LTHO Legacy Technology Holdings Inc (CE)

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

FORM 10-KSB/A

(Mark One)

|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the fiscal year ended December 31, 2007

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ____________ to _____________.

Commission File Number: 000-50294

(Exact name of registrant as specified in its charter)

 Colorado 84-1426725
 --------------------- -----------------------
 (State of incorporation) IRS Employer ID Number

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

Securities registered pursuant to Section 12(g) of the Act:

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: [X] Yes [__] No

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB [ X ]

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

State issuer's revenues for its most recent fiscal year: $0

As of the close of trading on April 10, 2008, there were 10,060,534 common shares were issued and outstanding, 4,424,934 shares of which were held by non-affiliates. The aggregate market value of the common shares held by non-affiliates, based on the price at which the common equity was sold on April, 10, 2008, was approximately $176,977.

DOCUMENTS INCORPORATED BY REFERENCE

None

Transitional Small Business Disclosure Format (check one): YES [ ] NO [ X ]

Explanatory Note

This Form 10KSB/A (the "Amendment") amends are Form 10KSB for the year ended December 31, 2007, which was filed with the Securities and Exchange Commission on April, 2008 (the "Original Filing"). We are filing this Form 10KSB/A to amend Item 8A "controls and Procedures."

In connection with the filing on this Form 10KSB/A and pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, we are including with this Form 10KSB/A certain currently dated certifications.

This Amendment does not reflect events occurring after the Original Filing and the Company has not otherwise updated disclosures contained therein or herein t reflect events that occurred at a later date.

TABLE OF CONTENTS

PART I PAGE

 Item 1. Description of Business 1
 Item 2. Description of Property 2
 Item 3. Legal Proceedings 2
 Item 4. Submission of Matters to a Vote of Security Holders 2

PART II

 Item 5. Market for Common Equity and Related Stockholder Matters 2
 Item 6. Management's Discussion and Analysis or Plan of Operation 4
 Item 7. Financial Statements 6
 Item 8. Changes in and Disagreements With Accountants on Accounting 6
 and Financial Disclosure
 Item 8a. Controls and Procedures 7
 Item 8A (T). Controls and Procedures 8
 Item 8b. Other Information 8

PART III

 Item 9. Directors, Executive Officers, Promoters and Control Persons;
 Compliance with Section 16(a) of the Exchange Act 9
 Item 10. Executive Compensation 11
 Item 11. Security Ownership of Certain Beneficial Owners and Management 14
 Item 12. Certain Relationships and Related Transactions 15
 Item 13. Exhibits and Reports on Form 8-K 16
 Item 14. Principal Accountant Fees and Services 16

SIGNATURES 17

This annual report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of these terms or other comparable terminology. These statements are only predictions and may involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors," that may cause our or our industry's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

PART I

Company History

Life USA, Inc. (the "Company") was originally incorporated in Colorado in January, 1997. To solve an administrative dissolution it reincorporated in 2002. An administrative dissolution is an action taken by the Secretary of State to cancel it as a corporation due to failure to file an annual report and pay an annual fee.

In September 2005, the Company and Neuro Nutrition, Inc. ("Neuro") signed an agreement whereby, the Company acquired all of the issued and outstanding shares of Neuro in exchange for 8,300,000 shares of the Company's common stock. Neuro became a wholly owned subsidiary of the Company.

Neuro was incorporated on July 23, 2004, as 4 Your Life Nutrition Inc. ("4 Your Life Nutrition"), in the state of Colorado, and has been in the development stage since incorporation. 4 Your Life Nutrition did not have any operational activity until January 2005. On January 6, 2005, the name was changed to Neuro Nutrition Inc. It was primarily organized for the purpose of distributing health supplements.

In January 2007, the Company ceased the operations of Neuro. The Company has been unable to continue Neuro's operations due to financial constraints. At this time, the current management of the Company is in the process of developing a new business plan.

BUSINESS

Plan of Operations

Prior to the cessation of its operations in January 2007, the Company operated as a nutraceutical marketing and distribution company with a strategic focus of acquiring intellectual property and processes. The Company intended to market and distribute nutritional products and services in a way that appeals to its target market.

Proprietary Krill Blend

Krill oil is 100% natural and is marketed to promote cellular integrity and cardiovascular function. Rich in Omega-3, 6 and 9 fatty acids, krill oil provides more benefits than fish oil or flax seed. Independent science on krill oil indicates it supports nerve and brain function, joint relief, relieves PMS-related symptoms, maintains healthy skin, and supplies anti-oxidant nourishment to help the body retain its natural buoyancy, youthfulness, and overall quality of life.

The Company's previous operations have consumed substantial amounts of cash, and operational cash flows are anticipated to be negative for the foreseeable future. There is substantial doubt about our ability to continue as a going concern.

The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.

No director, officer or affiliate of the Company, and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to any litigation.

The Company did not hold any shareholders' meeting or submit any items for shareholder's approval during the year ended December 31, 2007.

The Company began trading its shares on Over-the-Counter Bulletin Board on May 31, 2006, under the trading symbol "LFUI.OB". The table below sets forth the high and low bid prices of the Registrant's common stock for the periods indicated. Such prices are inter-dealer prices, without mark-up, mark-down or commissions and do not necessarily represent actual sales.

2006(1/1/06 through 12/31/06)

 High Low
 ---- ---
March 31, 2006 $0.00 $0.00
June 30, 2006 0.30 0.30
September 30, 2006 0.30 0.30
December 31, 2006 0.02 0.02

2007 High Low
 ---- ---
March 31, 2007 $0.08 $0.08
June 30, 2007 0.07 0.06
September 30, 2007 0.05 0.05
December 31, 2007 0.05 0.05

As of December 31, 2007, there were 109 shareholders of record of the Company's common stock.

PENNY STOCK RESTRICTIONS

For transactions covered by the penny stock rules, the broker-dealer must make a suitability determination for each purchaser and receive the purchaser's written agreement prior to the sale. In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the SEC. So long as Life USA's common shares are considered "penny stocks", many brokers will be reluctant or will refuse to effect transactions in Life USA's shares, and many lending institutions will not permit the use of penny stocks as collateral for any loans.

