UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


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

                      For the quarter ended March 31, 2007

                             OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 Commission file number 000-51777


                          PACIFIC ALLIANCE CORPORATION
           -----------------------------------------------------------
           (Name of Small Business Issuer as specified in its charter)

          Delaware                                          87-044584-9
-------------------------------                         -------------------
(State or other jurisdiction of                         (I.R.S. employer
incorporation or organization                           identification No.)

                      1661 Lakeview Circle, Ogden, UT 84403
                    (Address of principal executive offices)

         Registrant's telephone no., including area code: (801) 399-3632

                                       N/A
              Former     name,  former  address,  and  former  fiscal  year,  if
                         changed since last report.

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

Securities registered pursuant to Section 12(g)
of the Exchange Act:                               $.001 par value Common Stock.

Check  whether  the Issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange  Act 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. Yes [X]
No [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Common Stock  outstanding at May 15, 2007 - 36,147,050 shares of $.001 par value
Common Stock.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE









                                   FORM 10-QSB

                       FINANCIAL STATEMENTS AND SCHEDULES
                          PACIFIC ALLIANCE CORPORATION.

                      For the Quarter ended March 31, 2007

         The following financial  statements and schedules of the registrant are
submitted herewith:

                         PART I - FINANCIAL INFORMATION
                                                                                         Page of
                                                                                       Form 10-QSB
Item 1.  Financial Statements:

                                                                                           
             Balance Sheets                                                                   3

             Statements of Operations                                                         4

             Statements of Cash Flows                                                         5

             Notes to Interim Unaudited Financial Statements                              6 - 9

Item 2. Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                                           10

Item 3. Controls and Procedures                                                              15

                           PART II - OTHER INFORMATION


Item 1.      Legal Proceedings                                                               15

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds                     16

Item 3.      Defaults by the Company on its Senior Securities                                16

Item 4.      Submission of Matters to Vote of Security Holders                               16

Item 5.      Other Information                                                               16

Item 6.      Exhibits                                                                        16



                                      -2-




PACIFIC ALLIANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS
---------------------------------------------------------------------------------------------------------
                                                                                  As of
                                                                                March 31,     December 31,
                                                                                  2007           2006
                                                                               -----------    -----------
                                                                               (Unaudited)     (Audited)
                                                   ASSETS
                                                                                        
Current Assets
   Cash                                                                        $     2,289    $      --
                                                                               -----------    -----------
    TOTAL ASSETS                                                               $     2,289    $      --
                                                                               ===========    ===========

                                    LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
  Overdraft                                                                    $      --      $         6
  Accrued Interest                                                                  36,163         29,247
  Other Accrued Expenses                                                            41,143         47,985
  Notes payable                                                                    125,000        120,000
  Advances from Officer                                                            168,840        144,507
  Tax Liabilities                                                                  326,198        322,554
  Notes payable to Related Parties                                                 144,293        144,293
                                                                               -----------    -----------
    Total current liabilities                                                      841,637        808,592
                                                                               -----------    -----------

Stockholders' Deficit
  Common Stock, par value $0.001, authorized 100,000,000 shares; and
     36,147,050 and 36,083,450 shares issued and outstanding                        36,147         36,083
  Paid-in Capital                                                                3,339,249      3,332,953
  Accumulated deficit prior to the developmental stage                          (2,632,447)    (2,632,447)
  Accumulated deficit during the developmental stage                            (1,582,297)    (1,545,181)
                                                                               -----------    -----------
    Total Stockholders Deficit                                                    (839,348)      (808,592)
                                                                               -----------    -----------

    TOTAL LIABILITIES AND STOCKHOLDERS'  DEFICIT                               $     2,289    $      --
                                                                               ===========    ===========




See Notes to Interim Unaudited Financial Statements

                                      -3-





PACIFIC ALLIANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS (Unaudited)
----------------------------------------------------------------------------------------------------

                                                                                   From Inception of
                                                                                   the Developmental
                                                                                         Stage,
                                                       For the three months ended  December 21, 1995
                                                                March 31,                Through
                                                          2007            2006       March 31, 2007
                                                      ------------    ------------ -----------------
                                                                             
Operating Expenses:
   Selling, General and Administrative Expenses       $     23,022    $     34,912    $  1,186,581
   Tax Penalty and Interest Expense                          3,644           3,644         137,725
   Loss on Investment                                         --              --             6,844
   Interest Expense                                         10,450          10,704         320,222
                                                      ------------    ------------    ------------

