indicated.


		2010		2009	2010 over 2009 Change
Operating Expenses:
General and administrative	$	1,989,749	$	2,180,645	(9)%
Total operating expenses		1,989,749		2,180,645	(9)%

Interest Income

Interest income for the year ended October 31, 2010 decreased to $12,537 from the amount at October 31, 2009 of $18,451. This decrease in interest income for 2010 is due to a reduction of cash in interest bearing accounts and general overall low interest rates for such accounts.

Interest Expense

Total interest expense for the year ended October 31, 2010 and 2009 was $918,717 and $857,184, respectively. This increase in interest expense is due primarily to the Company paying an interest penalty of $191,928 for the early termination of a capital lease. This lease was refinanced in 2010 to a note payable with more favorable terms.

Gain on Disposal of Assets

Gain on disposal of assets for the year ended October 31, 2010 increased to $427,236 from $907 as of October 31, 2009. During 2010, the Company sold a Beechcraft 1900 aircraft that resulted in a gain of $441,595.

Other Expenses

Other expenses for the year ending October 31, 2010 was $0 compared to $83,618 for the year ending October 31, 2009. The 2009 other expenses are due to a realized loss from heating oil investments that were sold in 2009. The Company did not own any heating oil investments in 2010.

Income Tax Expense

Current income tax expense for the year ended October 31, 2010 and 2009 was $115,000 and $0, respectively. The provision for deferred income tax expense for the year ended October 31, 2010 and 2009 was $1,460,000 and $509,000, respectively. The increase in deferred income tax as a percentage of income before taxes of 41.7% in 2010 and 31.2% in 2009 was due primarily to an expiration of $120,000 of capital loss carryfoward.

Net Income

For the year ended October 31, 2010 and 2009, income before preferred dividends was $1,925,637 and $1,120,011, or $0.05 per share and $0.03 per share, respectively. For the same periods net income available to shareholders was $1,440,394 and $544,599, or $0.04 per share and $0.02 per share, respectively. The difference for both years presented is $485,243 and $575,412, respectively ($0.01 and $0.01 per share, respectively), which is related to dividends declared on preferred stock and the amortization of a preferred stock discount analogous to a preferred stock dividend. The amortization portion of the preferred stock discount ended in December 2008.

Critical Accounting Policies and Estimates.

The preparation of the Company's financial statements in conformity with accounting principles generally accepted in the U.S. requires the use of estimates and assumptions to determine certain assets, liabilities, revenues and expenses. Management bases these estimates and assumptions upon the best information available at the time of the estimates or assumptions. The Company's estimates and assumptions could change materially as conditions within and beyond our control change. Accordingly, actual results could differ materially from estimates. The most significant estimates made by management include allowance for doubtful accounts receivable, reserves for excess and obsolete inventories, deferred tax asset valuation, and valuation of long-lived assets.

Following is a discussion of critical accounting policies and related management estimates and assumptions.

Allowance for Doubtful Accounts. An allowance for doubtful accounts receivable in the amount of $6633,~~530~~577 and $2266,~~540~~530, respectively, as of October 31, ~~2009~~2010 and ~~2008~~2009, and was established based on management's estimates of the collectability of accounts receivable. The required allowance is determined using information such as customer credit history, industry information, credit reports, customer financial condition and the collectability of outstanding accounts receivables associated with a discontinued business segment. The estimates can be affected by changes in the financial strength of the aviation industry, customer credit issues or general economic conditions.

Inventories. The Company's parts inventories are valued at the lower of cost or market. Reserves for excess and obsolete inventories in the amount of $5216,~~523~~609 and $52,~~525~~523, respectively, as of October 31, ~~2009~~2010 and ~~2008~~2009, are based on assessment of the marketability of slow-moving and obsolete inventories. Estimates are subject to volatility and can be affected by reduced equipment utilization, existing supplies of used inventory available for sale, the retirement of aircraft or ground equipment and changes in the financial strength of the aviation industry.

Deferred Taxes. The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered based primarily on estimates of current and expected future earnings. Net deferred tax liability of $~~349~~1,809,000 existed as of October 31, ~~2009~~2010 and net deferred tax assets of $~~160~~349,000 existed as of October 31, ~~2008~~2009.

Revenue Recognition. Cargo revenue is recognized upon completion of contract terms and maintenance revenue is recognized when the service has been performed.

Valuation of Long-Lived Assets. The Company assesses long-lived assets used in operations for impairment when events and circumstances indicate the assets may be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amount. In the event it is determined that the carrying values of long-lived assets are in excess of the fair value of those assets, the Company then will write-down the value of the assets to fair value.

Off-Balance Sheet Arrangements.

None; not applicable.

Safe Harbor Statement.

Statements made in this Form 10-K which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of the Company, including, without limitation, (i) our ability to retain existing commercial relationships and to obtain additional profitable sources of revenue, and (ii) statements preceded by, followed by or

and business of the Company, including, without limitation, (i) our ability to retain existing commercial relationships and to obtain additional profitable sources of revenue, and (ii) statements preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company's control) that could cause actual results to differ materially from those set forth in the forward- looking statements, including the following, in addition to those contained in the Company's reports on file with the SEC: general economic or industry conditions, nationally and/or in the communities in which the Company conducts business, legislation or regulatory requirements, the economic condition of the U.S. Postal Service or United Parcel Service, changes in the air cargo, charter and leasing industries, demand for air cargo, charter and leasing services, competition, changes in the quality or composition of the Company's services, our ability to develop profitable new sources of revenue, changes in accounting ~~principals~~principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting the Company's operations, services and prices.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable for smaller reporting companies.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ALPINE AIR EXPRESS, INC.

CONSOLIDATED FINANCIAL STATEMENTS

October 31, ~~2009~~2010 and ~~2008~~2009

ALPINE AIR EXPRESS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, ~~2009~~2010 and ~~2008~~2009

CONTENTS

	PAGE
Report of Independent Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm	2 3
Report of Independent Registered Public Accounting Firm	2
Consolidated Balance Sheets at October 31, 2009 and 2008	4
Consolidated Balance Sheets at October 31, 2010 and 2009	3
Consolidated Statements of Income for the years ended October 31, 2009 and 2008	5
Consolidated Statements of Income for the years ended October 31, 2010 and 2009	4
Consolidated Statement of Stockholders' Equity for the years ended October 31, 2009 and 2008	6 – 7
Consolidated Statements of Stockholders' Equity for the years ended October 31, 2010 and 2009	5
Consolidated Statements of Cash Flows for the years ended October 31, 2009 and 2008	8 - 9
Consolidated Statements of Cash Flows for the years ended October 31, 2010 and 2009	6 - 7
Notes to Consolidated Financial Statements	108 - 1817

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors ~~and Stockholders~~andStockholders of Alpine Air Express, Inc.

We have audited the accompanying consolidated balance ~~sheet~~sheets of Alpine Air Express, Inc. as of October 31, 2010 and 2009, and the related consolidated statements of income, stockholders’ equity, and cash flows for the ~~year~~years ended October 31, 2010 and 2009. Alpine Air Express, Inc.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our ~~audit~~audits.

We conducted our ~~audit~~audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the ~~audit~~audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The ~~company~~Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our ~~audit~~audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the ~~company~~Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our ~~audit~~audits ~~provides~~provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Alpine Air Express, Inc. as of October 31, 2010 and 2009, and the results of its operations and its cash flows for the ~~year~~years ended October 31, 2010 and 2009 in conformity with accounting principles generally accepted in the United States of America.

/s/Jones Simkins, P.C.

JONES SIMKINS, P.C.

~~January 29~~Logan, ~~2010~~Utah

January 20, 2011

The accompanying notes are an integral part of these consolidated financial statements.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

ALPINE AIR EXPRESS, INC. AND SUBSIDIARY

Provo, Utah

We have audited the accompanying balance sheet of Alpine Air Express, Inc. and Subsidiary as of October 31, 2008 and the related statements of operations, stockholders' equity and cash flows for the year ended October 31, 2008. Alpine Air Express, Inc. and Subsidiary’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Alpine Air Express, Inc. and Subsidiary as of October 31, 2008 and the results of its operations and its cash flows for the year ended October 31, 2008 in conformity with accounting principles generally accepted in the United States of America.

As described in Note 18 to the financial statements, the financial statements for the year ended October 31, 2008 has been restated to correct errors in the reporting of current and deferred income tax expense and the recording of deferred tax assets.

/s/Pritchett Siler & Hardy, P.C.

PRITCHETT, SILER & HARDY, P.C.

Salt Lake City, Utah

January 28, 2009, except for Notes 14 and 18

as to which the date is January 26, 2010

ALPINE AIR EXPRESS, INC.

CONSOLIDATED BALANCE SHEETS

October 31, ~~2009~~2010 and ~~2008~~2009

ASSETS

	2009		2008
	2010		2009
CURRENT ASSETS:
Cash and cash equivalents	$	~~992~~1,~~241~~129,890	$ ~~720~~992,~~794~~241
Trade accounts receivable, net		1,~~468~~601,~~854~~287	21,~~254~~468,~~241~~854
Inventories		1,~~850~~899,~~486~~293	1,~~795~~850,~~119~~486
Prepaid expenses		~~253~~423,~~399~~001	~~658~~253,~~874~~399
Deposits Cash value life insurance Income taxes receivable		6438,~~549~~575 8085,~~550~~572 ~~324~~16,100	8664,~~667~~549 7080,~~005~~550 ~~23,894~~324
Deferred tax asset, current Other current assets		271,000 -	133,000 80,082
Deferred tax asset, current		138,000	271,000
Total current assets		45,~~981~~331,~~403~~718	54,~~822~~981,~~676~~403
PROPERTY AND EQUIPMENT, NET RESTRICTED CASH		2122,~~235~~125,~~497~~782 ~~200~~206,~~695~~433	1921,~~389~~235,~~082~~497 ~~175~~200,~~000~~695
OTHER ASSETS, NET		~~142~~119,~~629~~491	-142,629
DEFERRED TAX ASSETS		-	27,000
Total assets	$	27,783,424	$ 26,560,224
Total assets	$	26,560,224	$ 25,413,758

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade accounts payable	$	~~991~~506,~~513~~673	$ 1991,~~074,971~~513
Accrued liabilities Dividends payable		~~837~~1,~~229~~143,751 ~~244~~41,~~616~~212	~~925~~837,~~458~~229 29244,~~961~~616
Deferred revenue		~~120~~98,~~037~~457	11120,~~148~~037
Line of credit		~~276,021~~-	-276,021
Current portion of long-term debt		1,~~842~~286,000	1,~~941~~842,~~676~~000
Total current liabilities		43,~~311~~076,~~416~~093	34,~~983~~311,~~214~~416
DEFERRED GAIN ON SALE OF ASSETS		-	95,997
DEFERRED TAX LIABILITY LINE OF CREDIT		1,947,000 -	620,000 472,854
DEFERRED TAX LIABILITY LINE OF CREDIT		620,000 472,854	- -
LONG-TERM DEBT, net of current portion		7,283,335	7,147,937
LONG-TERM DEBT, net of current portion		7,147,937	7,836,932
Total liabilities		12,306,428	12,552,207
Total liabilities		12,552,207	11,916,143
PREFERRED STOCK, $.001 par value, $9.104 stated value, 1,000,000 shares authorized, 820,000 shares issued and outstanding.		7,465,280	7,465,280
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, $9.104 stated value, 1,000,000 shares authorized, 820,000 and 840,000 shares, respectively, issued and outstanding, net of discount of $0.00 and $89,780, respectively.		7,465,280	7,557,580
Common stock, $.001 par value, 100,000,000 shares authorized, 36,130,141 and 36,271,461 shares, respectively, issued and outstanding.		36,130	36,271
Common stock, $.001 par value, 100,000,000 shares authorized, 36,271,461 shares issued and outstanding.		36,271	36,271
Additional paid-in capital		2,446,080	2,457,550
Additional paid-in capital		2,457,550	2,385,315
Retained earnings		5,535,239	4,094,845
Retained earnings		4,094,845	3,550,246
		8,017,449	6,588,666
		14,053,946	13,529,412
Less treasury stock, 70,660 and 141,320 shares at cost, respectively		(5,733)	(45,929)
Less treasury stock, 141,320 and 70,660 shares at cost, respectively		(45,929)	(31,797)
Total stockholders’ equity		8,011,716	6,542,737
Total stockholders’ equity		14,008,017	13,497,615
Total liabilities, preferred stock, and stockholders’ equity	$	27,783,424	$ 26,560,224
Total liabilities and stockholders’ equity	$	26,560,224	$ 25,413,758

The accompanying notes are an integral part of these consolidated financial statements.