Effective August 11, 1993, the Securities and Exchange Commission (the "Commission") adopted Rule 15g-9, which established the definition of a "penny stock," for purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person's account for transactions in penny stocks; and (ii) that the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination; and (ii) states that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

DIVIDENDS

The Company has neither declared nor paid any cash dividends on its common stock, and it is not anticipated that any such dividend will be declared or paid in the foreseeable future.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause Life USA, Inc. actual results to be materially different from any future results expressed or implied by Life USA, Inc. in those statements. Important facts that could prevent Life USA, Inc. from achieving any stated goals include, but are not limited to, the following:

(a) volatility or decline of the Company's stock price;

(b) potential fluctuation in quarterly results;

(c) failure of the Company to earn revenues or profits;

(d) inadequate capital to continue or expand its business, inability to raise additional capital or financing to implement its business plans;

(e) failure to make sales on an increasing basis;

(f) rapid and significant changes in markets;

(g) litigation with or legal claims and allegations by outside parties; (h) insufficient revenues to cover operating costs.

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-QSB and Annual Report on Form 10-KSB filed by the Company in 2007 and any Current Reports on Form 8-K filed by the Company.

The Company acquired Neuro Nutrition, Inc. as a wholly owned subsidiary, in September 2005, in exchange for 8,300,000 shares of common stock. The parent company, Life USA, Inc. had no operations until the acquisition of its subsidiary, Neuro Nutrition, Inc. The operations of Neuro are presented in this report as the successor company.

In January 2007, the Company ceased the operations of Neuro Nutrition, its wholly-owned subsidiary, due to financial constraints. The financial activities of Neuro Nutrition, Inc. are shown as discontinued activities in the Company's financial statements. At this time, the current management of the Company is in the process of developing a new business plan, and is seeking an acquisition.

During the years ended December 31, 2007 and 2006, we did not recognize any revenues from continuing operations.

During the year ended December 31, 2007, we incurred operational expenses of $52,189 from continuing operations, consisting of general and administrative expenses. During the year ended December 31, 2007, we incurred operational expenses of $304,189 from continuing operations. The decrease of $252,000 was a result of the minimization of our operations over the prior year. During the year ended December 31, 2006, we issued options to our then officers and directors and incurred a compensation expense of $96,847, which we did not incur in the year ended December 31, 2007.

During the year ended December 31, 2007, we incurred interest expense of $107,750 from the accrual of interest on $630,000 of notes payables. During the year ended December 31, 2006, we incurred interest expense of $89,778 on these same note payables. The increase of $17,972 was a result of the increase in notes payable in the year ended December 31, 2006.

During the year ended December 31, 2007, we recognized a net loss of $210,629 compared to $759,627 for the year ended December 31, 2006. The decrease of $548,998 was a result of the cessation of the operations of NeuroNutrition and the minimization of our operations over the past year.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2007, we had cash on hand of $2,226, our only current asset, and current liabilities of $1,116,487. We have a working capital deficit of $1,114,261. Net cash provided by operating activities from continuing operations for the year ended December 31, 2007 was $1,889. We had an increase in accounts payable and accrued liabilities of $142,953 and a decrease in prepaid expenses of $18,875. Net cash used by operating activities from continuing operations during the year ended December 31, 2006 was $32,829. Net losses during the year ended December 31, 2006 were adjusted for the issuance of warrants of $134,235 and stock issuances of $156,000. During the year ended December 31, 2006, we had an increase in prepaid expenses of $18,875 and accounts payable and accrued liabilities increased by $89,778.

We did not have any cash flows from investing activities from continuing operations during the years ended December 31, 2007 and 2006. Net cash provided by financing activities from continuing operations was $0 and $145,468 for the years ended December 31, 2007 and 2006. During the year ended December 31, 2006, the cash flow provided by our financing activities was from the issuance of notes payable of $145,468.

During the years ended December 31, 2006 and 2005, the Company issued convertible promissory notes totaling $630,000. The convertible promissory notes had due dates ranging from May 2006 through February 2007. The Company is currently in default on these convertible promissory notes.

The Company does not have sufficient revenue and income to support operations. The Company plans to seek a business acquisition or combination. The Company will need to fund the deficits in operating capital through debt or private placements of its common stock, which is its sole source of liquidity. There can be no assurance that we will be able to complete any of these activities.

NEED FOR ADDITIONAL FINANCING

The Company does not have capital sufficient to meet the Company's cash needs, including the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934. The Company will have to seek loans or equity placements to cover such cash needs. Lack of its existing capital may be a sufficient impediment to prevent it from accomplishing the goal of expanding its operations. There is no assurance, however, that without funds it will ultimately allow the Company to carry out its business.

The Company will need to raise additional funds to expand its business activities in the next twelve months.

No commitments to provide additional funds have been made by management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover its expenses as they may be incurred.

Irrespective of whether the Company's cash assets prove to be inadequate to meet the Company's operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash.

GOING CONCERN

The Company's auditor has issued a "going concern" qualification as part of his opinion in the Audit Report. There is substantial doubt about the ability of the Company to continue as a "going concern." The Company has limited activities, Limited capital, debt in the amount of $1,116,487, all of which is current, $2,226 in cash, and no capital commitments. The effects of such conditions could potentially cause the Company's bankruptcy.

Management hopes to seek and obtain funding, via loans or private placements of stock for operations, debt and to provide working capital.

The response to this item is submitted as a separate section of this report beginning on page F-1.

None.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 8A CONTROLS AND PROCEDURES

Disclosures Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer & Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.

As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, they have concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of the deficiency in our internal control over financial reporting discussed below.

ITEM 8A(T). CONTROLS AND PROCEDURES

Management's Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management's assessment of the effectiveness of the small business issuer's internal control over financial reporting is as of the year ended December 31, 2007. We believe that internal control over financial reporting is effective. We have not identified any, current material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations.

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 pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 8B. OTHER INFORMATION

None.