Net Loss before Extraordinary Item                         (37,116)        (49,260)     (1,651,372)

Extraordinary Item, Gain on Forgiveness of Tax debt           --              --            69,075
                                                      ------------    ------------    ------------

Net Loss                                              $    (37,116)   $    (49,260)   $ (1,582,297)
                                                      ============    ============    ============

Net Loss per share, Basic and Diluted                         --              --
                                                      ============    ============

Weighted Average Number of Shares                       36,104,650      15,555,000
                                                      ============    ============





See Notes to Interim Unaudited Financial Statements


                                      -4-





PACIFIC ALLIANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (Unaudited)
--------------------------------------------------------------------------------------------------------------------

                                                                                                   From Inception of
                                                                                                   the Developmental
                                                                                                        Stage,
                                                                      For the three months ended   December 21, 1995
                                                                               March 31,                Through
                                                                          2007            2006      March 31, 2007
Flow from Operating Activities:                                       ------------    ------------ -----------------
                                                                                           

  Net Loss                                                            $   (37,115)   $   (49,260)   $(1,582,296)
  Adjustments to Reconcile Net Loss to Net Cash Used in Operations:
      Loss on investments                                                    --             --            6,844
      Gain on forgiveness on tax debt                                        --             --          (69,075)
      Stock issued for services                                             6,360         22,320        540,465
  (Increase) Decrease in:
      Accounts receivable                                                    --             --           95,841
  Increase (Decrease) in:
      Accrued expenses                                                         73          6,697        234,366
      Tax liabilities                                                       3,644          3,645        (49,639)
                                                                      -----------    -----------    -----------
  Net Cash Used in Operating Activities                                   (27,038)       (16,598)      (823,494)
                                                                      -----------    -----------    -----------

Cash Flow from Investing Activities
      Purchase of investments                                                --             --          (30,180)
      Proceeds from sale of investments                                      --             --           23,336
                                                                      -----------    -----------    -----------
  Net Cash Used In Investing Activities                                      --             --           (6,844)
                                                                      -----------    -----------    -----------

Cash Flow from Financing Activities:
      Bank overdraft                                                           (6)        (3,360)        (2,587)
      Proceeds from notes payable                                           5,000         60,000        211,486
      Payments of note payable                                               --             --          (51,277)
      Net Proceeds from notes payable to related parties                     --            1,500        119,084
      Advance from officer                                                 30,300         51,200        818,046
      Repayment of advance from officer                                    (5,967)       (78,236)      (546,974)
      Proceeds from issuance of common stock                                 --             --           25,000
      Proceeds from common stock subscription                                --             --          259,849
                                                                      -----------    -----------    -----------
  Net Cash Flow Provided by Financing Activities                           29,327         31,104        832,627
                                                                      -----------    -----------    -----------

    Net Increase in Cash                                                    2,289         14,506          2,289

Cash Balance at Beginning of Period                                          --             --             --
                                                                      -----------    -----------    -----------

Cash Balance at End of Period                                         $     2,289    $    14,506    $     2,289
                                                                      ===========    ===========    ===========





Supplemental Disclosures of Cash Flow Information
      Interest paid                                                   $     3,034    $     7,765           --



See Notes to Interim Unaudited Financial Statements



                                      -5-


PACIFIC ALLIANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Going Concern Pacific Alliance Corporation (the "Company") is a
development  stage  Company  and  attempts to locate a new  business  (operating
company),  and offer itself as a merger vehicle for a company that may desire to
go public through a merger rather than through its own public stock offering.

Pacific Alliance  Corporation,  whose name was changed from Pacific Syndication,
Inc. in 1997, was originally incorporated in December 1991 under the laws of the
State of Delaware.  It also became a  California  corporation  in 1991.  Pacific
Syndication, Inc. was engaged in the business of videotape duplication, standard
conversion and delivery of television programming. In 1994, Pacific Syndication,
Inc. merged with Kaiser Research, Inc.

The Company  filed a petition for Chapter 11 under the  Bankruptcy  Code in June
1995. The debtor in possession  kept operating until December 21, 1995, when all
assets,  except  cash  and  accounts  receivable,  were  sold to a third  party,
Starcom. The purchaser assumed all post-petition liabilities and all obligations
collateralized by the assets acquired.