ALPINE AIR EXPRESS, INC.

CONSOLIDATED STATEMENTS OF INCOME

Years Ending October 31, ~~2009~~2010 and ~~2008~~2009

	2009			2008
	2010			2009
OPERATING REVENUE:
Operations		$	20,~~322~~065,~~166~~195		$	1920,~~635~~322,~~882~~166
Public services			~~142~~53,~~243~~529			~~204~~142,~~494~~243
Total operating revenues			20,~~464~~118,~~409~~724			1920,~~840~~464,~~376~~409
DIRECT COSTS:
Operations			1513,~~517~~975,~~897~~490			1615,~~162~~517,~~377~~897
Public services			~~215~~173,~~412~~904			~~216~~215,~~254~~412
Total direct costs			1514,~~733~~149,~~309~~394			1615,~~378~~733,~~631~~309
Gross profit			45,~~731~~969,~~100~~330			34,~~461~~731,~~745~~100
OPERATING EXPENSES:
General and administrative			21,~~180~~989,~~645~~749			12,~~525~~180,~~241~~645
Total operating expenses			21,~~180~~989,~~645~~749			12,~~525~~180,~~241~~645
Operating income			23,~~550~~979,~~455~~581			12,~~936~~550,~~504~~455
OTHER INCOME (EXPENSE):
Interest income			1812,~~451~~537			4818,~~381~~451
Interest expense Gain on disposal of assets Other			(~~857~~918,~~184~~717) ~~907 (83~~427,~~618)~~236 -			(~~673~~857,~~395~~184) ~~499,623~~907 -(83,618)
Total other income (expense)			(~~921~~478,~~444~~944)			(~~125~~921,~~391~~444)
INCOME BEFORE TAXES AND PREFERRED STOCK DIVIDEND			13,~~629~~500,~~011~~637			1,~~811~~629,~~113~~011
Current income tax expense			-115,000			-
Deferred income tax expense			~~509~~1,460,000			~~434~~509,~~812~~000
NET INCOME			1,~~120~~925,~~011~~637			1,~~376~~120,~~301~~011
Preferred stock dividend declared and amortization of preferred stock discount analogous to a preferred stock dividend.			(575,412)			(1,256,108)
Preferred stock dividend declared			(485,243)			(575,412)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		$	~~544~~1,~~599~~440,394		$	~~120~~544,~~193~~599
NET INCOME PER COMMON SHARE
Basic		$	0.0204		$	0.0002
Diluted		$	0.01		$	0.0001

The accompanying notes are an integral part of these consolidated financial statements.

ALPINE AIR EXPRESS, INC.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS'’ EQUITY

Years Ending October 31, ~~2009~~2010 and ~~2008~~2009

	Preferred Stock					Preferred Stock			Common Stock
		Common Stock Shares			Common Stock Amount			Additional Paid-in Capital			Treasury Stock			Retained Earnings		Total
	Shares		Amount			Discount			Shares			Amount
Balance at November 1, 2008		36,271,461		$	36,271		$	2,385,315		$	(31,797)		$	3,550,246	$	5,940,035
Balance at November 1, 2007	1,000,000		$	9,104,000		$	(808,019)			36,271,461	$		36,271
Net income		-			-			-			-			1,120,011		1,120,011
Net income	-			-			-			-			-
Dividends declared		-			-			-			-			(575,412)		(575,412)
Redemption of preferred stock	(160,000)			(1,456,640)			-			-			-
Stock compensation expense		-			-			72,235			-			-		72,235
Dividends declared and amortization of preferred stock discount analogous to a preferred stock dividend	-			-			718,239			-			-
Purchase of treasury stock		-			-			-			(14,132)			-		(14,132)
Stock compensation expense	-			-			-			-			-
Balance at October 31, 2009		36,271,461		$	36,271		$	2,457,550		$	(45,929)		$	4,094,845	$	6,542,737
Purchase of Treasury stock	-			-			-			-			-
Net income		-			-			-			-			1,925,637		1,925,637
Balance at October 31, 2008	840,000		$	7,647,360		$	(89,780)			36,271,461		$	36,271
Dividends declared		-			-			-			-			(485,243)		(485,243)
Net income	-			-			-			-			-
Stock compensation expense		-			-			34,318			-			-		34,318
Redemption of preferred stock	(20,000)			(182,080)			-			-			-
Purchase of treasury stock Retirement of treasury stock		- (141,320)			- (141)			- (45,788)			(5,733) 45,929			- -		(5,733) -
Dividends declared and amortization of preferred stock discount analogous to a preferred stock dividend	-			-			89,780			-			-
Balance at October 31, 2010		36,130,141		$	36,130		$	2,446,080		$	(5,733)		$	5,535,239	$	8,011,716
Stock compensation expense	-			-			-			-			-
Purchase of treasury stock	-			-			-			-			-
Balance at October 31, 2009	820,000		$	7,465,280		$	-			36,271,461		$	36,271

(continued)

The accompanying notes are an integral part of these consolidated financial statements.

ALPINE AIR EXPRESS, INC.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF ~~STOCKHOLDERS'~~CASH ~~EQUITY~~FLOWS

Years Ending October 31, ~~2009~~2010 and ~~2008~~2009

	Additional Paid-in Capital		Treasury Stock			Retained Earnings			Accumulated Total
	2010				2009
Balance at November 1, 2007	$2,350,103			-			$3,430,053	$		14,112,408
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	-$	1,925,637		-$		1,120,011	~~1,376,301~~			~~1,376,301~~
Redemption of preferred stock	-			-			-			(1,456,640)
Adjustments to reconcile net income to net cash provided by operating activities:
Dividends declared and amortization of preferred stock discount analogous to a preferred stock dividend	-			-			(1,256,108)			(537,869)
Gain on disposal of assets Deferred gain amortization		(427,236) -				(907) (95,997)
Stock compensation expense	35,212			-			-			35,212
Deferred tax expense		1,460,000				509,000
Purchase of treasury stock	-			(31,797)			-			(31,797)
Depreciation and amortization		3,295,107				3,163,137
Balance at October 31, 2008	$2,385,315		$	(31,797)			$3,550,246	$		13,497,615
Stock based compensation		34,318				72,235
Net income	-			-			1,120,011			1,120,011
Provision for losses on accounts receivable Provision for inventory obsolescence		(32,954) (35,914)				43,990 (2)
Redemption of preferred stock	-			-			-			(182,080)
Changes in operating assets and liabilities:
Dividends declared and amortization of preferred stock discount analogous to a preferred stock dividend	-			-			(575,412)			(485,632)
Trade accounts receivable		(148,301)				741,397
Stock compensation expense	72,235			-			-			72,235
Other assets		30,000				10,082
Purchase of treasury stock	-			(14,132)			-			(14,132)
Inventories		(12,893)				(55,365)
Balance at October 31, 2009	$2,457,550		$	(45,929)		$	4,094,845	$		14,008,017
Income taxes receivable Prepaid expenses		(15,776) 301,898				23,570 383,329
Trade accounts payable Accrued liabilities Deposits		(484,840) 306,522 50,262				(83,458) (85,559) 22,118
Deferred revenue		(21,580)				108,889
Net cash provided by operating activities		6,224,250				5,876,470
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment		1,137,420				1,350
Purchases of property and equipment		(4,760,576)				(3,789,826)
Cash proceeds from reduction in surrender value of life insurance		(5,022)				(10,545)
Net cash used in investing activities		(3,628,178)				(3,799,021)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on long-term debt Payment on dividends payable		(2,922,199) (688,647)				(5,716,041) (270,977)
Payment for redemption of preferred stock Purchase of treasury stock		- (5,733)				(182,080) (14,132)
Change in line of credit Proceeds from related party line of credit		(758,875) -				748,875 200,000
Principal payments on related line of credit Proceeds from long-term debt		- 1,922,769				(200,000) 3,654,048
Net cash used in financing activities		(2,452,685)				(1,780,307)
Net change in cash and cash equivalents		143,387				297,142
BEGINNING CASH AND CASH EQUIVALENTS		1,192,936				895,794
ENDING CASH AND CASH EQUIVALENTS	$	1,336,323		$		1,192,936

The accompanying notes are an integral part of these consolidated financial statements.

ALPINE AIR EXPRESS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

Years Ending October 31, 2009 and 2008

	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,120,011	$		1,376,301
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposal of assets Deferred gain amortization		(907) (95,997)			(499,623) (174,728)
Deferred tax expense		509,000			434,812
Depreciation and amortization		3,163,137			2,218,710
Stock based compensation		72,235			35,212
Provision for losses on accounts receivable Provision for inventory obsolescence		43,990 (2)			3,150 5,036
Changes in operating assets and liabilities:
Trade accounts receivable		741,397			(248,683)
Other assets		10,082			(80,082)
Inventories		(55,365)			(415,815)
Income taxes receivable Prepaid expenses		23,570 383,329			(23,292) (101,540)
Trade accounts payable Accrued liabilities Deposits		(83,458) (85,559) 22,118			174,389 340,950 (76,537)
Deferred revenue		108,889			(5,844)
Net cash provided by operating activities		5,876,470			2,962,416
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment		1,350			1,889,870
Purchases of property and equipment		(3,789,826)			(5,695,764)
Cash proceeds from reduction in surrender value of life insurance		(10,545)			(70,005)
Net cash used in investing activities		(3,799,021)			(3,875,899)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on long-term debt Payment on dividends payable		(5,716,041) (270,977)			(1,459,580) (606,535)
Payment for redemption of preferred stock Purchase of treasury stock		(182,080) (14,132)			(1,456,640) (31,797)
Change in line of credit Proceeds from related party line of credit		748,875 200,000			- -
Principal payments on related line of credit Proceeds from long-term debt		(200,000) 3,654,048			- 4,000,000
Net cash provided by (used in) financing activities		(1,780,307)			445,448
Net change in cash and cash equivalents		297,142			(468,035)
BEGINNING CASH AND CASH EQUIVALENTS		895,794			1,363,829
ENDING CASH AND CASH EQUIVALENTS	$	1,192,936	$		895,794

The accompanying notes are an integral part of these consolidated financial statements.

ALPINE AIR EXPRESS, INC

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CASH FLOWS

Years Ending October 31, ~~2009~~2010 and ~~2008~~2009

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

		2009		2008
		2010		2009
Cash paid during the year for:
Interest	$	~~857~~918,~~184~~717	$	~~625~~857,~~014~~184
Income taxes	$	-131,000	$	-

For the year ended October 31, 2010:

The Company increased other assets as a result of the capitalization of debt issuance costs of $93,040.

Exchanged accounts receivable for property and equipment of $48,822.

Increased lease deposit by $24,288 through the issuance of debt.

Increased prepaid aircraft insurance by issuing $471,500 of debt.

Retired $45,929 of treasury stock.

Refinanced $4,267,962 of long-term debt.

For the year ended October 31, 2009:

The Company recorded the amortization of a preferred stock dividend and reduced retained earnings by $89,780.

The Company acquired property and equipment in exchange for long-term debt of $1,200,000.

The Company capitalized debt issuance costs of $70,652.

For the year ended October 31, 2008:

The Company redeemed 160,000 shares of Preferred Stock with a value of $9.104 per share, for a total of $1,456,640 in cash.

The Company had preferred dividend expense of $1,256,108 which is comprised of $537,868 in dividends and $718,240 of amortized discount on preferred stock analogous to a preferred stock dividend.

The Company purchased 70,660 shares of its own stock to hold as Treasury Stock. Total value of $31,797.