PART III

The following individuals are the Company's directors and executive officers:

Name Position Held Tenure
- ------------------------------------------------------------------------------
Rick N. Newton Chief Executive Officer and
(Mr. Newton resigned as acting Chief Financial Officer 2005 - 2006
an Officer and Director,
January 2007)
Wesley F. Whiting Acting President and Director Since January 2007

Mr. Whiting was President, director, and secretary of Berge Exploration, Inc. (1978-88), an oil and gas exploration company, and President, vice president, and director of NELX, Inc. (1994-1998), engaged in real estate development and attempts at technology development, and was vice president and director of Intermountain Methane Corporation (1988-91), and President of Westwind Production, Inc. (1997-1998), an oil and gas exploration company. He was a director of Kimbell deCar Corporation (1998 until 2000) and he has been President and a director of Sun River Energy, Inc. since 1998. He was a Director of Colorado Gold & Silver, Inc. from 1999 to 2000. He was President and director of Business Exchange Holding Corp. from 2000 to date and Acquisition Lending, Inc. (2000 to date), both of which are private holding companies for stock investments. He was director and Vice President of Utilitec, Inc, 1999 to 2003. It sought to be an environmental remediation business. He was president of Premium Enterprises, Inc. October, 2002 to December 30, 2002 and was a director of Premium Enterprises, Inc. from October 2002 to June 2003. Premium Enterprises is engaged in the "text to multimedia conversion" business. He has been President and Director of Fayber Group, Inc. since 2003, which is dormant.

The following is the biographical information of the individual who served as an officer and/or director of the Company during the year ended December 31, 2006, and resigned his position in January 2007.

Over the past 5 years Mr. Newton held the following corporate positions: From March 1999 to present President and CEO of Wisdom in Action, Inc., a privately held small business; From 1987 to present Executive director and CEO of Systems Science Institute, a privately held small business. From September 2004 to present General Partner of Conscious Capital Fund LP, privately held limited Partnership. From September 2004 to present managing member of Conscious Capital Management LLC, privately held general partner of Conscious Capital Fund. From September 2004 to present managing member of Conscious Capital Consulting LLC, privately held limited liability company; From January 2002 to December 2003 Chairman of Socially Responsible Private Equity Networks, Inc., a privately held corporation; College Bound Student Alliance, Inc., a publicly traded company, chairman of the board of directors from April 1999 to December 2002, Director from April 1999 to January 2006, and Chairman of the Audit Committee from December 2002 to January 2005. From January 2000 to April 2005 member of the Board of Directors and Chairman of the Compensation Committee of Chartwell International, Inc., a publicly traded company; From March 2005 to January 2006 Board of Directors at Kingsley Capital Inc., a privately held corporation. From January 2002 to January 2005 Board of Directors at Pasta Fresca, Inc., a privately held corporation; From August 2000 to April 2001 Executive Director of the University of Colorado Bard Entrepreneur Center. From July 1999 to April 2001 Chairman of the University of Colorado Rutt Bridges Venture Capital Fund; From December 1998 to December 2001 Board of Directors of the Rockies Venture Club. From November 2003 to October 2004 Vice President Finance and Administration at BioCare Systems, Inc. a privately held corporation. From January 2004 to October 2005 Board of Directors of Wed Steps, Inc., a privately held corporation; From June 2000 to January 2002 founder and member of the Board of Directors of Lighthouse Enterprise Holdings, Inc., a private company.

COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT

Section 16(a) of the Exchange Act requires the Company's officers and directors, and certain persons who own more than 10% of a registered class of the Company's equity securities (collectively, "Reporting Persons"), to file reports of ownership and changes in ownership ("Section 16 Reports") with the Securities and Exchange Commission (the "SEC"). Reporting Persons are required by the SEC to furnish the Company with copies of all Section 16 Reports they file.

No disclosure is contained herein about persons who failed to file Forms 3, 4, or 5, under Section 16(a)

The following table sets forth certain information concerning compensation paid by the Company to the President and the Company's two most highly compensated executive officers for the fiscal year ended December 31, 2007, 2006 and 2005 (the "Named Executive Officers"):

 SUMMARY COMPENSATION TABLE

 Non equity Non qualified
 incentive deferred
 Stock Option plan compensation All other
 Salary Bonus awards awards compensation earnings compensation Total
Name & Position Year ($) ($) ($) ($) ($) ($) ($) ($)
---------------- ------ ---------- ------- -------- -------- --------------- --------------- --------------- ---------
Wesley
Whiting, CEO,
CFO & 2007 $-0- $-0- $-0- $-0- $ -0- $-0- $-0- $-0-
Director(1) 2006 $-0- $-0- $-0- $ 2,895 $ -0- $-0- $-0- $ 2,895

Richard Newton 2006 $-0- $-0- $-0- $58,985 $ -0- $-0- $-0- $58,985
 2005 $15,000 $-0- $-0- $-0- $ -0- $-0- $-0- $15,000

Michael Shuett 2006 $-0- $-0- $-0- $ 1,930 $ -0- $-0- $-0- $ 1,930
 2005 $46,666 $-0- $-0- $-0- $ -0- $-0- $-0- $46,666


(1) Mr. Whiting was appointed the Chief Executive Officer in January 2007.
 He serves in this capacity without compensation. During the year ended
 December 31, 2006, he received a fully vested option exercisable for
 40,000 shares with a term of 5 years.
(2) Mr. Newton resigned as the chief executive officer of the Company in January 2007.
(3) Mr. Shuett resigned his position as the president and a director of the Company in 2006.

OPTION/SAR GRANTS TABLE

The following table provides information relating to the grant of stock options to the Company's executive officers during the year ended December 31, 2007.

 Individual Grants
 -----------------

 Name # of Underlying % of Total Exercise of Base Price Expiration Date
 ---- --------------- ---------- ---------------------- ---------------
Wesley F. Whiting 40,000 3% $0.50 2011

1 Based on a total of 1,338,124 options granted in the year ended December 31, 2007.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION/SAR VALUES

The following table provides information relating to the exercise of stock options during the year ended December 31, 2007 by the Company's executive officers and the 2007 fiscal year-end value of unexercised options.

 SHARES VALUE NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
 ACQUIRED ON REALIZED UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SAR
NAME EXERCISE (#) ($) AT FY-END AT FY-END ($)

 EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
 ------------------------- -------------------------

Wesley F.
Whiting 0 0 40,000/0 $2,000/0

(1) The average of the closing bid and asked price of the common stock on
December 31, 2007 ($0.05) was used to calculate the option value.