In 1997, a  reorganization  plan was approved by the Bankruptcy  Court,  and the
remaining  creditors of all  liabilities  subject to  compromise,  excluding tax
claims,  were issued  1,458,005  shares of the  Company's  common stock in March
1998,  which  corresponds  to one share for every dollar of  indebtedness.  Each
share of common  stock  issued  was also  accompanied  by an A  warrant  and a B
warrant (see note 6). The IRS portion of tax  liabilities was payable in cash by
quarterly  installments  (see note 2).  Repayment  of other taxes is still being
negotiated.

The  accompanying  financial  statements  have been  prepared on a going concern
basis, which contemplated the March 31, 2007 financial  statements,  the Company
did not generate any revenue,  and has a net capital  deficiency.  These factors
among others may indicate that the Company will be unable to continue as a going
concern for a reasonable  period of time. For the first three months ended March
31, 2007, the Company funded its  disbursements  using loans from an officer and
other related parties.

Presentation of Interim Information The financial  information at March 31, 2007
and for the three  months  ended  March  31,  2007 and 2006 are  unaudited,  but
includes all adjustments  (consisting only of normal recurring adjustments) that
the  Company  considers  necessary  for a fair  presentation  of  the  financial
information set forth herein, in accordance with accounting principles generally
accepted in the United  States of America  ("U.S.  GAAP") for interim  financial
information,  and  with  the  instructions  to Form  10-QSB.  Accordingly,  such
information  does not include all of the information  and footnotes  required by
U.S. GAAP for annual financial statements.  For further information refer to the
Financial  Statements  and footnotes  thereto  included in the Company's  Annual
Report on Form 10-KSB for the year ended December 31, 2006.

The balance  sheet as of December  31,  2006 has been  derived  from the audited
financial  statements  at that date but does not include all of the  information
and footnotes required by U.S. GAAP for complete financial statements.

The results for the three months ended March 31, 2007 may not be  indicative  of
results for the year ending December 31, 2007 or any future periods.

Use of estimates The  preparation of the  accompanying  financial  statements in
conformity with accounting  principles  generally  accepted in the United States
(U.S. GAAP) requires  management to make certain  estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

                                      -6-


PACIFIC ALLIANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income (Loss) Per Common Share The Company  accounts for income (loss) per share
in accordance with Statement of Financial  Accounting  Standards (SFAS) No. 128,
"Earnings  Per Share."  SFAS No. 128  requires  that  presentation  of basic and
diluted earnings per share for entities with complex capital  structures.  Basic
earnings  per share  includes no dilution and is computed by dividing net income
(loss) available to common stockholders by the weighted average number of common
stock  outstanding  for the period.  Diluted  earnings  per share  reflects  the
potential  dilution of securities that could share in the earnings of an entity.
Diluted net loss per common share does not differ from basic net loss per common
share as the Company lacks of dilutive items.

New  Accounting  Pronouncements  In  February  2007,  the  Financial  Accounting
Standards Board ("FASB') issued Financial  Accounting Standards ("FAS") No. 159,
The Fair Value Option for Financial Assets and Financial Liabilities - Including
an amendment of FASB  Statement  No. 115,  which  permits  entities to choose to
measure  many  financial  instruments  and certain  other items at fair value at
specified  election  dates. A business  entity is required to report  unrealized
gains and  losses on items for which the fair value  option has been  elected in
earnings at each subsequent reporting date. This statement is expected to expand
the use of fair  value  measurement.  FAS  No.159  is  effective  for  financial
statements  issued for fiscal years  beginning  after  November  15,  2007,  and
interim periods within those fiscal years.

In September 2006, the FASB issued FAS No. 157, Fair Value Measurements. FAS No.
157 defines fair value,  establishes  a framework  for  measuring  fair value in
generally accepted  accounting  principles,  and expands  disclosures about fair
value  measurements.  This  statement  addresses  how to  calculate  fair  value
measurements  required  or  permitted  under  other  accounting  pronouncements.
Accordingly,  this statement  does not require any new fair value  measurements.
However, for some entities, the application of the statement will change current
practice.  FAS No. 157 is effective for the Company  beginning  January 1, 2008.
The Company is currently evaluating the impact of this standard.