As required by ASC Topic 718, the Company has established the amortization of the value of Stock Options issued during the year. Total cost recorded this year is $35,212 which is a non-cash item.

The accompanying notes are an integral part of these consolidated financial statements.

ALPINE AIR EXPRESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Alpine Air Express, Inc. (the "Company") is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (USGAAP) and have been consistently applied in the preparation of the consolidated financial statements.

Organization and business description - Alpine Aviation, Inc. (Alpine) was incorporated in the state of Utah on October 7, 1975. On June 12, 2000 Alpine entered into a transaction that was accounted for as a reverse merger with Riverside Ventures, Inc., a Delaware corporation incorporated on April 20, 1994. At the time of the transaction, Riverside Ventures, Inc. was inactive. All of the outstanding common stock of Alpine was exchanged for 29,685,000 shares of common stock of Riverside Ventures, Inc. The transaction, accounted for as a reverse acquisition, resulted in a recapitalization of Alpine, inasmuch as it was deemed to be the acquiring entity for accounting purposes. Riverside Ventures, Inc. changed its name to Alpine Air Express, Inc. The Company is an air cargo operator, transporting mail, packages and other time-sensitive cargo between cities in the western portion of the United States.

Principles of consolidation – The consolidated financial statements include the accounts and operations of Alpine Air Express, Inc., and its wholly-owned subsidiary Alpine Aviation, Inc. as of October 31, ~~2009~~2010 and ~~2008~~2009 (together referred to as the Company). All material inter-company transactions and accounts have been eliminated in the consolidation.

Cash and cash equivalents - The Company considers demand deposits at banks and money market funds at other financial institutions with an original maturity of three months or less to be cash equivalents.

Restricted cash - At October 31, ~~2009~~2010 and ~~2008~~2009, the Company had two restricted cash time deposits totaling $~~200~~206,~~695~~433 and $~~175~~200,~~000~~695, respectively, held as collateral for debt and property leases of a third party.

Concentration of credit risk – The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

Trade accounts receivable – Accounts receivable are amounts due for services performed and are unsecured. Accounts receivable are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis; thus accounts receivable do not bear interest although a finance charge may be applied to such receivables that are past the due date. Accounts receivable are periodically evaluated for ~~collectibility~~collectability based on past credit history with clients. Provisions for losses on accounts receivable are determined on the basis of loss experience, ~~know~~known and inherent risk in the account balance, and current economic conditions.

Inventories - Inventories consist of aircraft parts and fuel stated at the lower of cost or market, determined using the first-in, first-out method (FIFO).

Property and equipment - Provision for depreciation for financial reporting purposes of property and equipment is computed on the straight-line method over their estimated useful lives ranging from three to forty years. Maintenance, repairs, and renewals, which neither materially add to the value of the property and equipment nor appreciably prolong the useful lives are charged to expense as incurred. Gains and losses on dispositions are included in operations.

Engine overhauls - The Company uses the deferral method of accounting for our major engine and airframe component overhauls and provides for major engine and airframe component overhaul costs to be capitalized and depreciated ~~over~~to the ~~estimated~~next ~~useful~~overhaul ~~life~~on ~~of the~~ engine and airframe components.

Impairment of long-term assets - The Company reviews all long-term assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable through undiscounted future cash flows. If an impairment loss has occurred, such loss is recognized in the determination of net income.

108

ALPINE AIR EXPRESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]

Income taxes - The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the difference between financial accounting and tax bases of assets and liabilities using enacted tax rates in effect during the years in which the differences are expected to reverse. An allowance against deferred tax assets is recorded in whole or in part when it is more likely than not that such tax benefits will not be realized.

~~method,~~The ~~deferred~~Company ~~tax~~considers ~~assets~~many factors when evaluating and ~~liabilities~~estimating ~~are~~its ~~determined~~tax ~~based~~positions onand ~~the~~tax ~~difference~~benefits. ~~between~~Tax ~~financial~~positions ~~accounting~~are ~~and~~recognized ~~tax~~only ~~bases~~when ofit ~~assets~~is ~~and~~more ~~liabilities~~likely ~~using~~than ~~enacted~~not ~~tax~~(likelihood ~~rates~~of ingreater ~~effect~~than ~~during~~50%), ~~the~~based ~~years~~on intechnical ~~which~~merits, that the ~~differences~~positions ~~are~~will ~~expected~~be tosustained ~~reverse~~upon examination. An ~~allowance~~Reserves ~~against~~are ~~deferred~~established ~~tax~~if ~~assets~~it is ~~recorded~~believed incertain ~~whole~~positions ormay inbe ~~part~~challenged ~~when~~and itpotentially isdisallowed. ~~more~~If ~~likely~~facts ~~than~~and ~~not~~circumstances ~~that~~change, ~~such~~reserves ~~tax~~are ~~benefits~~adjusted ~~will~~through ~~not~~income betax ~~realized~~expense. The Company recognizes ~~accrued~~ interest expense and penalties related to unrecognized tax benefits in ~~interest~~the ~~expense~~provision ~~and~~for ~~penalties~~income ~~as an other expense~~taxes.

Use of estimates - In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates.

Fair value of financial instruments - Cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities are reflected in the financial statements at fair value because of the short-term maturity of these instruments.

Income per common share - The Company follows the provisions of ASC Topic 260 "Earnings Per Share". ASC Topic 260 requires the presentation of basic and diluted ~~earning~~earnings per share. Basic earnings per share are calculated by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are similarly calculated, except that the weighted-average number of common shares outstanding includes common shares that may be issued subject to existing rights with dilutive potential. Potential common shares having an anti-dilutive effect on periods presented are not included in the computation of dilutive earning per share.

Revenue and cost recognition - The Company utilizes the accrual method of accounting whereby revenue is recognized when earned. Air freight revenue is recognized upon delivery of cargo to its destination. Public services revenue consists of charter income, pilot training fees, and customer maintenance services. Charter income and customer maintenance services income is recognized when the service is performed. Pilot training revenue is recognized over the course of the program, based on the pro rata share of the course completed to date. Tuition revenue received, but not yet earned, is deferred.

Recently Enacted Accounting Standards –The ~~ASC~~Company’s ~~Topic~~management ~~820, “Fair~~has ~~Value~~evaluated ~~Measurements”,~~the ~~ASC~~recently ~~Topic~~issued ~~825,~~accounting ~~“Financial~~pronouncements ~~Instruments”,~~through ~~ASC~~the ~~Topic~~filing ~~810, “Consolidation”,~~date ~~ASC~~of ~~Topic~~these ~~815,~~financial ~~“Derivatives~~statements and ~~Hedging”,~~has ~~and~~determined ~~ASC~~that ~~Topic~~the ~~944,~~application ~~“Financial~~of ~~Services”,~~these ~~were~~pronouncements ~~recently~~will ~~issued. These topics~~ have no ~~current~~material ~~applicability~~impact toon the Company’s ~~or their effect on the~~ financial ~~statements~~position ~~would~~and ~~not~~results ~~have~~of ~~been significant~~operations.

The Company adopted new income tax guidance pertaining to uncertain tax positions issued by the Financial Accounting Standards Board (“FASB”) at the beginning of fiscal year 2008. This new guidance was issued to clarify what criteria must be met prior to recognition of the financial statement benefit of a position taken in a tax return. The provisions of this guidance apply broadly to all tax positions taken by a company, including decisions to not report income in a tax return or to classify a transaction as tax exempt. The prescribed approach is determined through a two-step benefit recognition model. The amount of benefit to recognize is measured as the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. The tax position must be derecognized when it is no longer more likely than not of being sustained. At October 31, 2009, the Company did not recognize any amounts related to this new standard.

Stock Based Compensation - The Company currently accounts for its stock based compensation in accordance with ASC Topic 718 "Accounting for Stock-Based Compensation." This topic establishes an accounting method based on the fair value of equity instruments awarded to employees as compensation.

Reclassification – The financial statements for periods prior to October 31, ~~2009~~2010 have been reclassified to conform to the headings and classifications used in the October 31, ~~2009~~2010 financial statements.

NOTE 2 - TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable consist of the following:

	2009			2008
	2010			2009
Trade accounts receivable	$	1,535,384	$		2,276,781
Trade accounts receivable Employee advances	$	1,634,205 658	$		1,535,384 -
Less allowance for doubtful accounts		(6633,~~530~~576)			(2266,~~540~~530)
	$	1,~~468~~601,~~854~~287	$		21,~~254~~468,~~241~~854

ALPINE AIR EXPRESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

NOTE 3 - PREPAID EXPENSES

Prepaid expenses consist of the following:

	2009			2008
	2010			2009
Prepaid expenses and credits	$	84110,~~954~~493	$		~~212~~84,~~902~~954
Prepaid other taxes Prepaid insurance Prepaid training		8137,~~332~~197 80271,~~907~~797 63,~~206~~514			~~167~~81,~~899~~332 ~~252~~80,~~122~~907 256,~~951~~206
	$	~~253~~423,~~399~~001	$		~~658~~253,~~874~~399

NOTE 4 - INVENTORIES

Inventories consist of the following:

	2009			2008
	2010			2009
Aircraft parts	$	1,~~620~~660,~~614~~923	$		1,~~363~~620,~~116~~614
Work in process Fuel		~~247~~229,~~089~~235 3525,~~306~~744			~~438~~247,~~884~~089 4535,~~644~~306
Allowance for obsolescence		(5216,~~523~~609)			(52,~~525~~523)
	$	1,~~850~~899,~~486~~293	$		1,~~795~~850,~~119~~486

NOTE 5 – PROPERTY AND EQUIPMENT

^{Property and equipment consists of the following:}

	Estimated life in years	~~2009~~2010			~~2008~~2009
Building and improvements	10 - 40	$	1,~~286~~369,~~989~~559	$	1,286,989
Aircraft	15		1820,~~746~~318,~~456~~537		1718,~~090~~746,~~688~~456
Engines	7 - 10		1213,~~185~~017,~~742~~789		912,~~160~~185,~~569~~742
Equipment	3 - 10		~~306~~295,~~655~~758		~~290~~306,~~292~~655
Furniture and fixtures	3 - 10		~~329~~338,~~029~~204		~~356~~329,~~082~~029
Vehicles	5 - 7		~~140~~126,~~540~~913		~~136~~140,~~340~~540
			32,995,411		28,320,960
			35,466,760		32,995,411
Less:accumulated depreciation and amortization			(11,759,914)		(8,931,878)
Less: accumulated depreciation and amortization			(13,340,978)		(11,759,914)
		$	2122,~~235~~125,~~497~~782	$	1921,~~389~~235,~~082~~497

Sales/Leasebacks - InThe ~~April 2004, the~~ Company ~~entered~~had ~~into~~ a sale/leaseback agreement with a third party, wherein, the Company sold an aircraft for $650,000 and entered into an operating lease (See Note 6). The Company recorded a deferred gain of $355,716 which was amortized over the life of the lease as an offset to lease expense. This lease ended in May 2009 and the deferred gain has been fully amortized. The Company will lease this aircraft on a monthly, as needed basis.

InThe ~~June 2004, the~~ Company ~~entered~~had ~~into~~ a sale/leaseback agreement with a third party, wherein, the Company sold an aircraft for $650,000 and entered into an operating lease (See Note 6). The Company recorded a deferred gain of $517,929 which was amortized over the life of the lease as an offset to lease expense. In addition, $80,000 of the proceeds from this sale are invested in a time deposit as collateral on the lessor’s debt. These funds are recorded as a restricted time deposit on the Company's records. This lease ended in June 2009 and the deferred gain has been fully amortized. The Company will lease this aircraft on a monthly, as needed basis.

InThe ~~April 2006, the~~ Company ~~entered~~had ~~into~~ a sale/leaseback agreement with a third party, wherein, the Company sold an aircraft for $675,000 and entered into a six month operating lease. The Company recorded a gain on the sale of the aircraft during the second quarter of 2006 in the amount of $594,586. There is no continuing commitment on the part of the Company to continue the operating lease beyond six months. In addition, $95,000 of the proceeds from this sale are invested in a time deposit as collateral on the lease. These funds are recorded as a restricted time deposit on the Company records. The Company ~~leased~~will lease this aircraft ~~in 2009~~ on a monthly, as needed basis.