The following table sets forth the compensation, if any, paid by the Company to those directors who served on the Company's Board of Directors during the year ended December 31, 2007.

 Directors' Compensation

Name Fees Stock Options Non-Equity Nonqualified All Other Total
 Earned or Awards Awards Incentive Plan Deferred Compen- ($)
 Paid-in ($) ($) Compensation Compensation sation
 Cash ($) ($) ($) ($)

Wesley Whiting $0 $0 $0 $0 $0 $0 $0

As of the date of filing this report, the Company does not have any employees. None of the directors is accruing any compensation pursuant to any agreement with the Company. No retirement, pension, profit sharing, or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees. The Board of Directors of the Company has adopted a stock option plan. The plan allows grants up to a total of 2,000,000 stock options. At December 31, 2007, options exercisable for 1,338,124 shares were issued and outstanding and fully vested.

The Company does not have a long term compensation plans, but the Board has adopted an Employee Consultant Stock Option Plan. The Board has authorized that 2,000,000 shares be reserved for the plan. During the year ended December 31, 2007, the Board did not grant any options under the plan. During the year ended December 31, 2006, the Board granted options exercisable for 1,338,124 shares to various consultants, officers and directors. All options granted under the plan were fully vested at the time of issuance.

The following table sets forth, as of December 31, 2007, the beneficial ownership of Common Stock by each person who is known by the Company to own beneficially more than 5% of the issued and outstanding Common Stock and the shares of Common Stock owned by each nominee and all officers and Directors as a group. Each person has sole voting and investment power as to all shares unless otherwise indicated.

SHAREHOLDERS/BENEFICIAL NUMBER OF OWNERSHIP
OWNERS SHARES PERCENTAGE(1)
 -------------------------------------------------------------------------------
Steve Parkinson 2,010,000 (2) 15%
7609 Ralston Road
Arvada, CO 80002

Michael Schuett 1,866,667 (3) 14%
7609 Ralston Road
Arvada, CO 80002

John Bradley and
Bradley Family Trust 962,080 (4) 7.1%
7609 Ralston Road
Arvada, CO 80002

Rick Newton, CEO 815,000 (5)(7) 6.0%
7609 Ralston Road
Arvada, CO 80002

Wesley F. Whiting, CEO & Director 60,000 (6)(7) 0.44%
10200 W. 44th Ave., Suite 210E
Wheat Ridge, CO 80033
 --------- -----
All directors and executive
officers as a group (1 person) 60,000 (7) 0.44%
 ========= =====

(1) Based upon 10,060,534 shares of common stock issued and outstanding and assuming the exercise of warrants exercisable for 620,000 shares, the exercise of options exercisable for 1,338,124 shares and the conversion of convertible promissory notes convertible for 1,490,303 shares. Fully diluted there would be 13,508,961 shares of common stock issued and outstanding.

(2) Mr. Parkinson holds 2,000,000 shares of common stock and holds options exercisable for 10,000 shares of common stock for a total of 2,010,000 shares.

(3) Mr. Shuett holds 1,840,000 shares of common stock and holds options exercisable for 26,667 shares for a total of 1,866,667 shares.

(4) Mr. Bradley owns 462,080 shares of common stock directly. The Bradley Family Trust holds 500,000 common shares, of which Mr. Bradley is a beneficial owner.

(5) Mr. Newton holds options exercisable for 815,000 shares of common stock.

(6) Mr. Whiting holds 20,000 shares of common stock and holds options exercisable for 40,000 shares of common stock for a total of 60,000 shares.

(7) The number of shares and percent assume the exercise of all options.

No officer, director, or affiliate of the Company has or proposes to have any direct or indirect material interest in any asset proposed to be acquired by the Company through security holdings, contracts, options, or otherwise.

During the year ended December 31, 2006, the following who were officers and directors of the Company, at the time, were granted options under the Company's stock option plan in the amounts listed. The options have an exercise price of $0.50 per share, a term of 5 years and were fully vested upon issuance.

Wesley Whiting 40,000 shares
Rick Newton 815,000 shares
Michael Schuett 26,667 shares
Kelly Kendall 30,000 shares
Steve Parkinson 10,000 shares
Leland Watson 20,000 shares

Exhibits:

31 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
32 CERTIFICATION OF DISCLOSURE PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Audit Fees. During the year ended December 31, 2007, the Company was billed by Jaspers + Hall for audit and review services $_________.

During the year ended December 31, 2006, the Company was billed by Jaspers + Hall for the following services $ 9,000.

There were no audit related fees in 2006.

There were no tax fees or other fees in 2006 or 2005 paid to Auditors or Auditors' affiliates.

The Company's Board acts as the audit committee and had no "pre-approval policies and procedures" in effect for the auditors' engagement for the audit year 2007 and 2006.

All audit work was performed by the auditors' full time employees.

FINANCIAL STATEMENTS
TABLE OF CONTENTS
For the Years Ended
December 31, 2007 and 2006

 PAGE
 -------

INDEPENDENT AUDITOR'S REPORT............................. F-1

BALANCE SHEETS........................................... F-2

STATEMENT OF OPERATIONS ................................... F-3

STATEMENT OF CASH FLOWS................................... F-4

STOCKHOLDERS' EQUITY (DEFICIT)............................ F-5

NOTES TO FINANCIAL STATEMENTS.............................. F-6 - F-12

Life USA, Inc.
(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2006

To the Board of Directors
Life USA, Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheet of Life USA, Inc. a development stage company, as of December 31, 2007 and 2006, and the related consolidated statements of operations, cash flows, and changes in stockholders' deficit for the years then ended and for the period July 23, 2004 (inception) to December 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Life USA, Inc. (a development stage company) at December 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended and for the period July 23, 2004 (inception) to December 31, 2007, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the financial statements, the Company is in the development stage and conditions exist which raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

April 14, 2008

/s/Jaspers + Hall PC

 LIFE USA, INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED BALANCE SHEET