In September 2006, the Securities and Exchange  Commission  ("SEC") staff issued
Staff Accounting Bulletin No. 108 ("SAB 108"),  Considering the Effects of Prior
Year  Misstatements  when  Quantifying  Misstatements  in Current Year Financial
Statements.  The stated purpose of SAB 108 is to provide consistency between how
registrants quantify financial statement misstatements.

Prior to the issuance of SAB 108, there have been two widely-used methods, known
as the  "roll-over"  and "iron curtain"  methods,  of quantifying the effects of
financial statement misstatements. The roll-over method quantifies the amount by
which the current  year income  statement  is  misstated  while the iron curtain
method  quantifies the error as the cumulative  amount by which the current year
balance  sheet is misstated.  Neither of these  methods  considers the impact of
misstatements on the financial statements as a whole.

SAB 108  established  an approach  that  requires  quantification  of  financial
statement  misstatements based on the effects of the misstatement on each of the
Company's financial statements and the related financial statement  disclosures.
This   approach  is  referred  to  as  the  "dual   approach"   as  it  requires
quantification of errors under both the roll-over and iron curtain methods.

SAB 108  allows  registrants  to  initially  apply the dual  approach  by either
retroactively  adjusting prior financial  statements as if the dual approach had
always been used, or by recording the  cumulative  effect of initially  applying
the  dual  approach  as  adjustments  to  the  carrying  values  of  assets  and
liabilities as of January 1, 2006 with an offsetting  adjustment recorded to the
opening balance of retained earnings.

The Company will initially apply SAB 108 using the cumulative  effect transition
method in connection with the preparation of the annual financial statements for
the year ending  December 31, 2006. The Company does not believe the adoption of
SAB 108 will have a significant effect on its consolidated financial statements.


                                      -7-

PACIFIC ALLIANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS


NOTE 2- TAX LIABILITIES

The  Company  owes  back  taxes  to the IRS,  California  Franchise  Tax  Board,
California  State Board of Equalization,  and County of Los Angeles,  before the
bankruptcy.  The Company is  attempting to negotiate  settlements  and the final
amount may differ from the amount recorded on the balance sheets.

The IRS portion of tax  liabilities  was payable in quarterly  installments of $
11,602, and the final payment was due in January 2002. However, no payments have
been made since April 2000.  As of March 31, 2007,  the Company owes $271,966 to
the IRS. The taxes owed to IRS are  delinquent  and accruing  interest at 9% per
annum.

As of March 31, 2007, the Company owes $5,454 to California Franchise Tax Board.
No payments have been made and the taxes owed to California  Franchise Tax Board
are  delinquent.  No interest is being accrued;  however,  a protection  lien is
being filed.

As of March 31,  2007,  the Company owes  $41,586 to  California  State Board of
Equalization.  No payments have been made and the taxes owed to California State
Board of Equalization are delinquent and accruing an interest at 9% per annum.

 As of March 31, 2007, the Company owes $7,192 to the County of Los Angeles.  No
payments  have been made and the taxes  owed to the  County of Los  Angeles  are
delinquent and accruing an interest at 9% per annum.


NOTE 3- INCOME TAXES

The Company has loss  carryforwards  available to offset future taxable  income.
The total loss carryforwards at December 31, 2006 are estimated at approximately
$1,590,000 and expire between 2015 and 2026. Loss  carryforwards  are limited in
accordance  with the rules of change in  ownership.  A  valuation  allowance  is
recorded for the full amount of deferred tax assets of  approximately  $540,000,
which   relates  to  these  loss   carryforwards,   since  future   profits  are
indeterminable.  The valuation  allowance  increased by $47,000  during the year
ended December 31, 2006.


NOTE 4- SHORT TERM NOTE PAYABLE

During the first three months of 2007, the Company  obtained loans for the total
amount of $5,000 from third parties.  The new loans bear interest at 10% and are
due on demand.

As of March 31, 2007,  the balance for notes  payable was  $125,000,  and it was
$120,000 as of December 31, 2005.


NOTE 5- NOTES PAYABLE TO RELATED PARTIES

Notes  payable to minority  shareholders  amounted to $144,293 at March 31, 2007
and at December 31, 2006.  These notes bear  interest at 10% to 12%, and are due
on demand.


NOTE 6 - COMMON STOCK

During the first three  months of 2007,  the  Company  issued  63,600  shares of
common stock for management services, pursuant to the provisions of the Modified
Plan of Reorganization approved by the U.S. Bankruptcy Court in 1997. The stocks
were valued $0.10 per share, or $6,360 of total.