1210

ALPINE AIR EXPRESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

NOTE 6 - OPERATING LEASES

OnThe ~~March 20, 2001, the~~ Company ~~entered~~has ~~into~~ a 30-year lease agreement with two five-year extension options for real property at the Provo, Utah Airport. The Company also leases a hangar and a maintenance facility in Billings, Montana at the Logan International Airport. The lease for the hangar is for a term of ~~five~~ten years ending October 31, ~~2012~~2017. The lease term for the maintenance facility is one year ending ~~March~~February 1020, 2010. These operating lease agreements contain scheduled rent escalation clauses based on changes in the consumer price index ~~that are being amortized over the term of the lease using the straight-line method~~. In addition to the operating leases reported above, the Company has two revocable permits (month-to-month leases) with the State of Hawaii, Department of Transportation to use hangar and office space for its air cargo operations and the permits are renewed on an annual basis. The Company has chosen to continue this lease despite not having operations currently in Hawaii. The Company also leases land from a private enterprise for storage of a Company fuel tank.

Future minimum lease payments for the years ending October 31, are as follows:

2010	$	37,211
2011	$	51,171
2011		33,211
2012		35,744
2012		33,211
2013		35,744
2013		13,265
2014		35,744
2014		13,265
2015		35,744
Thereafter		~~217~~250,~~762~~468
	$	~~347~~444,~~925~~615

Total rental expense for the period ending October 31, ~~2009~~2010 and ~~2008~~2009 was $92113,~~728~~498 and $~~199~~92,~~254~~728, respectively.

Aircraft - InThe ~~April and June of 2004 and again in April of 2006, the~~ Company ~~entered~~has ~~into~~ certain sale/leaseback agreements (See Note 5). The Company agreed to lease two aircraft for sixty months. It has also agreed to lease a third aircraft on a month to month basis. The Company is also required to pay an additional amount to the Lessor based on the aircraft’s actual flight time. The Lessor is responsible for engine and propeller overhauls and certain qualifying improvements to all leased aircraft. These aircraft leases ended in 2009 and the Company ~~will~~leased ~~lease~~ the aircraft on a month to month basis, as needed, during 2010.

Total aircraft lease expense for the years ending October 31, ~~2009~~2010 and ~~2008~~2009 was $~~220~~68,~~595~~182 and $~~475~~220,~~582~~595, respectively.

NOTE 7 - RELATED PARTY TRANSACTIONS

Personal Guarantee - The Company's major shareholder/officer has personally guaranteed ~~several~~a ~~notes~~note which ~~are~~is also collateralized by certain aircraft of the Company. (See Note 9)

NOTE 8 – LINE OF CREDIT

The Company ~~established~~renewed a $1,000,000 line of credit with a lending institution on February 1723, ~~2009~~2010 to help manage cash flow and day to day operations. The line of credit has a variable interest rate, currently 6.5% and matures on February 1723, ~~2010~~2011. The interest is payable each month on any outstanding balance. As of October 31, ~~2009~~2010 the outstanding balance was $~~748,875~~0. ~~Subsequent~~The toline ~~year end $472,854~~ of ~~the~~credit ~~amount~~is ~~outstanding~~secured ~~was~~by ~~refinanced~~two toaircraft, aReg ~~long-term~~#N194GA ~~note~~and N955AA. ~~(See Note 17)~~

13The Company also established a $100,000 line of credit with the same lending institution on August 8, 2006 to help manage cash flow and day to day operations. The line of credit has a variable interest rate, currently 6.5% and matures on August 25, 2016. The interest is payable each month on any outstanding balance. As of October 31, 2010 the outstanding balance was $0. The line of credit is secured by two aircraft, Reg #N194GA and N955A.

~~ALPINE AIR EXPRESS, INC.~~11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

NOTE 9 – LONG TERM DEBT

Long term debt consists of the following:

2009


		2010		2009
Note payable with an interest rate of 8.75% at October 31, 2009. Secured by three aircraft, Reg #N17ZV, N955AA, and N194GA and personally guaranteed by an officer/shareholder. This note was refinanced to a long-term note on January 7, 2010.	$	-	$	815,083

Note payable issued on August 19, 2009 for $2,524,200 due August 19, 2012. Current interest rate of 6.5%. Secured by four aircraft, Reg #N154GA, N99GH, N326CA, and N239AL and personally guaranteed by an officer/shareholder.		2,097,256		2,453,216

2008


Note payable with interest only due at an interest rate of 4.75%. Personally guaranteed by an officer/shareholder. This note was refinanced to a long-term note on January 7, 2010.		-		1,200,500

Note payable issued on January 7, 2010 for $2,700,000 due January 7, 2016. Interest rate of 7.147%. Secured by four aircraft, Reg #N172GA, N125BA, N219VP, and N198GA. Unsecured note payable issued on May 4, 2010 for $400,775 due February 1, 2011. Interest rate of 7.78%. Note payable issued on June 11, 2010 for $3,087,407 due June 11, 2015. Interest rate of 5.865%. Secured by four aircraft, Reg #N114AX, N127BA, N24BH, and N950AA.		2,576,151 136,190 2,964,757		- - -


Capital Lease Obligations		794,981		4,521,138
		8,569,335		8,989,937
Less current portion		(1,286,000)		(1,842,000)
Long-term portion	$	7,283,335	$	7,147,937

~~Note~~The ~~payable~~estimated ~~issued~~aggregate ~~August~~maturities ~~28,~~required ~~2006~~on long-term debt for ~~$1,936,193~~each ~~due~~of ~~August~~the 28individual years at October 31, 2010 are as follows:

2011~~. Interest rate of~~ ~~8.75%~~$ ~~at October 31~~1, ~~2009. Secured by three Aircraft.~~ 286,000

~~Reg #N17ZV~~ 2012 2, ~~N955AA~~539, ~~and N194GA and personally guaranteed by an~~ 771

~~officer/shareholder. Subsequent to year end this note was refinanced to a~~ 2013 880,886

~~long-term note. (See Note 17)~~ 2014 666,524

2015 1,526,348

Thereafter 1,668,806

$ 8,569,335

NOTE 10 – CAPITAL LEASE OBLIGATIONS

The company leases one aircraft under a capital lease agreement which provides for the option to purchase the aircraft at the end of the lease. The lease is payable in aggregate monthly payments of $24,288, having an imputed interest rate of 7.924%, and is secured by the aircraft being leased. Future minimum lease payments under capital leases are approximately as follows:

Year Ending

October 31,

Amount

2011

~~815~~291,~~083~~456

2012

291,456

2013

291,456

2014

24,288

898,656

Less amount representing interest

(103,675)

Present value of future minimum lease payments

1 794,~~209,653~~981

~~Note payable issued on August 19, 2009 for $2,524,200 due August 19, 2012.~~12

Current interest rate of 6.5%. Secured by four aircraft Reg #N154GA, N99GH,

N326CA, and N239AL and personally guaranteed by an officer/shareholder. 2,453,216

Note payable issued on September 22, 2009 for $1,200,500 due September 22,

2010. This is an interest only note with an interest rate of 4.75%. Personally

guaranteed by an officer/shareholder. Subsequent to year end this note was

refinanced to a long-term note. (See Note 17)

1,200,500

Capital lease obligations (see Note 10)

4,521,138

8,568,955

8,989,937

9,778,608

Less current portion

(1,842,000)

(1,941,676)

Long-term portion

7,147,937

7,836,932

The estimated aggregate maturities required on long-term debt for each of the individual years at October 31, 2009 are as follows:

2010	$	1,843,000
2011		2,031,079
2012		3,146,328
2013		410,992
2014		143,949
Thereafter		1,415,589
	$	8,989,937

NOTE 10 – CAPITAL LEASE OBLIGATIONS

The company leases seven aircraft under capital lease agreements which provide for the option to purchase the aircraft at the end of the leases. The leases are payable in aggregate monthly payments of approximately $146,000, having imputed interest rates ranging from 7.33% to 8.15%, and are secured by the aircraft being leased. Future minimum lease payments under capital leases are approximately as follows:

	Year Ending October 31,		Amount
	2010	$	1,757,000
	2011		1,757,000
	2012		1,390,000
	2013		291,000
			5,195,000
Less amount representing interest			(673,862)
Present Value of future minimum lease payments		$	4,521,138

The cost, accumulated amortization, and amortization expense of aircraft under capital lease is approximately as follows:

		2009		2008
		2010		2009
Cost	$	72,~~476~~403,~~024~~402	$	97,~~120~~476,~~530~~024
Accumulated amortization	$	2903,~~821,641~~944	$	12,~~506~~821,~~917~~641
Amortization expense	$	~~755~~173,~~982~~212	$	~~472~~755,~~938~~982

ALPINE AIR EXPRESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

NOTE 11 – PREFERRED STOCK

~~Preferred Stock -~~ The ~~Company is authorized to issue 1,000,000 shares of $.001 par value~~ preferred stock. ~~The preferred stock~~ provides for monthly dividends at an annual rate of 6.5%, is non-voting, and is convertible at any time to common stock by the holder based on the current market price of the Company’s common stock. The Company can redeem the preferred stock any time and the Holder can call for redemption of the preferred stock any time after December 311, 2011.

The following table summarizes the changes in preferred stock shares and values.


	Shares		Amount
Balance at November 1, 2008-Net of Discount	840,000	$	7,557,580

Discount on preferred stock	-		89,780

Redemption of preferred stock	(20,000)		(182,080)

Balance at October 31, 2009	820,000	$	7,465,280

Redemption of preferred stock	-		-

Balance at October 31, 2010	820,000	$	7,465,280

NOTE 12 – STOCK OPTIONS

The Company’s equity incentive plan allows the Company to issue incentive stock options (ISO's), non-statutory stock options and restricted shares to employees, directors, and consultants of the Company. Annually, commencing January 2002, the aggregate number of shares of the Company's common stock available for award under the plan shall increase by the lesser of 250,000 or seven percent of the outstanding stock less the number of shares previously authorized for the plan, respectively. After August 18, 2011, the plan terminates and no further options may be granted. The exercise price of options granted under the terms of the plan must not be less than 100% of the fair market value of the shares as of the date of grant. Additionally, no individual may be granted more than 100,000 options in any given year. All options issued under the plan are exercisable for ten years and vest after two years. The Company has not received and does not intend to request a determination from the Internal Revenue Service that the options issued under the plan will qualify under the Code for treatment as qualified incentive stock options.

ALPINE AIR EXPRESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

A summary of the options outstanding is presented below:

	October 31, 2009			October 31, 2008
	October 31, 2010			October 31, 2009
	Shares	Exercise Price		Shares	Exercise Price
Outstanding at beginning of year	1,~~637~~434,~~009~~909	$	0.30 – 2.50	1,~~211~~637,~~106~~009	$	0.4030 – 2.50
Granted	-		-	~~575,000~~-		~~0.30~~-
Exercised	-		-	-		-
Forfeited	~~202~~37,~~100~~500		0.30 – 2.50	~~149~~202,~~097~~100		0.30 – 2.50
Expired	-		-	-		-
Outstanding at end of year	1,~~434~~397,~~909~~409	$	0.30 – 2.50	1,~~637~~434,~~009~~909	$	0.30 – 2.50
Weighted average fair value of options granted during the year	-		-	~~575,000~~-	$	~~0.30~~-

Options Outstanding			Options Exercisable
Range of Exercise Prices	Number of Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$2.50	554,120	1.8 years	$	2.50	554,120	$	2.50
$0.30 - $.050	880,789	7.9 years	$	0.38	565,789	$	0.43
	1,434,909	5.5 years	$ 1.20		1,119,909	$ 1.45


Options Outstanding			Options Exercisable
Range of Exercise Prices	Number of Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$2.50	554,120	0.8 years	$	2.50	554,120	$	2.50
$0.30 - $0.50	843,289	6.8 years	$	0.39	843,289	$	0.39
	1,397,409	4.4 years	$ 1.24		1,397,409	$ 1.24

NOTE 13 - INCOME PER COMMON SHARE

The following data show the amounts used in computing net income per common share, for the years ended October 31:

			2009						2008
		2010				2009
Net income (loss) available to common shareholders	$	1,440,394	~~544,599~~	$		544,599	$		~~120,193~~
Weighted average number of common shares used in basic EPS		36,267,202	~~36,271,461~~			36,271,461			~~36,245,398~~
Dilutive effect of preferred stock		74,158,411	~~46,658,000~~			46,658,000			~~21,676,190~~
Dilutive effect of stock options Weighted average number of common shares and dilutive potential common stock used in diluted EPS		- 110,425,613	~~- 82,929,461 __________~~		- 82,929,461			~~- 57,921,588 _________~~

For the year ended October 31, ~~2009~~2010 and ~~2008~~2009, 1,~~434~~397,~~909~~409 and 1,~~637~~434,~~009~~909 outstanding options, respectively, were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive. ~~During~~The ~~April 2007 the~~ Company’s ~~issued 1,000,000 series A, 6.5%~~ preferred shares ~~with a stated value of $9.104 per share. These preferred shares have no voting rights and are convertible into common stock at the current market value. They~~ do have a dilutive effect and are included in the computation of EPS. The number of preferred shares outstanding and used in the calculation as of October 31, ~~2009~~2010 and ~~2008~~2009 are 820,000 and ~~840~~820,000 shares, respectively.