 December 31, December 31,
 2007 2006
 ----------------- -----------------
Assets
 Current Assets:
 Cash $ 2,226 $ 337
 Prepaid expenses - 18,875
 Assets of discontinued operations (Note 3) 2,158 73,467
 ----------------- -----------------
 Total Current Assets 4,384 92,679
 ----------------- -----------------
Total Assets $ 4,384 $ 92,679
 ================= =================

Liabilities and Stockholders' Deficit
 Current liabilities
 Accounts payable $ 329,219 $ 186,265
 Notes payable 25,433 25,433
 Convertible notes payable 630,000 630,000
 Liabilities of discontinued operations (Note 3) 131,835 152,455
 ----------------- -----------------
 Total Current Liabilities 1,116,487 994,153

Stockholders' Deficit
 Common stock, $0.0001 par value; 100,000,000 shares 1,006 1,006
 authorized 10,060,534 shares issued and outstanding
 at December 31, 2007 and December 31, 2006, respectively
 Additional paid-in capital 485,706 485,706
 Deficit accumulated during the development stage (1,598,815) (1,388,186)
 ----------------- -----------------
 Total Stockholders' Deficit (1,112,103) (901,474)
 ----------------- -----------------
Total liabilities and stockholders' deficit $ 4,384 $ 92,679
 ================= =================

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

 F-2

 LIFE USA, INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED STATEMENT OF OPERATIONS


 For the Year Ended July 23, 2004
 December 31, (Inception) to
 2007 2006 December 31, 2007
 ------------- ------------- -------------------
Revenue:
 Sales $ - $ - $ -
 ------------- ------------- -------------------
Operational expenses:
 Goodwill write off - - 14,454
 General and administrative 52,189 304,189 179,352
 Impairment loss - - 116,667
 Depreciation and amortization - - -
 ------------- ------------- -------------------
 Total operational expenses 52,189 304,189 310,473
 ------------- ------------- -------------------
Loss from operations (52,189) (304,189) (310,473)
 ------------- ------------- -------------------
Other income (expense):
 Interest expense (107,750) (89,778) (227,888)
 ------------- ------------- -------------------
 Total other expense (107,750) (89,778) (227,888)
 ------------- ------------- -------------------
Loss from continuing operations (159,939) (393,967) (538,361)
 ------------- ------------- -------------------
Discontinued operations, loss from
 operations of subsidiary (50,690) (365,660) (1,060,454)
 ------------- ------------- -------------------
Net Loss $ (210,629) $ (759,627) $ (1,598,815)
 ============= ============= ===================
Per share information
Net (loss) per common share
 Basic $ (0.02) $ (0.08)
 Fully diluted (0.02) (0.08)
 ------------- -------------
Weighted average number of common
 stock outstanding 10,060,534 9,774,178
 ------------- -------------
 * Less than $(0.01) per share.

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

 F-3

 LIFE USA, INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
 December 31, 2007

 Deficit accum
 Additional During
 Common Stock paid-in Development
 Number of shares Amount Capital Stage Totals
 ------------------ -------------- ------------ ---------------- -----------
Balance - July 23, 2004 (Inception) - $ - $ - $ - $ -
 ------------------- -------------- ------------- ---------------- ----------
Balance - December 31, 2004 - - - - -
 ------------------- -------------- ------------- ---------------- -----------
Recapitalization 786,534 79 (134,259) - (134,180)
Stock issued for tradename 250,000 25 124,975 - 125,000
Stock issued for services 275,000 27 248 - 275
Warrants granted for services - - 64,107 - 64,107
Stock issued for acquisition 7,775,000 778 6,997 - 7,775
Stock issued for cash 454,000 45 113,455 - 113,500
Forgiveness of debt - - 20,000 - 20,000
Net loss - - - (628,560) (628,560)
 ------------------- -------------- ------------- ---------------- -----------
Balance - December 31, 2005 9,540,534 954 195,523 (628,560) (432,083)
 ------------------- -------------- ------------- ---------------- -----------
Stock issued for services 520,000 52 155,948 - 156,000
Warrants granted for services - - 134,235 - 134,235
Net loss - - - (759,626) (759,626)
 ------------------- -------------- ------------- ---------------- -----------
Balance - December 31, 2006 10,060,534 1,006 485,706 (1,388,186) (901,474)
 ------------------- -------------- ------------- ---------------- -----------
Net Loss - - - (210,629) (210,629)
 ------------------- -------------- ------------- ---------------- ----------
Balance as of December 31, 2007 10,060,534 $ 1,006 $485,706 $ (1,598,815) $ (1,112,103)
 =================== ============== ============= ================ ===========

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

 F-4

 LIFE USA, INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED STATEMENT OF CASH FLOWS

 July 23, 2004
 For the Year Ended (Inception) to
 December 31, December 31,
 2007 2006 2007
 -------------- -------------- --------------
Cash Flows from Operating Activities:
 Net Loss $ (210,629) $ (759,627) $ (1,598,815)

Adjustments to reconcile net loss to net cash used
in operating activities from continuing operations:
 Loss from discontinued operations 50,690 365,660 1,060,454
 Stock Warrants expensed for services - 134,235 198,342
 Stock issuance for services - 156,000 156,275
 Amortization and depreciation - - -
 Goodwill write-off - - 14,454
 Impairment loss add back - - 116,667
 Decrease (Increase) Accounts Receivable - - -
 Decrease (Increase) in Prepaid Expenses 18,875 (18,875) 18,875
 Increase in Accounts Payable 142,953 89,778 142,953
 Increase in Accrued Expenses - - -
 -------------- -------------- --------------
Net Cash Provided (Used) by Operating Activities
 from continuing operations 1,889 (32,829) 109,205
 -------------- -------------- --------------
Net Cash Used in Investing Activities from
 continuing operations - - -
 -------------- -------------- --------------
Cash Flows from Financing Activities:
 Proceeds from notes payables - 145,468 647,764
 Proceeds from stock issuance - - 7,775
 -------------- -------------- --------------
Net Cash Provided (used) by Financing Activities
 from continuing operations - 145,468 655,539
 -------------- -------------- --------------
Net Cash used in discontinued operations (11,662) (153,390) (762,518)