                                      -8-

PACIFIC ALLIANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS



NOTE 7 - NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per
share:

                                                        Three Months Ended
                                                             March 31,
                                                  ----------------------------
                                                      2007             2006
                                                  -------------   ------------
           Numerator:
             Net Loss                             $    (37,115)   $    (49,260)
                                                  ------------    ------------
           Denominator:
             Weighted Average Number of Shares      36,104,650      15,555,000
                                                  ------------    ------------

           Net loss per share-Basic and Diluted           --              --
                                                  ============    ============




NOTE 8 - RELATED PARTY TRANSACTIONS

An officer of the  Company  advanced  $30,300  to the  Company  during the three
months ended March 31, 2007.  The Company  repaid the officer  $5,967 during the
three months ended March 31, 2007.  These advances bear interest at 10% and have
no maturity date. The balance of advances was $168,840 at March 31, 2007.

During the quarter ended June 30, 2002,  the Company  passed a resolution to pay
rent, office and secretarial  services to a stockholder of the Company at a rate
of $500 per month.  These charges were  retroactive to July 1997,  subsequent to
the date of approval of the  reorganization  plan by the  Bankruptcy  court.  As
such,  $1,500 was recorded as expense during the three months period ended March
31, 2007 and 2006.

In  accordance  with the modified  joint plan or  reorganization,  management is
compensated on an hourly basis at a rate of $75 per hour.  Such  compensation is
made  through  issuance of common  stock.  Management  compensation  amounted to
$6,360 for the three months ended March 31, 2007 (see note 6).


NOTE 9 - OTHER ACCRUED EXPENSES

Accrued expenses consist of:
                                                     March 31,
                                             -----------------------
                                                 2007        2006
                                             ----------   ----------
                 Accrued Professional Fees   $   26,609   $   33,952
                 Accrued Expenses                14,534       14,033
                                             ----------   ----------
                          Total              $   41,143   $   47,985
                                             ==========   ==========



                                      -9-



                                     ITEM 2
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General
-------

         Pacific Alliance  Corporation (the "Company") is a Delaware corporation
which is currently inactive.  The Company was previously engaged in the business
of distributing television programming.  On June 23, 1995, the Company filed for
protection  under Chapter 11 of the United States  Bankruptcy Code (Case No. BK.
No. SV  95-14737  KL).  On May 28, 1997 (the  "Confirmation  Date"),  the United
States  Bankruptcy  Court for the Central  District of California  Confirmed the
Company's  Modified  Plan of  Reorganization  (the  "Plan")  and  First  Amended
Disclosure  Statement (the  "Disclosure  Statement").  The Effective Date of the
Plan was June 8, 1997.  On February 23, 2000,  United  States  Bankruptcy  Judge
entered a "Final  Decree Order  Pursuant to Bankruptcy  Code Section  350",  and
thereby  issued a final decree  closing the  bankruptcy  case.  The claim by the
Internal Revenue Service was not discharged by the Final Decree Order.

History
-------

         The Company was organized on April 22, 1986 under the laws of the State
of Utah under the name of Kaiser Research, Inc. On December 2, 1994, the Company
changed its domicile  from the State of Utah to the State of Delaware  through a
reincorporation  merger.  In order to effect  the  reincorporation  merger,  the
Company  formed a wholly-owned  subsidiary  under Delaware law under the name of
PACSYND,  Inc.  After the  change  of the  Company's  domicile,  it  acquired  a
privately  held  corporation  ("Private  PSI") in a merger  transaction,  and in
connection  therewith,  the Company's  name was changed to Pacific  Syndication,
Inc.

         After the acquisition of Private PSI in December 1994, and prior to its
filing of a Petition  under  Chapter 11, the Company was engaged in the business
of  transmitting  television  programming to television  stations and others via
satellite or land deliveries on behalf of production companies,  syndicators and
other distributors of television  programming.  Although the Private PSI was not
the survivor of the Merger, and did not exist after the Merger,  pursuant to the
accounting requirements of the Securities and Exchange Commission the Merger was
treated as a "reverse merger" and, solely for accounting  purposes,  Private PSI
was deemed to be the survivor.