ALPINE AIR EXPRESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

NOTE 14 – INCOME TAXES

The provision for income taxes consists of the following:

	2009		2008
	2010		2009
Current	$	-115,000	$	-
Deferred		~~509~~1,460,000		~~434~~509,~~812~~000
	$	~~509~~1,575,000	$	~~434~~509,~~812~~000

The provision for income taxes differs from the amount computed at federal statutory rates as follows:

	2009		2008
	2010		2009
Federal income tax at statutory rates	$	~~556~~1,190,000	$	~~616~~556,000
State tax at statutory rates		54133,000		6054,000
Change in tax depreciation method		~~54,000~~-		-54,000
Change in valuation allowance		~~(120,000)~~-		(~~194~~120,~~255~~000)
Other		(35,000)		(46,933)
Other Expiration of capital loss carryover Alternative minimum tax		91,000 120,000 41,000		(35,000) - -
	$	~~509~~1,575,000	$	~~434~~509,~~812~~000

Deferred tax assets ~~(liabilities)~~ are comprised of the following:

	2009		2008
	2010		2009
Capital loss carryforward	$	~~120,000~~-	$	-120,000
Accrued vacation		~~106~~119,000		~~104~~106,000
Allowance for bad debt		2513,000		825,000
Inventory valuation		206,000		20,000
Accrued interest		-		~~1,000~~-
Net current deferred tax assets	$	~~271~~138,000	$	~~133~~271,000
Excess of tax over book depreciation	$	(34,~~600~~176,000)	$	(23,~~932~~600,000)
Net operating loss carryforward		2,~~828~~023,000		2,~~827~~828,000
Alternative minimum tax credits		79120,000		79,000
Stock compensation expense		4154,000		1341,000
Capital loss carryforward		32,000		~~120~~32,000
Deferred sales		-		40,000
Net long-term deferred tax asset (liability)	$	(1,947,000)	$	(620,000)
Valuation allowance		-		(120,000)
Net long-term deferred tax asset (liability)	$	(620,000)	$	27,000

As of October 31, ~~2009~~2010 the Company has capital loss carryforwards of approximately $~~316,000 that expire in 2010 and approximately $~~84,000 that expire in 2015. The Company also has net operating loss carryforwards of approximately $75,~~448~~328,000 that expire beginning in ~~2024~~2025.

Tax years ended October 31, 2007, 2008, and 2009 remain open to examination by the federal Internal Revenue Service and for all state taxing authorities.

NOTE 15 – CONCENTRATIONS

U.S. Postal Service Contracts - The Company receives the majority of its revenues from contracts with the U.S. Postal Service (USPS). For the year ended October 31, ~~2009~~2010 and ~~2008~~2009, the revenues from contracts with the USPS represented 6569% and 7165% of total revenues, respectively. At October 31, ~~2009~~2010 and ~~2008~~2009, accounts receivable from the USPS totaled $~~759~~966,~~109~~855 and $1759,~~236,412~~109 or 4960% and 5549%, respectively. The contracts currently in effect for USPS routes will expire in September 2015 for mainland US operations. The loss of this customer would have a material negative effect on the operations of the Company.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

The Company operates its aircraft under a certificate which allows it to accumulate time between overhauls (TBO) in excess of manufacturer's recommendations. The Company regularly inspects its engines. A majority of the engines used by the Company have accumulated TBO in excess of manufacturer's recommendations.

~~There~~Several ~~are~~allegations ~~two~~and ~~claims~~proposed ~~pending~~penalties ~~against~~have ~~the~~been ~~Alpine~~put ~~Air~~forth by the ~~FAA~~Federal ~~from~~Aviation ~~the~~Administration (FAA) ~~Regional~~and ~~Office~~are incurrently ~~Renton,~~being ~~Washington. One~~reviewed ~~claim~~by ~~alleges~~the ~~that~~Company. ~~contract~~Management ~~ramp~~has ~~personnel~~assessed ~~were~~the ~~allowed~~probability toand ~~load~~has ~~Alpine~~estimated ~~Air~~and ~~aircraft~~accrued ~~even though they had not completed Alpine Air’s hazardous materials training program. The FAA has proposed~~ a ~~civil~~reasonable ~~penalty in the~~ amount ofto ~~$5,000~~cover ~~and~~any ~~Alpine~~penalties ~~Air~~the isCompany ~~vigorously~~may ~~contesting the claim~~incur. ~~The~~None ~~second FAA claim alleges violations~~ of ~~maintenance~~these ~~requirements~~assertions ~~for~~have anresulted ~~airplane based~~ in ~~Hawaii~~any ~~during~~enforcement ~~the~~action ~~period~~against ~~of January to February 2009. The FAA has proposed a civil penalty in~~ the ~~amount of $228~~Company,~~250~~ ~~and~~nor ~~Alpine~~does ~~Air is vigorously contesting~~ the ~~claim. The~~ Company ~~believes~~expect ~~there~~any isactions noas ~~good~~a ~~faith~~result ~~basis for the amount~~ of ~~either of~~ the ~~claims~~allegations.

1715

ALPINE AIR EXPRESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009 and 2008

Alpine Air is also contesting a claim made by the State of Hawaii, Department of Transportation, Airports Division, for alleged past due landing fees for the period of April 2004 through 2009 in the amount of $331,584. The claim was not presented to Alpine Air until 2008 and the Company immediately contested the claimed amount. Alpine Air is in the process of concluding a negotiated settlement of the claim for the total sum of $90,000 and the final settlement agreement should be signed within the month.

NOTE 17 – SUBSEQUENT EVENTS

InOn ~~December~~November ~~2009~~30, 2010 the ~~Company~~Alpine ~~signed~~Air aBoard ~~note~~of ~~payable~~Directors ~~with~~approved a ~~lending~~one-time ~~institution~~redemption ~~for~~of ~~$403~~20,~~324.~~000 ~~The~~shares ~~note~~of ~~matures~~Series onA ~~March 4, 2010 at which time the note must be paid in full~~6.5% ~~One~~Preferred ~~aircraft~~Stock ~~Reg~~of #Alpine ~~N216CS~~Air ~~was~~held ~~used~~by asMallette ~~collateral~~Holdings, onLLLP ~~the~~to ~~note.~~be ~~This~~redeemed isat anits ~~interest only loan with a~~ stated ~~interest~~value ~~rate~~ of 5$9.~~5%.~~104 ~~The~~per ~~proceeds of this loan were used to purchase the aircraft listed below~~share.

InOn December ~~2009~~22, 2010 the ~~Company~~Alpine ~~finalized~~Air ~~the~~Board ~~purchase~~ of aDirectors ~~Beechcraft~~approved ~~1900-D with~~ a ~~passenger~~one-time ~~configuration~~redemption ~~for~~of $120,~~375,~~000. Ashares ~~lease~~of ~~agreement~~Series ~~was~~A ~~also~~6.5% ~~entered~~Preferred ~~into~~Stock inof ~~December~~Alpine ~~2009~~Air ~~with~~held aby ~~third~~Mallette ~~party~~Holdings, inLLLP ~~which~~to ~~the~~be ~~third~~redeemed ~~party~~at ~~will~~its ~~lease~~stated ~~this~~value ~~aircraft~~of ~~from~~$9.104 ~~the~~per ~~Company for a 13 month term beginning December 1, 2009 and ending January 11, 2011~~share.

InOn January ~~2010~~5, ~~the~~2011 ~~Company~~Alpine ~~signed~~Air apurchased ~~note~~one ~~payable~~Beechcraft ~~with~~99 aaircraft ~~lending institution~~ for $2375,~~700,~~000. ~~The~~This ~~note~~aircraft ~~matures~~will onbe ~~January~~used 7,in ~~2016.~~the ItCompany’s ~~is secured by four~~ aircraft ~~Reg #N172GA, N125BA, N219VP, and N198GA~~operations. The ~~stated~~purchase ~~interest rate is 7.147% and the proceeds~~ of this ~~loan~~aircraft ~~were~~released ~~used~~the torestrictions ~~pay~~on ~~off~~two ~~the~~cash ~~balance~~time ofdeposits ~~two~~totaling ~~other~~$206,433 ~~notes~~held ~~payable~~as ~~and~~collateral ~~reduce~~for ~~the~~debt ~~balance~~of ~~owed~~a onthird aparty ~~line~~(See ofNote ~~credit~~1-Restricted Cash).

~~Alpine~~The ~~Air~~Company ~~Express~~as ~~has~~of ~~evaluated~~December ~~subsequent~~31, ~~events~~2010 ~~for~~had ~~the~~an ~~period~~open ~~October~~commitment ~~31,~~to ~~2009~~purchase ~~through~~one ~~January~~additional ~~29,~~Beechcraft ~~2010~~1900C aircraft for $500,000. ~~the~~This ~~date~~additional ~~the~~aircraft ~~financial~~will ~~statements~~be ~~were~~used ~~issued,~~in ~~and~~the ~~concluded~~Company’s ~~there~~aircraft ~~were~~operations. noAs ~~other~~of ~~events~~January or29, ~~transactions~~2011, ~~during~~the ~~this~~date ~~period~~the ~~that~~financial ~~required~~statements ~~recognition~~were orissued, ~~disclosure~~the infinal ~~its~~purchase ~~financial~~agreement ~~statements.~~has not been signed.

~~NOTE~~Alpine 18Air –Express ~~RESTATEMENT~~has OFevaluated ~~CONSOLIDATED~~subsequent ~~FINANCIAL~~events ~~STATEMENTS~~for the period October 31, 2010 through January 26, 2011, the date the financial statements were issued, and concluded there were no other events or transactions during this period that required recognition or disclosure in its financial statements.