Net Increase (Decrease) in Cash 1,889 112,639 764,744

Cash and Cash Equivalents - Beginning of Period 11,999 52,750 -
 -------------- -------------- --------------
Cash and Cash Equivalents - End of Period $ 2,226 $ 11,999 $ 2,226
 ============== ============== ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid for interest expense $ - 2,086 2,205
 ============== ============== ==============
 Cash paid for income taxes $ - - -
 ============== ============== ==============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
 AND FINANCING ACTIVITIES:
 Stock warrants granted for services $ - 134,235 2,195,438
 ============== ============== ==============
 Stock issued for services $ - 156,000 156,275
 ============== ============== ==============
 Acquisition of tradename for 250,000 shares common $ - - 125,000
 ============== ============== ==============
 Note payable assumed in reverse takeover $ - - 15,080
 ============== ============== ==============

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

 F-5

LIFE USA, INC. AND SUBSIDIARY
(A Development Stage Company)

Notes to the Consolidated Financial Statements For the Year Ended December 31, 2007

NOTE 1. Business, Basis of Presentation and Significant Accounting Policies:

Business:

Life USA, Inc. (the "Company") was incorporated in Colorado in January, 1997. The Company was originally named Lifeline USA, Inc. On January 16, 2007, the Company changed its name to Life USA, Inc. by filing an amendment to its Article of Incorporation. To resolve an administrative dissolution by the Secretary of State, the Company was reincorporated in 2002. The Company shareholders approved the reincorporation of Life USA, Inc. in 2001, and then the directors acting as trustees entered into a merger of the old Life USA, Inc. with the reincorporated Life USA, Inc. The Company was organized to engage in any activity or business not in conflict with the laws of the State of Colorado or of the United States of America.

On September 13, 2005, Life USA, Inc. and Neuro Nutrition, Inc. ("Neuro") signed an agreement whereby, Life USA purchased all of the issued and outstanding shares of Neuro Nutrition, Inc. for 8,300,000 shares of its common stock. Neuro then became a 100% wholly owned subsidiary of Life USA, Inc.

The Company accounted for the acquisition as a reverse acquisition under the purchase method of accounting, since the Neuro shareholders obtained control of the consolidated entity. The historical statements presented are those of Neuro.

Neuro Nutrition was incorporated on July 23, 2004 in the State of Colorado, and has been in the development stage since. In January 2007, the Company ceased the operations of Neuro (See Note 3).

Basis of Presentation:

The Company has not earned any significant revenues from its limited operations. Accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth is Statement of Financial Accounting Standard No. 7 ("SFAS No. 7"). Among the disclosures required by SFAS No. 7 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operation, stockholders' equity (deficit) and cash flows disclose activity since the date of the Company's inception.

Reclassifications:

Certain amounts reported in the year ended December 31, 2006 financial statements have been reclassified to conform to the year ended December 31, 2007 presentation.

Significant Accounting Policies:

Cash and Cash Equivalents

The Company maintains the majority of its cash accounts at a commercial bank. The total cash balance is insured by the Federal Deposit Insurance Corporation ("FDIC") up to $100,000 per commercial bank. As of December 31, 2007, the Company had zero amounts in excess of the FDIC insured limits. For purposes of the statement of cash flows, the Company considers all cash and highly liquid investments with initial maturities of three months or less to be cash equivalents.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affects 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 revenue and expenses during the reporting period. Such estimates may be materially different from actual financial results. Significant estimates include the recoverability of long-lived assets and the collectability of accounts receivable.

Revenue Recognition

Revenue Recognition is recognized when earned. The Company's revenue recognition policies are in compliance with Staff Accounting Bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

LIFE USA, INC. AND SUBSIDIARY
(A Development Stage Company)

Notes to the Consolidated Financial Statements For the Year Ended December 31, 2007

Net Loss per Share

Net loss per share is calculated in accordance with the SFAS No. 128, "Earnings per Share". SFAS No. 128 superseded Accounting Principles Board Opinion No.15 (APB No. 15). Net loss per share for all periods presented has been restated to reflect the adoption of SFAS No. 128. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as, if funds obtained thereby were used to purchase common stock at the average market price during the period.

Fair Value of Financial Instruments

The carrying amount of accounts payable and accrued expenses are considered to be representative of their respective fair values because of the short-term nature of these financial instruments.

Other Comprehensive Income

The Company has no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss in all periods.

Federal Income Taxes

The Company accounts for income taxes under SFAS No. 109, which requires the asset and liability approach to accounting for income taxes. Under this method, deferred tax assets and liabilities are measured based on differences between financial reporting and tax bases of assets and liabilities measured using enacted tax rates and laws that is expected to be in effect when differences are expected to reverse.

Recent Accounting Pronouncements:

In June 2006, the FASB issued Interpretation ("FIN") No. 48, "Accounting for Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109." This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. This Interpretation is effective for fiscal years beginning after December 15, 2006. We believe that FIN No. 48 should not have a material impact on our financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles ("GAAP"), and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurement where the FASB has previously determined that under those pronouncements fair value is the appropriate measurement. This statement does not require any new fair value measurements but may require companies to change current practice. This statement is effective for those fiscal years beginning after November 15, 2007 and to the interim periods within those fiscal years. We believe that SFAS No. 157 should not have a material impact on our financial position or results of operations

In September 2006, FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans" ("SFAS No. 158"). SFAS No. 158 requires employers to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position, recognize changes in that funded status in the year in which the changes occur through comprehensive income and measure a plan's assets and its obligations that determine its funded status as of the end of the employer's fiscal year. The provisions of SFAS No. 158 are effective for fiscal years ending after December 15, 2006. We believe that SFAS No. 158 should not have a material impact on our financial position or results of operations.

LIFE USA, INC. AND SUBSIDIARY
(A Development Stage Company)

Notes to the Consolidated Financial Statements For the Year Ended December 31, 2007

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" ("SAB 108"). SAB 108 requires companies to evaluate the materiality of identified unadjusted errors on each financial statements and related financial statement disclosure using both the rollover approach and the iron curtain approach. The requirements of SAB 108 are effective for annual financial statements covering the first fiscal year ending after November 15, 2006. SFAS No. 158 has not had a material impact on our financial position or results of operations.