         Private  PSI was  formed  under  the laws of the State of  Delaware  in
November  1991.  Private PSI was formed to engage in the business of providing a
variety of television  industry related  services to its clients.  Such services
included, but were not limited to, video tape duplication,  standards conversion
and delivery of television  programming by way of conventional carriers (such as
UPS, Airborne and Federal Express) and by satellite or fiber optic transmission.



                                      -10-



         Private PSI  provided  its  clients  (primarily  television  producers,
programmers  and  syndicators)  with  several  related but  different  services,
including distribution of syndicated programming to television stations, program
mastering  and standards  conversion,  infomercial  customization  and delivery,
master  tape  and  film  storage,   library  distribution   services  and  video
integration and delivery  services.  Private PSI developed its own tape tracking
and vault library  management system and a system for infomercial  customization
and voice-over integration.

         From its  inception,  Private PSI was  undercapitalized.  It funded its
initial operations through the factoring of its accounts receivable. The Company
was  unable  to  commence  operations  in the  television  programming  services
business  and  ultimately,  substantially  all of its  assets  were  sold and it
discontinued its operations.

Chapter 11 Plan of Reorganization
---------------------------------

         On June 23, 1995,  the Company filed a Petition under Chapter 11 of the
U.S.  Bankruptcy  Code.  As of December  1995,  the Company had sold most of its
assets, reduced its debt and terminated its operations.  By that date, there was
no trading market in the Company's  securities.  In 1996,  Troika Capital,  Inc.
("Troika"),  a Utah  corporation,  agreed to assist the Company in  developing a
Plan of  Reorganization  which would provide the Company,  its  shareholders and
creditors  with at  least  a  possibility  of  recouping  all or  some of  their
investment in the Company or the debts owed to them by the Company.  Troika is a
privately-owned  Utah  corporation  which has been  involved in various  company
formations, mergers and financings.

         Mark A.  Scharmann,  the President of Troika,  and now the President of
the Company, and his affiliates,  were shareholders of the Company and creditors
of the Company at the time the Company commenced its bankruptcy proceeding.  Mr.
Scharmann  was a founder of the Company in 1986 and was an original  shareholder
of the Company.  At the time the Company acquired Private PSI, he resigned as an
officer and director of the Company but remained a shareholder  and later became
a creditor of the Company.  Many of the investors in the Company are friends and
acquaintances  of Mr.  Scharmann.  The  Company  believed  that  if it  were  to
liquidate, there would be a total loss to creditors and shareholders. Because of
his own equity and debt  investment in the Company,  and his  relationship  with
other shareholders and creditors of the Company,  Mr. Scharmann agreed,  through
Troika,  to develop a business plan for the Company and to attempt to assist the
Company in carrying out such plan.

         The Plan of  Reorganization  developed  for the  Company  by Troika was
essentially as follows:

         1.  Eliminate  all  non-tax  liabilities  of the  Company  through  the
conversion of debt into equity.

         2. Replace the current  officers and  directors of the Company with new
management. The new management includes the following: Mark Scharmann, Dan Price
and David Knudson.


                                      -11-



         3. File all required  Securities and Exchange  Commission reports which
may be necessary to bring the Debtor  current in its filing  requirements  under
Section  15(d) of the 1934 Act.  File all SEC  reports  which  become due in the
future.

         4. File any tax returns  which are in arrears and file all required tax
returns and reports which become due in the future.

         5. Use existing  cash of the Company to pay  quarterly tax payments and
for working capital.

         6. Prepare and bring current, the financial statements of the Company

         7. Attempt to raise  additional  cash to be used to fund  quarterly tax
payments and for working capital.

         8. Locate a private-company which is seeking to become a public company
by merging with the Company.

         9. Assist the  Company in  completing  any merger  which is located and
which the Board of Directors deems appropriate.

         10.  Assist  the  post-merged   company  with  shareholder   relations,
financial  public  relations  and with attempts to interest a  broker-dealer  in
developing a public market for the Company's  common stock so that the Company's
shareholders  (including  creditors  whose debt was converted into shares of the
Company's  common stock) may ultimately  have an opportunity to liquidate  their
shares for value in market or in privately negotiated transactions.

         The Plan and Disclosure Statement was confirmed by the Bankruptcy Court
on May 28, 1997. The Effective Date of the Plan was June 8, 1997.  Subsequent to
the Effective Date of the Plan, the Company filed monthly  "Debtor in Possession
Interim Statements" and "Debtor in Possession Operating Reports" with the Office
of the United States Trustee.  On February 23, 2000, the Bankruptcy  Court Judge
entered a Final Decree Order closing the Bankruptcy case of the Company.