~~The financial statements for the years ended October 31, 2008 were restated to correct errors in the reporting of current and deferred income tax expense and the recording of deferred tax assets.~~16

PART III

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

~~Pritchett,~~On ~~Siler~~February ~~& Hardy~~26, ~~P.C.~~2009, ~~audited~~ the Company’'s ~~financial~~audit ~~statements~~committee ~~for~~and ~~the~~Board ~~fiscal~~of ~~year~~Directors ~~ended~~voted ~~October~~to ~~31,~~approve ~~2008.~~the ~~Effective~~engagement as of ~~February~~Jones 23Simkins, ~~2009, Pritchett, Siler & Hardy,~~ P.C., ~~resigned as the independent accountant~~ of ~~Alpine Air Express~~Logan, ~~Inc.,~~Utah aas ~~Delaware~~principal ~~corporation~~accountant ~~(the "Company"). This resignation was due solely~~ to audit the ~~PCAOB~~Company's ~~requirement~~financial ~~of five-year rotations for audit partners on public company audits~~statements. During the Company's two most recent fiscal years, ~~and~~prior ~~since~~to ~~then~~engaging Jones Simkins, ~~there~~P.C., ~~have~~neither ~~been~~the noCompany ~~disagreements~~nor ~~with~~anyone ~~Pritchett,~~on ~~Siler~~its &behalf ~~Hardy,~~consulted with Jones Simkins P.C. onregarding ~~any~~either: ~~matter~~(i) the application of accounting principles orto ~~practices,~~a ~~financial~~specified ~~statement disclosure~~transaction, oreither ~~auditing~~completed ~~scope~~or proposed; or ~~procedure,~~the ~~which~~type ~~disagreements,~~of ifaudit ~~not~~opinion ~~resolved~~that tomight ~~the~~be ~~satisfaction~~rendered ofon the ~~former~~Company's ~~accountant~~financial ~~would~~statements, ~~have~~and ~~caused~~either ita towritten ~~make~~report ~~reference~~was provided to the ~~subject~~Company ~~matter~~or oforal ~~such~~advice ~~disagreement~~was inprovided ~~connection~~that ~~with~~the ~~its~~new ~~report.~~accountant ~~The~~concluded ~~reports~~was ofan ~~Pritchett,~~important ~~Siler~~factor &considered ~~Hardy,~~by ~~P.C. on~~ the Company's ~~financial~~in ~~statements~~reaching ~~for~~a ~~the~~decision ~~past~~as ~~two~~to ~~years~~the ~~did~~accounting, ~~not~~auditing ~~contain~~or ~~any~~financial ~~adverse~~reporting ~~opinion~~issue; or ~~disclaimer~~(ii) ofany ~~opinion,~~matter ~~and~~that ~~were~~was ~~not~~either ~~qualified~~the orsubject ~~modified~~of asa todisagreement ~~uncertainty, audit scope~~ or ~~accounting~~a ~~principles~~reportable event.

OnITEM February 26, 2009, the Company's audit committee and Board of Directors voted to approve the engagement of Jones Simkins, P.C. of Logan, Utah as principal accountant to audit the Company's financial statements. During the Company's two most recent fiscal years, and since then, neither the Company nor anyone on its behalf consulted with Jones Simkins P.C. regarding either9A: CONTROLS ~~(i)~~AND the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and either a written report was provided to the Company or oral advice was provided that the new accountant concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event. PROCEDURES

~~During~~Evaluation ~~our most recent fiscal year, we have not consulted Jones Simkins, P.C. regarding the application~~ of ~~accounting~~Disclosure ~~principles~~Controls toand ~~a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements or any other financial presentation whatsoever.~~ Procedures

~~ITEM~~The 9ACompany’s management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Disclosure controls and procedures require that information to be disclosed by the Company in reports filed under the Exchange Act is (Ti): recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding disclosure. ~~CONTROLS~~A ~~AND~~controls ~~PROCEDURES~~system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

~~The~~Based ~~Company’s~~on ~~management~~that evaluation, ~~with~~ the ~~participation~~management ~~of our principal executive officer and our principal financial officer~~concluded, ~~evaluated the effectiveness of our disclosure controls and procedures~~ as of the end of the period covered by this ~~Annual Report. Based on that evaluation~~report, ~~our principal executive officer and our principal financial officer concluded~~ that ~~our~~the disclosure controls and procedures aswere ofeffective ~~the~~in ~~end~~recording, ofprocessing, ~~the~~summarizing, ~~period~~and ~~covered~~reporting ~~by the Annual Report were effective such that the~~ information required to be disclosed ~~by the Company in reports filed under the Exchange Act is (i) recorded~~, ~~processed, summarized and reported~~ within the time periods specified in the ~~SEC~~Commission’s rules and forms, and ~~(ii)~~such information was accumulated and communicated to ~~our~~ management, including ~~our~~the principal executive officer and ~~our~~the principal financial officer, ~~as appropriate~~ to allow timely decisions regarding ~~disclosure. A~~required controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detecteddisclosures.

~~The Company~~Management’s ~~management~~Report ison responsible for establishing and maintaining adequate internal control over financial reporting for the Company. The Company’s management, with the participation of the principal executive officer and the principal financial officer, evaluated the effectiveness of the Company’s internal control over financial reporting as of October 31, 2009. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework. Based on this evaluation, our management, with the participation of the principal executive officer and principal financial officer concluded that, as of October 31, 2009, our internal control over ~~financial~~Financial ~~reporting was effective.~~Reporting

~~This~~The ~~Annual Report does not include an attestation report of the~~ Company’s ~~registered~~management ~~public~~is ~~accounting~~responsible ~~firm~~for ~~regarding~~establishing and maintaining adequate internal control over financial reporting~~. Management’s~~ ~~report~~for ~~was~~the ~~not~~Company. ~~subject~~The ~~to attestation by the~~ Company’s ~~registered~~management, ~~public~~with ~~accounting~~the ~~firm~~participation ~~pursuant to temporary rules~~ of the ~~Security~~principal executive officer and ~~Exchange~~the ~~Commission~~principal ~~that~~financial ~~permit~~officer, evaluated the ~~Company~~effectiveness toof ~~provide~~the ~~only management~~Company’s ~~report~~internal incontrol ~~this~~over ~~Annual~~financial ~~Report.~~

reporting as of October 31, 2010. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework. Based on this evaluation, management, with the participation of the principal executive officer and principal financial officer concluded that, as of October 31, 2010, internal control over financial reporting was effective.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm because the Company is neither an “accelerated filer” nor a “large accelerated filer” as those terms are defined by the SEC.

Changes in Internal Control Over Financial Reporting

There have been no changes in internal control over financial reporting during the fourth fiscal quarter of the fiscal year covered by this Annual Report.

ITEM 9B: OTHER INFORMATION

None; not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers.

The members of the Board of Directors of Alpine Air serve until the next annual meeting of stockholders, or until their successors have been elected. The officers serve at the pleasure of the Board of Directors. The following are our directors and executive officers.

Name	Age	Position	Held Position Since
Eugene R. Mallette Rick C Wood	6061 3738	CEO Principal Financial Officer	1986 ~~2008~~2010
Max A. Hansen	6061	Secretary/Treasurer and Director	1986
Joseph O. Etchart	6162	Chairman	2005
Kenneth D. Holliday	64	Director	2002
Ronald L. Pattison	53	Director	2006
Michael Brown	68	Director	2006
Ronald L. Pattison	52	Director	2006

Mr. Mallette began his career with Alpine Aviation in 1979 as its Sales Manager, and then became General Manager later in 1979. He became Chief Executive Officer and Director upon acquiring Alpine Aviation in 1986. Prior to his employment by Alpine Aviation, he was employed by the State of Montana as a staff auditor. He received a B.A. in Business Administration from Carroll College in 1971. Mr. Mallette holds a ~~private~~commercial pilot's license and maintains his proficiency. He devotes time to civic and charitable causes and was previously Chairman of the Better Business Bureau of Utah County and Vice-President of the Provo Chamber of Commerce and was named CEO of the Year for Small Public Companies in Utah in 2008.

Rick C. Wood was named the ~~Accounting~~Principal ~~Manager~~Financial Officer of Alpine Air in ~~February~~January ~~2008~~2010 after serving as the Senior Accountant and Accounting Manager since February 2006. He ~~has recently been designated Principal Financial Officer. He~~ received a Bachelor of Science degree in Accounting from the University of Utah and has served in various accounting capacities for the last ~~nine~~ten years. He is currently pursuing a Masters of Accountancy degree from the University of Phoenix in preparation for the CPA exam. Prior to coming to Alpine Air, he worked as the controller of a local computer company where he began as an Accounting Clerk and Sales Consultant. Prior to his Accounting career, Mr. Wood had a successful sales career with CompUSA, Gateway Computers, American Express, and Qwest Communications. He currently volunteers at his local church ~~keeping~~tracking ~~track of~~ donations and expenses.

Max A. Hansen has been an Alpine Air Director since 1986 and legal advisor to the company since 1979. He has been practicing law since 1976 and has owned his own firm, Max A. Hansen & Associates, P.C. since 1980. He is licensed to practice law in Montana, Utah, and California and is admitted to practice before those state courts, the Federal courts of Montana and Utah, and the U.S. Supreme Court. Mr. Hansen provides legal services to Alpine Air as General Counsel. He is a Past President of the State Bar of Montana and served for many years as the Montana Delegate to the American Bar Association House of Delegates. Mr. Hansen has received distinguished service awards from the State Bar of Montana and the Montana Supreme Court for his work on behalf of the legal system. He is a former member of the American Bar Association Standing Committee on the Federal Judiciary and is still a member of the Sales, Exchanges & Basis Committee of the ABA Tax Section. Mr. Hansen is also President and CEO of American Equity Exchange, Inc., a company which assists taxpayers with Section 1031 tax-deferred property exchanges nationwide. He is a Past President and sits on the Board of the Federation of Exchange Accommodators and holds a designation as a Certified Exchange Specialist (CES). Mr. Hansen received his law degree from the University of San Diego School of Law in 1976, where he was a member of the ~~law~~Law ~~review~~Review. He received a BA in Political Science from Carroll College in 1971.

Joseph O. Etchart has been a member of our Board of Directors since April, 2002. He formerly served as Alpine Air's Director of Public and Investor Relations. He is also the President and CEO of Hinsdale Land Company, a real estate and agricultural enterprise in Montana. Since 1985, Mr. Etchart has served on the Board of Directors, and is a former Chairman of the Board, of Montana Livestock Ag Credit, one of the premier agricultural lending institutions in the Pacific Northwest. He served two terms as President of the Washington, D.C. based National Public Lands Council, where he was involved in the legislative and regulatory process associated with federal land commodity production. In addition, Mr. Etchart has held numerous civic, political and appointed posts, including Campaign Finance Chairman during the first successful election of Montana Governor Marc Racicot. Mr. Etchart received a ~~Bachelor of Arts degree in Sociology from Carroll College in 1970 and is an active member of numerous organizations, including the Knights of Columbus.~~

~~Kenneth~~Bachelor ~~D. Holliday joined our Board~~ of ~~Directors~~Arts degree in ~~September,~~Sociology ~~2002. He~~from ~~has~~Carroll ~~extensive~~College ~~experience~~ in ~~the~~1970 ~~aviation industry~~ and ~~currently~~is ~~serves~~an asactive ~~President~~member ~~and CEO~~ of ~~Avcon,~~numerous ~~Inc.~~organizations, aincluding ~~consulting company assisting airlines, aviation and travel related companies. He was formerly~~ the ~~President~~Knights ~~and CEO~~ of ~~TransMeridian Airlines, an air carrier contracted to fly A-320 aircraft for one of the nation's largest tour operators~~Columbus. Mr. Holliday also has served as President and CEO of Private Jet Expeditions, Inc., where he directed airline growth from one B-727 aircraft to 16 MD-80 aircraft over a two-year period. Mr. Holliday received a Bachelor of Science degree in Industrial Management from Clemson University and USAF undergraduate pilot training at Williams Air Force Base in Arizona.

Michael Brown was most recently the Managing Director and Head of Mergers and Acquisitions in the Investment Banking Group of Wells Fargo Securities where he completed numerous mergers and acquisitions, private placements and initial public offerings for companies in various segments of the consumer and technology industries. Mr. Brown was a member of the Investment Banking Commitment Committee of Wells Fargo Securities and coordinated the firm's investment banking activities in Southern California. Prior to joining the predecessor of Wells Fargo Securities, in September 2000, Mr. Brown was a Managing Director in Sutro & Co.'s Investment Banking Department and Head of Mergers and Acquisitions. Before joining Sutro, Mr. Brown was the founding Managing Director of Drexel Burnham Lambert's West Coast Mergers and Acquisitions Department. During his seven-year tenure at Drexel, Mr. Brown's transactions included arranging the $1.6 billion sale of Jack Kent Cooke's cable properties to a consortium of cable operators, Turner Broadcasting's $1.2 billion purchase of MGM, the sale of the Beverly Wilshire Hotel to Regent International, the sale of the Desert Inn and Sands Casinos to MGM Grand, and T. Boone Pickens' attempted takeovers of Gulf Oil and UNOCAL. Mr. Brown was a member of Turner Broadcasting's Board of Directors. Prior to joining Drexel, Mr. Brown was a Partner specializing in mergers and acquisitions at Kidder Peabody & Co. in Los Angeles and Vice President of Mergers and Acquisitions in the New York office of Goldman Sachs. Mr. Brown was a member of the faculty of Harvard Business School. Mr. Brown is a graduate of Harvard University (M.B.A.) and the Wharton School of the University of Pennsylvania (B.S.&E.). He has served with the U.S. Army Special Forces.