In July 2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 prescribes the minimum accounting and disclosure requirements of uncertain tax positions. FIN 48 also provides guidance on the de-recognition, measurement, classification, interest and penalties, and transition of uncertain tax positions. FIN 48 is effective for fiscal periods beginning after December 15, 2006. We believe that FIN 48 should not have a material impact on our financial position or results of operations

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159). SFAS No. 159 permits entities to choose to measure, on an item-by-item basis, specified financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected are required to be reported in earnings at each reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007, the provisions of which are required to be applied prospectively. We believe that SFAS 159 should not have a material impact on our financial position or results of operations

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations, or SFAS No. 141R. SFAS No. 141R will change the accounting for business combinations. Under SFAS No. 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS No. 141R will change the accounting treatment and disclosure for certain specific items in a business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Accordingly, any business combinations we engage in will be recorded and disclosed following existing GAAP until January 1, 2009. We expect SFAS No. 141R will have an impact on accounting for business combinations once adopted but the effect is dependent upon acquisitions at that time. We are still assessing the impact of this pronouncement.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--An Amendment of ARB No. 51, or SFAS No. 160". SFAS No. 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. We believe that SFAS 160 should not have a material impact on our financial position or results of operations.

LIFE USA, INC. AND SUBSIDIARY
(A Development Stage Company)

Notes to the Consolidated Financial Statements For the Year Ended December 31, 2007

NOTE 2. Going Concern:

In the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about the Company's ability to continue as a going concern. The Company's interim financial statements for the year ended December 31, 2007 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of $210,629 for the year ended December 31, 2007, and an accumulated deficit of $1,598,815 as of December 31, 2007. At December 31, 2007, the Company had a working capital deficit of $1,112,103 and total current liabilities exceed total current assets by $1,112,103.

The future success of the Company is likely dependent on its ability to attain additional capital, or to find an acquisition to add value to its present shareholders and ultimately, upon its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. Management believes that actions presently being taken to revise the Company's operating and financial requirements provide the opportunity for the Company to continue as a going concern.

NOTE 3. Discontinued Operations:

In January 2007, management of the Company ceased the operations of its wholly-owned subsidiary, Neuro. As part of the cessation of Neuro, the Company liquidated the inventory held by Neuro.

At December 31, 2007, Neuro's remaining asset is cash of $2,158, and its liabilities consist of accounts payable of $125,636 and a note payable of $6,199. (excluding intercompany payables of approximately $750,106).

Neuro's revenues for the year ended December 31, 2007 and 2006 reported in discontinued operations were $4,135 and $751,624, respectively. Neuro recorded a net loss for the year ended December 31, 2007 and 2006 of $50,690 and $365,660, respectively.

NOTE 4. Notes Payable:

The Company's outstanding notes payable on December 31, 2007 consisted of:

 $ 15,080 Note Payable issued to an investor. Due upon demand.
 Interest rate is 8%

 10,353 Note payable, issued to vendor. Due upon demand
 --------
$ 25,443 Total notes payable outstanding on December 31, 2007.
 ========

LIFE USA, INC. AND SUBSIDIARY
(A Development Stage Company)

Notes to the Consolidated Financial Statements For the Year Ended December 31, 2007

NOTE 5. Convertible Notes Payable:

Convertible notes payable as of December 31, 2007, consisted of the following:

$ 50,000 Note payable 1, convertible into 151,515 shares, due
 September 30, 2006, incurring interest at 25%, attached
 to the note are 151,515 warrants exercisable at $0.625
 per share. The note is secured by a subordinated pledge
 of inventory and accounts receivable.

$ 25,000 Note payable 2, convertible into 50,000 shares, due
 September 7, 2006, incurring interest at 10%. Note
 holder has verbally agreed to extend the note.


$ 50,000 Note payable 3, convertible into 151,515 shares, due
 September 30, 2006, incurring interest at 25%. The note
 is secured by a subordinated pledge of Inventory and
 accounts receivable.

$ 75,000 Note payable 4, convertible into 227,273 shares, due
 September 30, 2006, incurring interest at 25%, attached
 to the note are 227,273 warrants exercisable at $0.625
 per share. The note is secured by a subordinated pledge
 of inventory and accounts receivable.

$ 20,000 Note payable 5, convertible into 40,000 shares, due
 February 28, 2007, incurring interest at 15%, attached to
 the note are 40,000 warrants exercisable at $0.65 per
 share.

$ 50,000 Note payable 6, convertible into 100,000 shares, due
 February 28, 2007, incurring interest at 15%, attached
 to the note are 100,000 warrants exercisable at $0.65
 per share.

$ 75,000 Note payable 7, convertible into 150,000 shares, due May
 27, 2006, incurring interest at 10%, attached to the note
 are 150,000 warrants exercisable at $0.625 per share.

$ 50,000 Note payable 8, convertible into 100,000 shares, due
 November 11, 2006, incurring interest at 10%, attached
 to the note are 200,000 warrants exercisable at
 $0.625 per share.


$ 50,000 Note payable 9, convertible into 100,000 shares, due
 November 11, 2006, incurring interest at 10%, attached
 to the note are 200,000 warrants exercisable at
 $0.625 per share.

$ 5,000 Note payable 10, convertible into 10,000 shares, due
 November 11, 2006, incurring interest at 10%, attached
 to the note are 20,000 warrants exercisable at $0.625
 per share.

$ 50,000 Note payable 11, convertible into 100,000 shares, due
 December 7, 2006, incurring interest at 10%, attached
 to the note are 200,000 warrants exercisable at $0.625
 per share.

$ 25,000 Note payable 12, convertible into 50,000 shares, due
 February 20, 2007, incurring interest at 10%, attached
 to the note are 100,000 warrants exercisable at $0.75
 per share.

$ 5,000 Note payable 13, convertible into 10,000 shares, due
 February 28, 2007, incurring interest at 10%, attached
 to the note are 20,000 warrants exercisable at $0.75
 per share.