Post Confirmation Date Activities
---------------------------------

         Since the Confirmation of the Plan of Reorganization the following have
occurred:

         1.  Pre-Confirmation  Date non-tax debt in the amount of  approximately
$1,458,000 was converted into 1,458,005 shares of the Company common stock.

         2.  The Company  completed  its audited  financial  statements  for the
years ended December 31, 1996 through 2006.


                                      -12-



         3.The  Company  effected  a 1-for-6  reverse  split of its  issued  and
outstanding  common  stock  in  order  to  establish  a more  desirable  capital
structure for potential merger partners.

         4.The Company changed its name to Pacific Alliance Corporation.

         5.The Company obtained the preliminary agreement of a registered-broker
to make a market in the Company's common stock.

         6.The Company filed an application for approval of secondary trading in
its common stock with the Division of  Securities of the State of Utah. An Order
Granting such application was issued by the Utah Division of Securities.

         7.The  Company  prepared  and filed a Form  10-KSB for the years  ended
December 31, 1997 through December 2006, and all required Forms 10-QSB.

Financial Condition

         Total assets at March 31, 2007 was $2,289. As of December 31, 2006, the
Company had $0 of assets and liabilities of $808,592.

         The Company's total liabilities as of March 31, 2007 were $841,637. The
Company's  liabilities  include,  but are not  limited to,  $168,840  loans from
officers,  $36,163  accrued  interest,  $41,143  of accrued  expenses,  $326,198
attributed to tax liabilities, and $144,293 of notes payable to related parties.

         It is likely  that the Company  will be  required  to raise  additional
capital in order to attract any potential  acquisition  partner but there can be
no assurance that the Company will be able to raise any additional  capital.  It
is also likely that any future  acquisition will be made through the issuance of
shares of the  Company's  common  stock which will result in the dilution of the
percentage ownership of the current shareholders.

Results of Operations
---------------------

         The Company has generated no revenues  since the  Confirmation  Date of
its Bankruptcy  Reorganization.  The Company will not generate any revenues,  if
ever, until and unless it merges with an operating  company or raises additional
capital for its own  operations.  There can be no assurance  that either of such
events will happen.

                                      -13-


         The Company had a net loss of $37,116 for the three  months ended March
31,  2007.  This  compares to a net loss of $49,260 for the three  months  ended
March 31, 2006. The Company's expenses for the three months ended March 31, 2007
consisted of  management  compensation,  professional  fees,  interest and other
expenses.  We  issued  63,600  shares  of  our  common  stock  to  officers  for
compensation  during the quarter end March 31,  2007.  The shares were valued at
$.10 per share.

Plan of Operation
-----------------

         The  Company's  current  business plan is to serve as a vehicle for the
acquisition of, or the merger or  consolidation  with another company (a "Target
Business").  The Company intends to utilize its limited  current assets,  equity
securities, debt securities,  borrowings or a combination thereof in effecting a
Business  Combination  with a Target  Business  which the Company  believes  has
significant growth potential. The Company's efforts in identifying a prospective
Target Business are expected to emphasize  businesses  primarily  located in the
United  States;  however,  the  Company  reserves  the right to acquire a Target
Business  located  primarily  elsewhere.  While the Company may,  under  certain
circumstances,  seek to effect Business  Combinations  with more than one Target
Business,  as a  result  of its  limited  resources  the  Company  will,  in all
likelihood, have the ability to effect only a single Business Combination.

         The Company may effect a Business  Combination  with a Target  Business
which may be  financially  unstable  or in its early  stages of  development  or
growth.  To the  extent  the  Company  effects  a  Business  Combination  with a
financially  unstable  company or an entity in its early stage of development or
growth (including  entities without  established  records of revenue or income),
the Company will become  subject to numerous  risks inherent in the business and
operations of financially  unstable and early stage or potential emerging growth
companies.  In  addition,  to the  extent  that the  Company  effects a Business
Combination with an entity in an industry characterized by a high level of risk,
the Company will become subject to the currently  unascertainable  risks of that
industry.  An  extremely  high level of risk  frequently  characterizes  certain
industries which experience rapid growth.  Although  management will endeavor to
evaluate the risks inherent in a particular  industry or Target Business,  there
can be no  assurance  that the Company  will  properly  ascertain  or assess all
risks.