Ronald L. Pattison received his CPA Certificate in August of 1984 after graduating with a B.A. in Business Administration, specializing in Accounting. Ron has specialized in the design and administration of defined contribution plans, but also has a working knowledge of the requirements for defined benefit plans. He was the manager of the Defined Contribution practice group in the Albuquerque, New Mexico office of a national consulting firm. Ron left that practice in December of 1990 to start Pattison Pension Specialists, Inc., where he is currently a principal.

Nominees to Board of Directors

During the period covered by this Annual Report, the Company has made no material changes to the procedures by which security holders may recommend nominees to its Board of Directors.

Audit Committee

Alpine Air established a standing audit committee in the first quarter of its 2002 fiscal year. The committee has adopted a charter and currently consists of ~~four~~three members, Ron Pattison (Chair), Joe O. Etchart, ~~Michael Brown,~~ and Max A. Hansen (Ex Officio). Alpine Air does not have standing nominating committee.

Audit Committee Financial Expert

The Board of Directors has determined that the Chairman of the Audit Committee, Ron Pattison, qualifies as “audit committee financial expert” as defined by the SEC and also meets the additional criteria for independence of Audit Committee members set forth in Rule 10A-3(b)(l) under the Securities and Exchange Act of 1934.

Identification of Certain Significant Employees.

Alpine Air has no employees who are not executive officers but who make or are expected to make significant contributions to Alpine Air.

Family Relationships.

~~There~~ Joe ~~are~~Etchardt nois ~~family~~the ~~relationships~~brother-in-law ~~between~~of ~~any~~Ron ~~director,~~Pattison. ~~executive~~Messrs. ~~officer~~Etchardt orand ~~person~~Pattison ~~nominated~~are toboth ~~become~~directors ~~such~~of the Company.

Except as indicated below, to the knowledge of management, during the past ~~five~~10 years, no director, person nominated to become a director, executive officer, promoter or control person of Alpine Air:

(1) filed a petition under the Federal bankruptcy laws or any state insolvency laws or was a general partner or executive officer of any business entity that filed any bankruptcy petition or for which a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, either at the time of the bankruptcy or two years prior to that time;

(2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting the following activities:

(i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

(ii) engaging in any type or business practice; or\

(iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

(4) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) ~~above~~of Item 401 of Regulation S-K promulgated by the SEC, or to be associated with persons engaged in any such activity;

(5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; or

(6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodities Futures Trading Commission has not been subsequently reversed, suspended or vacated.

(7) was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

(i) any Federal or State securities or commodities law or regulation; or

(ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

(iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

(8) was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Code of Ethics.

We filed our Code of Conduct for our executive officers with our Amended 10KSB dated October 31, 2003, and filed with the Securities and Exchange Commission on March 19, 2004.

Compliance with Section 16(a) of the Exchange Act.

Based solely on a review of Forms 3 and 4 and amendments thereto furnished to us during its most recent fiscal year and Forms 5 and amendments thereto furnished to us with respect to our most recent fiscal year, and any written representations referred to in Item 405(b)(1) of the SEC, Alpine Air believes all forms required to be filed under Section 16 of the Exchange Act have been timely filed.

On January 9, 2004, our Board of Directors adopted an Insider Trading Policy. The purpose of this Policy is to ensure that our directors, executive stockholders and 10% stockholders comply with Section 16(a) of the Exchange Act and to establish procedures by which our insiders may buy and/or sell our common stock without violating the securities laws' prohibition against insider trading.

ITEM 11. EXECUTIVE COMPENSATION

The following tables set forth certain summary information concerning the compensation paid or accrued for each of Alpine Air's last three completed fiscal years to Alpine Air or its principal subsidiary Chief Executive Officer and each of its other executive officers that received compensation in excess of $100,000 during such period (as determined at October 31, ~~2009~~2010, the end of Alpine Air's last completed fiscal year). Unless indicated otherwise, all share figures in this Item reflect the three-for-one split of our issued and outstanding common stock in January, 2006.

Summary Compensation Table.

SUMMARY COMPENSATION TABLE

Name and Principal Position (a)	Year (b)	Salary ($) (c)	Bonus ($) (d)	Stock Awards ($) (e)	Option Awards ($) (f)	Non-Equity Incentive Plan Compensation ($) (g)	Nonqualified Deferred Compensation ($) (h)	All Other Compensation ($) (i)	Total Earnings ($) (j)
Eugene R. Mallette CEO	10/31/0910 10/31/0809 10/31/0708	94,309 98,520 97,529 ~~93,997~~	400 1,101 541 ~~542~~	0 0 0	0 ~~534~~0 ~~460~~534	0 0 0	0 0 0	2,853 7,798 25,107 ~~3,992~~	97,562 107,419 123,711 ~~98,991~~
Bill Distefano, General Manager	10/31/0910 10/31/0809 10/31/0708	135,361 133,042 138,986 ~~122,394~~	83,519 78,938 66,368 ~~511~~	0 0 0	0 ~~534~~0 ~~460~~534	0 0 0	0 0 0	2,217 11,685 6,942 ~~3,884~~	221,097 226,665 212,830 ~~127,249~~
Don T. Squire Jr, CFO	10/31/09 10/31/08 10/31/07	90,025 82,695 79,125	8,800 10,541 541	0 0 0	0 5,339 3,221	0 0 0	0 0 0	9,667 6,249 4,941	108,492 104,824 87,828
Rick C. Wood, PFO	10/31/10 10/31/09 10/31/08	50,087 51,402 48,708	400 800 1,088	0 0 0	0 0 534	0 0 0	0 0 0	342 1,566 1,341	50,829 53,768 51,671

Options/SAR Grants.

During the year ended October 31, ~~2007~~2008 Alpine Air issued options to purchase 5,000 shares each to the CEO, Eugene Mallette, the General Manager, Bill Distefano, and to the ~~CFO,~~Principal ~~Don~~Financial T.Officer, ~~Squire~~Rick JrWood.. These were issued as part of the same option grant offered to all full-time employees in ~~June~~July of ~~2007~~2008. ~~In addition to these, the CFO was also awarded 30,000 options to purchase shares as part of an annual bonus.~~

~~During~~ There ~~the~~were ~~year~~no ~~ended October 31, 2008 Alpine Air issued~~ options to purchase ~~5,000~~ shares ~~each~~issued toduring ~~the~~2009 ~~CEO, Eugene Mallette~~ and ~~the General Manager Bill Distefano~~2010. These were issued as part of the same option grant offered to all full-time employees in July of 2008. In addition to these, the CFO was also awarded 50,000 options to purchase shares as part of an annual bonus.

There were no options to purchase shares issued during 2009.

Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table.

No stock options or SARs were exercised during the fiscal year ended October 31, ~~2009~~2010 and ~~2008~~2009.

Pension Table.

None.

Compensation of Directors.

During the fiscal year ended October 31, 2010, no stock options were issued to any director. Board of Directors fees were $4,000 per quarter for services rendered.

During the fiscal year ended October 31, 2009, no stock options were issued to any director. Board of Directors fees were $4,500 per quarter for services rendered.

During the fiscal year ended October 31, 2008, each director was issued stock options to acquire 10,000 shares of common stock. These options have a two year restriction and an exercise price of $0.30 per share.

During the fiscal year ended October 31, 2007, each director was issued stock options to acquire 10,000 shares of common stock. These options have a two year restriction and an exercise price of $0.40 per share.

During the fiscal year ended October 31, 2006, each director was issued stock options to acquire 10,000 shares of common stock. These options have a two year restriction and an exercise price of $0.50 per share.

Termination of Employment and Change of Control Arrangement.

There are no compensatory plans or arrangements, including payments to be received from Alpine Air, with respect to any person named in Cash Compensation set out above which would in any way result in payments to any such person because of his resignation, retirement, or other termination of such person's employment with Alpine Air or its subsidiaries, or any change in control of Alpine Air, or a change in the person's responsibilities following a change in control of Alpine Air.

Stock Option Plan.

In August 2001, Alpine Air adopted an equity incentive plan. The plan allows Alpine to issue incentive stock options ("ISOs") within the meaning of section 422A of the Internal Revenue Code of 1986, as amended ("Code"), non- statutory stock options and restricted shares to employees, directors and consultants of Alpine Air. A total of 770,000 shares of Alpine Air's common stock have been reserved for issuance under the plan. As of January of each year commencing in the year 2002, the aggregate number of shares of Alpine Air's common stock that may be awarded under the plan shall automatically increase by a number equal to the lesser of (i) 7% of the total number of shares of Alpine's common stock outstanding, minus the number of shares of stock previously authorized for award under the plan at the close of the preceding calendar year or (ii) 250,000 shares of common stock.

770,000 shares of Alpine Air's common stock have been reserved for issuance under the plan. As of January of each year commencing in the year 2002, the aggregate number of shares of Alpine Air's common stock that may be awarded under the plan shall automatically increase by a number equal to the lesser of (i) 7% of the total number of shares of Alpine's common stock outstanding, minus the number of shares of stock previously authorized for award under the plan at the close of the preceding calendar year or (ii) 250,000 shares of common stock.

The exercise price of options granted under the terms of the plan must not be less than 100% of the fair market value of the shares as of the date of grant, or 110% of the fair market value for ISOs granted to optionees possessing more than 10% of the total combined voting power of all classes of stock of Alpine Air for ISOs and 85% of the fair market value of the stock for nonqualified options. In addition, the aggregate fair market value (as determined on the date of each option grant) of shares with respect to which ISOs are exercisable for the first time by an employee during any calendar year shall not exceed $100,000. Additionally, no individual may be granted more than 100,000 options in any given year.

Alpine Air has not received and does not intend to request a determination from the Internal Revenue Service that the ISOs issued under the plan will qualify under the Code for treatment as ISOs.

The plan provides that an option may be exercised by payment in cash or, with the consent of the ~~board~~Board of ~~directors~~Directors, by delivery of common stock of Alpine Air valued at its fair market value on the date of payment. An option holder shall not have any of the rights of a shareholder with respect to the shares subject to the option until the shares have been fully paid and issued.

The ~~board~~Board of ~~directors~~Directors or a committee of the directors will initially administer the plan, prescribe the form and content of options to be granted, receive elections for the exercise of stock conversion rights, determine the terms and restrictions on all restricted stock awards granted under the plan, and other items. No stock option can be granted for a period longer than ten years or for a period longer than five years for ISOs granted to optionees possessing more than 10% of the total combined voting power of all classes of stock of Alpine Air. The right to exercise an option terminates three months after the termination of an employee’s employment, unless the employee dies or is disabled, in which event the option will remain exercisable for a period of one year after the termination of employment. The plan terminates, and no further options may be granted after August 18, 2011.

In August 2001, Alpine Air issued options to acquire 547,185 shares of its common stock at an exercise price of $2.50 per share and an option to purchase 79,998 shares at an exercise price of $2.7550 per share. In 2002, Alpine Air issued options to acquire 2,562 shares of its common stock at an exercise price of $2.50 per share. All options were issued under the plan. In addition, a total of 8275,~~251~~625 options have been forfeited through October 31, 2005.