$ 50,000 Note payable 14, convertible into 125,000 shares, due
 September 12, 2006, incurring interest at 25%, attached
 to the note are 250,000 warrants exercisable at $0.75
 per share. This note is secured by inventory and
 accounts receivable.

$ 50,000 Note payable 15, convertible into 125,000 shares, due
 September 12, 2006, incurring interest at 25%, attached
 to the note are 250,000 warrants exercisable at $0.75
 per share. This note is secured by inventory and
 accounts receivable.
--------
$630,000 Total Convertible notes payable. All these notes, with
======== the exception of notes 1, 3, 4, 14 and 15 are unsecured.

As of December 31, 2007, all of the convertible notes described above are in default.

NOTE 6. Stockholders' Deficit:

Common Stock:

During the year ended December 31, 2007, the Company did not issue any shares of its common stock.

In July 2006, the Company issued 520,000 shares of its restricted stock to certain consultants, advisors and Board of Director members for their services. On the date of the issuance and on the last day of the quarter, the Company's stock traded at $0.30 per share. The 520,000 shares were fully expensed at a total cost of $156,000.

LIFE USA, INC. AND SUBSIDIARY
(A Development Stage Company)

Notes to the Consolidated Financial Statements For the Year Ended December 31, 2007

Warrants:

During the year ended December 31, 2006, the Company issued convertible notes payable in the amount of $630,000 to which warrants exercisable for 1,908,790 shares of the Company's common stock were attached. The attached warrants, if any, give the note holder the right to purchase additional shares of common stock at a specified strike price. Depending on the terms of the convertible notes, the note holder is granted for each converted share one or two warrants to purchase one or two additional shares of common stock at purchase prices ranging from $0.625 to $0.75 per share for a period of up to three years from the date of the issuance of the respective convertible note payable.

During the year ended December 31, 2007, warrants exercisable for 1,288,788 shares of common stock expired.

As of December 31, 2007, no warrants had been exercised.

A summary of warrant activity for 2007 is as follows:

 Weighted Weighted
 Number Average Average
 Of Exercise Warrants Exercise
 Warrants Price Exercisable Price
------------------------ -------------- ----------- -------------- -----------
Outstanding
December 31, 2006 1,908,788 $ 2.02 1,908,788 $ 2.02
 Granted 0 0 0 0
 Expired (1,288,788) 0.625 (1,288,788) 0.625
 Exercised 0 0 0 0
------------------------ -------------- ----------- -------------- -----------
Outstanding
December 31, 2007 620,000 $ 0.75 620,000 $ 0.75
------------------------ -------------- ----------- -------------- -----------

At December 31, 2007 the range of warrant prices for shares under warrants and the weighted-average remaining contractual life is as follows:

 Warrants Outstanding Warrants Exercisable
 ------------------------------------------- ------------------------
 Weighted
 Weighted Average Weighted
Range of Number Average Remaining Number Average
Warrant of Exercise Contractual of Exercise
Exercise Price Warrants Price Life Warrants Price
-------------- ----------- ------------- -------------- ----------- -----------
 $0.75 620,000 $ 0.75 0.12 620,000 $ 0.75
============== =========== ============= ============== =========== ============

Options:

During the year ended December 31, 2006, the Company's Board of Directors adopted a stock option plan. The Company is able to grant option exercisable for up to 2,000,000 shares under the plan. During the year ended December 31, 2006, the Company granted options under the stock option plan exercisable for 1,338,124 shares of the Company's common stock. The options have an exercise price of $0.50 per share and were fully vested upon issuance. The options have a term of five years.

LIFE USA, INC. AND SUBSIDIARY
(A Development Stage Company)

Notes to the Consolidated Financial Statements For the Year Ended December 31, 2007

The options were granted to various contractors and to current and former directors and officers of the Company.

The granted stock options have been valued, using a Black-Scholes model, and were fully expensed. During the year ended December 31, 2006, the Company incurred an expense of $96,847 in connection with the granting of the options.

During the year ended December 31, 2007, no options were issued, exercised or cancelled.

A summary of the Option Plans at December 31, 2007 is as follows:

 WEIGHTED AVERAGE
 SHARES EXERCISE PRICE
 ------ --------------

Outstanding, Beginning of Year 1,338,124 $ 0.50
Granted - -
Cancelled - -
Expired - -
Exercised - -
 --------- ----------
Outstanding, End of Year 1,338,124 $ 0.50
 ========= ==========

Options Exercisable, End of Year 1,338,124 $ 0.50
 ========= ==========

The following table summarizes information about stock options outstanding as of December 31, 2007:

 OPTIONS OUTSTANDING OPTIONS EXERCISABLE

 WEIGHTED-AVERAGE
RANGE OF REMAINING WEIGHTED
EXERCISE NUMBER OF CONTRACTUAL WEIGHTED-AVERAGE NUMBER OF AVERAGE
PRICES OPTIONS LIFE (YEARS) EXERCISE PRICE OPTIONS EXERCISE PRICE
------- ------- ------------ -------------- ------- --------------

$0.50 1,338,124 4 $1.00 1,338,124 $0.50
 --------- - ----- --------- -----
 1,338,124 4 $1.00 1,338,124 $0.50
 ========= = ===== ========= =====

NOTE 7. FEDERAL INCOME TAXES:

The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards Number 109 ("SFAS 109"), "Accounting for Income Taxes", which requires a change from the deferred method to the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.

The Company has deferred income tax assets, which have been fully reserved as follows:

Deferred tax assets
 Net operating loss carry forwards $1,695,662
 Valuation allowance for deferred tax assets (1,695,662)
 ----------
Net deferred tax assets $ -
 ==========

At December 31, 2007, the Company had net operating loss carry forwards of $1,695,662 for federal income tax purposes. These carry forwards, if not utilized to offset taxable income will expire at the end of the December 31, 2027.

SIGNATURES

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

LIFE USA, INC.

 Date: July __, 2008

 /s/David Kutchinski
 -------------------
 David Kutchinski,
President, CEO and Acting CFO

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

Date: August 22, 2008

/s/Wesley F. Whiting
- ------------------
Wesley F. Whiting, Director

Date: August 22, 2008

/s/David Kutchinski
--------------------
David Kutchinski, Director

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