Other Matters
-------------

         The Company will not effect any merger unless it first obtains approval
from its shareholders.  In connection with obtaining  shareholder  approval of a
proposed  merger,  the Company  will  distribute  a Proxy,  Notice of Meeting of
Stockholders and Proxy Statement which contains  information  about the proposed
acquisition transaction.  Such information will likely include audited financial
statements and other financial  information  about the acquisition  target which
meets the requirements of Form 8-K as promulgated under the Securities  Exchange
of 1934,  as  amended,  resumes of  potential  new  management,  description  of
potential risk factors which  shareholders  should  consider in connection  with
their  voting on the  proposed  acquisition  and a  description  of the business
operations of the acquisition target.

                                      -14-


Risk Factors
------------

         During the quarter ended March 31, 2007, there were no material changes
to the quantitative and qualitative  disclosures of our Risk Factors  previously
reported in the Annual  Report  contained in the  Company's  Form 10-KSB for the
year ended December 31, 2006.

         Troika and its affiliate will vote all of their shares of the Company's
common  stock for or against  any merger  proposal  in the same ratio  which the
shares  owned  by  other   shareholders  are  voted.   This  will  permit  other
shareholders to be able to effectively  determine  whether the Company  acquires
any particular Operating Company. The merger will be effected only if a majority
of the other shareholders attending the meeting of shareholders in person and/or
by proxy,  vote in favor of such proposed  merger.  The shares of Troika and its
affiliates  will be included  for  purposes of  determining  whether a quorum of
shareholders is present at the meeting.

                         ITEM 3. CONTROLS AND PROCEDURES
                EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

(a)      Evaluation of Disclosure Controls and Procedures
         ------------------------------------------------

         Based  on  their  evaluations  as of  March  31,  2007,  the  principal
executive officer and principal  financial officer of the Company have concluded
that the  Company's  disclosure  controls  and  procedures  (as defined in Rules
13a-15(e)  and  15d-15(e)  under the  Securities  Exchange Act) are effective to
ensure that information  required to be disclosed by the Company in reports that
the Company  files or submits  under the  Securities  Exchange  Act is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
rules and forms of the SEC.

(b)      Changes in Internal Controls
         ----------------------------

         There were no significant  changes in the Company's  internal  controls
over  financial  reporting or in other factors that could  significantly  affect
these internal controls  subsequent to the date of their most recent evaluation,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.
         -----------------

         None.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

         During the  quarter  ended  March 31,  2007 we issued the shares of our
common stock to our officers for  compensation.  We issued 22,500 shares to Mark
Scharmann  for services  valued at $2,250 and 41,100 shares to David Knudson for
services  valued at  $4,110.  The $.10 per share  price for these  services  was
established  in  the  Bankruptcy  Plan  of  Reorganization  referred  to in  the
Management's Discussion and Analysis section of this Form 10-QSB.


                                      -15-




Item 3.   Defaults by the Company on its Senior Securities.
          ------------------------------------------------

          None.

Item 4.   Submission of Matters to Vote of Security Holders.
          -------------------------------------------------

          None.

Item 5.   Other Information.
          ------------------

Item 6.   Exhibits. 31.1            Certification  of  Chief  Executive  Officer
                                    Pursuant  to  Section  302 of  the  Sarbanes
                                    Oxley Act of 2002.

                    31.2            Certification  of  Chief  Financial  Officer
                                    Pursuant  to  Section  302 of  the  Sarbanes
                                    Oxley Act of 2002.

                    32.1            Certification  of  Chief  Executive  Officer
                                    Pursuant  to  Section  906 of  the  Sarbanes
                                    Oxley Act of 2002.

                    32.2            Certification  of  Chief  Financial  Officer
                                    Pursuant  to  Section  906 of  the  Sarbanes
                                    Oxley Act of 2002.

                                    SIGNATURE

         In accordance  with the  requirements  of the Exchange Act, the Company
has caused this report to be signed on its behalf by the  undersigned  thereunto
duly authorized.

Dated: May 17, 2007                  PACIFIC ALLIANCE CORPORATION

                                     By /s/ Mark A. Scharmann
                                     -------------------------------------------
                                     President/Principal Executive Officer

                                     By /s/ David Knudson
                                     -------------------------------------------
                                     Principal Financial Officer



                                      -16-