During 2006, the Company issued options to acquire 325,000 shares of its common stock at an exercise price of $0.50 per share, to employees and directors of the company. To date 110,000 of the 2006 options have been forfeited. During 2007, the Company issued options to acquire 425,278 shares of its common stock at an exercise price of $0.40 per share, to employees and directors of the company. To date 124,489 of the 2007 options have been forfeited. During 2008, the Company issued options to acquire 575,000 shares at an exercise price of $0.30 per share. To date, 247,500 of those options have been forfeited. During 2009 and 2010, no options were issued.

forfeited. During 2008, the Company issued options to acquire 575,000 shares at an exercise price of $0.30 per share. To date, 210,000 of those options have been forfeited. During 2009, no options were issued.

Compensation Committee Interlocks and Insider Participation.

There are no interlocking relationships between any member of the Company’s Compensation Committee and any member of the compensation committee of any other company, nor has any such interlocking relationship existed in the past. Two members of the Compensation Committee, Eugene R. Mallette, CEO, and Rick C. Wood, Principal Financial Officer, are officers and employees of the Company.

Compensation Committee Report.

The Compensation Committee reviews with management the Compensation Discussion and Analysis section of the Company’s ~~2009~~2010 Form 10-K, Item 11, and Proxy Statement. Based on its review and discussions with management the Compensation Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement for ~~2010~~2011 and in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, ~~2009~~2010.

The Compensation Committee consists of ~~five~~four members, Joe Etchardt (Chair), Ronald L. Pattison, ~~Kenneth D. Holliday,~~ Rick C. Wood (Ex Officio), and Max A. Hansen (Ex Officio).

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information relating to the beneficial ownership of Alpine Air's common stock as of October 31, ~~2009~~2010 by each person known by Alpine Air to be the beneficial owner of more than 5% of the outstanding shares of common stock and each of Alpine Air's directors and executive officers.

Name and Address of Principal Stockholders	Common Stock	Percentage
Eugene R. Mallette 1177 Alpine Air Way Provo, Utah 84601	27,729,465(1)	76.79%
Officers and Directors
Eugene R. Mallette, CEO and Director	27,729,465(1)	76.79%
Max Hansen, Secretary/Treasurer, Director	11,874	Less than 1%
Joseph O. Etchart, Director	1617,~~995~~445	Less than 1%
Ronald L. Pattison, Director	4257,~~600~~030	Less than 1%
All officers and directors as a group (4 persons)	27,~~800~~815,~~934~~814	7677.91%

(1) 15,000 of these shares are in the name of Mary Lou Mallette, Mr. Mallette's wife.

Unless otherwise noted above, Alpine Air believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. For purposes hereof, a person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof upon the exercise of warrants or options or the conversion of convertible securities. Each beneficial owner's percentage ownership is determined by assuming that any warrants, options or convertible securities that are held by such person (but not those held by any other person) and which are exercisable within 60 days from the date hereof, have been exercised.

Changes in Control.

There are no known arrangements known to Alpine Air, including any pledge by any person of securities of Alpine Air, the operation of which may at a subsequent date result in a change in control of Alpine Air.

Securities Authorized for Issuance under Equity Compensation Plans.

Equity Compensation Plan Information

Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a)
	(a)	(b)	(c)
Equity compensation plans approved by security holders	554,120 215,000 300,789	$2.5350 $0.50 $0.40	- - -
Equity compensation plans not approved by security holders	~~365~~327,~~000~~500 -0-	$0.30 -0-	- -
Total	1,~~434~~397,~~909~~409	$1.2124	-

Aircraft Purchase - In December 2003, the Company acquired 16 aircraft from an entity related to an officer and majority shareholder of the Company for $9,900,000. The consideration paid included $9,104,000 in preferred stock of the Company's subsidiary Alpine Aviation, Inc. and the assumption of the underlying debt on the aircraft totaling $709,981. The remaining $86,019 iswas recorded as a payable to the entity related to an officer and majority shareholder of the Company. As the aircraft were purchased from a related party they have been recorded at their carryover basis of $4,111,485. A discount on preferred stock in the amount of $3,591,195, net of tax effect of $2,197,320, ~~has~~was ~~been~~ recorded and iswas ~~being~~ amortized as dividends over a five year period. The preferred stock provides for monthly dividends at an annual rate of 6.5%, and is not convertible. However, in April 2007 the Board of Directors authorized the issuance of 1,000,000 shares of Preferred Stock in the Parent Company, Alpine Air Express, with a stated value of $9.104, which were exchanged with the holder for the outstanding preferred stock in the subsidiary. As of October 31, ~~2009~~2010 820,000 shares are still outstanding. The newly issued preferred stock in the Parent Company provides for monthly dividends at an annual rate of 6.5%, and is convertible to common stock at any time by the holder based on the current market price of the Company’s common stock. The Company can redeem the preferred stock any time and the Holder can call for redemption of the preferred stock any time after December 311, 2011.

~~Notes~~Personal ~~Payable~~Guarantee - ~~Related Party - In connection with the purchase of the aircraft the Company issued a note to an entity related to an officer and majority shareholder of the Company in the amount of $1,476,381.~~ The note payable dated July 31, 2003, bears an interest rate of 6.5% and called for payments of $33,624 due for 14 monthly installments with the balance due November 1, 2004. The entity related to an officer and majority shareholder of the Company ~~previously agreed to forestay future payment until required by the note~~'s ~~balloon~~major payment which was due November 1, 2004 but later agreed to defer all payments of principal, interest and balloon payments until November 1, 2006. Subsequently, all unpaid and accrued interest and the remaining principal balance was rolled into a new note at 6.5% interest and a 5-year term. On October 31, 2009 the balance of this note was $0. In connection with the purchase of aircraft during 2004 from an entity related to an shareholder/officer ~~and majority shareholder of the Company, the Company~~ has ~~entered~~personally ~~into~~guaranteed a ~~Note~~loan ~~Payable~~which inis ~~the~~also ~~amount~~collateralized ofby ~~$86,019. This~~certain ~~note~~aircraft ~~bears interest at 6.5%. The note holder had agreed to defer all payments~~ of ~~principal and interest until November 1, 2006. Subsequently, all unpaid and accrued interest and~~ the remaining principal balance was rolled into a new note at 6.5% interest and a 5-year term. On October 31, 2009 the balance of this note was $0. During May 2004, lease payments due to an entity related to an officer and majority shareholder of the Company ~~in the amount of $667,115 were converted into a demand note payable with interest to accrue at six and one- half (6~~.50%) percent on the principal balance. No principal or interest payments were required to be paid until November 1, 2006. Subsequently, all unpaid and accrued interest and the remaining principal balance was rolled into a new note at 6.5% interest and a 5-year term. On October 31, 2009 the balance of this note was $0.

~~Personal Guarantee - The Company's major shareholder/officer has personally guaranteed loans which are also collateralized by certain aircraft of the Company~~Parents.

Eugene A. Mallette may be deemed to be a parent of the Company due to his beneficial ownership of approximately 77% of the Company’s outstanding shares of common stock.

Director Independence.

Max A. Hansen, Joseph O. Etchardt, ~~Kenneth D. Holliday, Michael Brown,~~ and Ronald L. Pattison are all independent directors as defined in NASDAQ Rule 4200(a)(15).

ITEM 14. ~~PRINCIPAL~~Principal ~~ACCOUNTANT~~Accountant ~~FEES~~Fees ~~AND~~and ~~SERVICES~~Services.

The following is a summary of the fees billed to Alpine Air by its principal accountants during the fiscal years ended October 31, ~~2009,~~2010 ~~2008,~~ and ~~2007~~2009:

Fee category	~~2009~~2010		~~2008~~2009		~~2007~~
Audit fees	$	9493,~~500~~444	$	~~100~~94,~~182~~500	$	~~89,936~~
Audit-related fees		0		0		0
Tax fees		0		0		0
All other fees		0		0		0
Total fees	$	9493,~~500~~444	$	~~100~~94,~~182~~500	$	~~89,936~~

Audit fees - Consists of fees for professional services rendered by our principal accountants for the audit of Alpine Air's annual financial statements and the review of financial statements included in Alpine Air's Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.

Audit-related fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of Alpine Air's financial statements and are not reported under "Audit fees."

Tax fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.

All other fees - Consists of fees for products and services provided by our principal accountants, other than the services reported under "Audit fees," "Audit-related fees" and "Tax fees" above. The fees disclosed in this category include due diligence, preparation of pro forma financial statements as a discussion piece for a Board member, and preparation of letters in connection with the filing of Current Reports on Form 8-K.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors.

The Company's Audit Committee Charter does not provide for the approval in advance of the performance of professional services to be provided to the Company by its principal accountant. All services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal accountant.

~~ITEM~~PART ~~15. EXHIBITS~~IV

~~(a)~~ITEM ~~Exhibits~~15. EXHIBITS, FINANCIAL STATEMENT AND SCHEDULES.

~~31.1 302~~ (a) ~~Certification~~Financial ~~of Eugene Mallette~~Statements.

Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets at October 31~~.2 302~~, ~~Certification~~2010 and 2009 Consolidated Statements of ~~Rick~~Income C.for ~~Wood.~~the years ended October 31, 2010 and 2009 Consolidated Statement of Stockholders' Equity for the years ended October 31, 2010 and 2009 Consolidated Statements of Cash Flows for the years ended October 31, 2010 and 2009 Notes to Consolidated Financial Statements

~~32 906~~ (b) ~~Certification~~Exhibits.

~~SIGNATURES~~Exhibit

Pursuant to the requirements of with Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.Number

~~Alpine~~Description ~~Air Express, Inc.~~(1)

~~Date:~~ 3.1~~/29/2010 By: /s/Eugene Mallette~~

~~Eugene~~Certificate ~~Mallette,~~of ~~Chief~~Incorporation ~~Executive Officer and Director~~(2)

~~In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated~~ 3.2

~~Date:~~Certificate ~~1/29/2010 /s/Eugene~~of ~~Mallette~~Amendment to Certificate of Incorporation (3)

~~Eugene Mallette, Chief Executive Officer and Director~~ 3.2

~~Date:~~Bylaws ~~1/29/2010 /s/Rick C Wood~~(2)

~~Rick C Wood, Principal Financial Officer~~31.1

~~Date:~~302 ~~1/29/2010 /s/Max~~Certification A.of ~~Hansen~~Eugene Mallette

~~Max A~~31. ~~Hansen, Secretary/Treasurer and Director~~2

~~Date:~~302 ~~1/29/2010 /s/Joseph~~Certification Oof Rick C. ~~Etchart~~Wood.

~~Joseph~~32 ~~O. Etchart, Chairman~~

~~Date:~~ 906 ~~1/29/2010 /s/Kenneth D. Holliday~~Certification

~~Kenneth D. Holliday, Director~~99

~~Date:~~Certificate ~~1/29/2010 /s/Michael~~of ~~Brown~~Designations of Series A 6.5% Preferred Stock (4)

~~Michael~~(1) Summaries ~~Brown,~~of ~~Director~~all exhibits contained within this Report are modified in their entirety by reference to these Exhibits.

~~Date:~~(2) Incorporated ~~1/29/2010 /s/Ronald~~by L.reference ~~Pattison~~from our Registration Statement on Form 10-SB, filed with the Securities and Exchange Commission on August 12, 1999.

~~Ronald~~(3) Incorporated L.by ~~Pattison~~reference from our Current Report on Form 8-K dated June 12, ~~Director~~2000, filed with the Securities and Exchange Commission on August 31, 2000.

(4) Incorporated by reference from our Current Report on Form 8-K dated July 31, 2007, filed with the Securities and Exchange Commission on August 17, 2007.

SIGNATURES

Alpine Air Express, Inc.

Date: 1/26/2011 By: /s/Eugene Mallette

Eugene Mallette, Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: 1/26/2011 /s/Eugene Mallette

Eugene Mallette, Chief Executive Officer and Director

Date: 1/26/2011 /s/Rick C Wood

Rick C Wood, Principal Financial Officer

Date: 1/26/2011 /s/Max A. Hansen

Max A. Hansen, Secretary/Treasurer and Director

Date: 1/26/2011 /s/Joseph O. Etchart

Joseph O. Etchart, Chairman

Date: 1/26/2011 /s/Ronald L. Pattison

Ronald L. Pattison, Director

Filing Compare · ALPINE AIR EXPRESS INC/DE