<PAGE>
                SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                           FORM 10-KSB
                                 
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
    OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 1998
Commission file number 33-17387  

                            ALLIANCE HEALTH, INC.                             
          (Exact name of registrant as specified in its charter)

       Delaware                                              75-219377       
(State or other jurisdiction of                       (I.R.S. Employer I.D.#)
incorporation or organization)

421 E. Airport Freeway, Irving, Texas                           75062        
(Address of principal executive office)                       (Zip Code)

Issuer's telephone number, including area code (972)-255-5533 

Securities registered under Section 12(b) of the Exchange Act:
                                                                               
                              Name of each exchange on
                    Title of each class               which registered
-----------------------------------------------------------------------------
Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, par value $0.01
_____________________________________________________________________________
                                (Title of class)
_____________________________________________________________________________
                                (Title of class)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for 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

     State issuer's revenues for its most recent fiscal year $2,617,198.

     State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.  No market for common stock.

     Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.  Yes X      No

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.  3,590,000


<PAGE>
                             PART I.

Item 1.      Description of Business

     Alliance Health, Inc. ("Company") was incorporated on September 4, 1987. 
It had no business activity until July 1989 at which time it began to operate
one clinic in Dallas, Texas, which it closed the same year.

     On May 12, 1995, the Company acquired from K Clinics, P.A. ("K Clinics"),
the marketing division of K Clinics.  The marketing division will continue the
contract to perform advertising and marketing services for S. J. Kechejian,
M.D.,P.A. and Metroplex Specialties, P.A. medical facilities in the Dallas/
Ft. Worth Metroplex.

     Metroplex Specialties, P.A. is one of the "partnerships" of the Company. 
On October 23, 1995 the Company began leasing an MRI it purchased and installed
at 200 W. Colorado Blvd., Dallas, Texas to Metroplex Specialties, P.A. for $300
per scan.  In the year 1998 revenue was $887,100 as compared to 1997 revenue of
$779,700.  The Hitachi MRI purchased by the Company located at 1218 S. Main
Street, Ft. Worth, Texas, is being leased at the same rate of $300 per scan
and generated income in 1998 of $153,600.    

     Alliance Health has the experience through its association with K Clinics
in the Dallas/Fort Worth area to offer the services of a Management Service
Organization (MSO).  K Clinic has developed innovative marketing, advertising
and administrative services over the past ten years in conjunction with S. J.
Kechejian, M.D., P.A.  In May 1995 the advertising division of K Clinics was
sold to Alliance Health, Inc.  The further development of the MSO and 
offering of additional administrative and specialty services to physicians
and medical groups has been developed and management services are currently
being contracted by two medical facilities in East Texas. 

Item 2.    Description of Property

     None.

Item 3.    Legal Proceedings

     The Company is not a party to any pending legal proceedings.

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

     No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.




                               -2-

<PAGE>

                             PART II

Item 5.    Market for the Registrant's Common  Stock
                and Related Shareholder Matters

     On September 30, 1998 the approximate number of holders of record of the
Company common stock was 306.  The Company's common stock has no established
trading market.

     The Company has never paid any dividends on the common stock and does not
expect to do so in the foreseeable future.

Item 6.    Management's Discussion and Analysis or Plan of Operation

     Prior to May 1995, the Company had no operating business since June 1990. 
On May 12, 1995, an 8-K was filed regarding the acquisition of the Marketing
Division of K Clinics which included $285,879 in cash in exchange for one
million two hundred thousand (1,200,000) shares of common stock of Alliance
Health, Inc. (the "Company").  K Clinics is wholly owned by Sarkis J.
Kechejian, M.D. who is also the principal shareholder of the Company.

     The Company's primary source of income during the year was advertising
income.  An increase of twenty eight percent (28%) was realized in 1998 as
compared to 1997.  This was due to fees from Aldine Medical Associates, an
affiliate, and an increase in the number of clinic locations at S. J. 
Kechejian, M.D., P.A.  Other marketing income was generated from Metro
Pharmacy, Inc. and Metroplex Specialties, Inc.  

     The Company also realized a considerable increase in fees from Metroplex
Specialties, Inc. from the MRI lease.  An increase of 37% was realized in 1998
as compared to 1997.  The revenue from Metroplex Specialties, Inc. is on a per
scan basis and is expected to continue at roughly $85,000 per month during the
next fiscal year.

     Expenses in 1998 increased twenty two percent (22%) over 1997, principally
due to an increase in salaries and employee benefits and general and
administrative expenses.  General and administrative expenses  increased
seventeen percent (17%) during the 1998 year, principally due to increases in
maintenance costs ($80,000) and repair expenses ($20,000).  In February, 1997,
the Company hired a Chief Operating Officer to facilitate the integration of
operating systems. 

     All furniture, fixtures, and equipment (FF&E) will be leased to Aldine
Medical Associates ("Aldine") an affiliate, at cost plus ten percent (10%).
The majority of the FF&E to be leased to Aldine for the Tyler clinic is from
the Aldine Medical Clinic of Houston (now closed) and any additional FF&E
required will be purchased by the Company and leased at the same rate.



                                    -3-

<PAGE>

Liquidity and Financial Resources

     The Company had $739,596 in cash at September 30, 1998.

     The Company has an agreement with Metroplex Specialties, P.A. for the lease
of two MRIs at $300/per scan.  It is expected this lease will continue to
produce revenues of approximately $85,000 per month.  The second MRI has 
increased income from the MRI leases by $153,600.

     The Board approved the purchase of a facility in Longview, Texas to be
leased to Aldine Medical Associates.  The facility will house a medical clinic,
a physical therapy center and an imaging center.  The imaging center will
initially consist of a Computerized Axial Tomograph (cat scanner) that Alliance
Health purchased and installed at the facility.  The leasing arrangement will
be with Aldine at a rate of $125 per scan.

     The Company has loaned Aldine $108,348 in start-up and administrative
costs.  The loan was to be paid back during the year ended September 30, 1998
with an interest rate of 10%.  As of September 30, the outstanding balance
due on the loan was $53,487.  The loan has been extended at the same 
interest rate for an additional year. 

     The Company receives $102,500 per month from S. J. Kechejian, M.D., P.A., 
$27,500 from Metroplex Specialties, $7,500 from Metro Pharmacy and $10,000 from
Aldine Medical Associates for marketing services.  This is an ongoing arrange-
ment acquired with the marketing division from K Clinics.  It is anticipated the
revenue for marketing services will increase in the next year as S. J.
Kechejian, M.D., P.A. and Aldine Medical Associates are expected to add
additional clinic locations thus increasing the need for additional marketing
services.

     The Company has no long term debt outstanding at year end.  Income from the
marketing division, lease of the MRIs and CT and Management Service Fees  are
expected to be sufficient cash flow to cover all operating and administrative
expenses.

     Year 2000.  The Company currently believes that it does not have any
significant exposure to uncertainties nor material anticipated costs with
regard to Year 2000 issues.  Current systems and any anticipated upgrades are
2000 compliant.

Item 7.    Financial Statements  

     Financial statements in response to Item 7 are presented on pages F-1
through F-10.



                               -4-
<PAGE>

                     ALLIANCE HEALTH, INC.
                                
             INDEX TO AUDITED FINANCIAL STATEMENTS


                                                                   Page

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . .F-2

Balance Sheets at September 30, 1998 and 1997. . . . . . . . . . . .F-3

Statements of Income for the Years Ended
  September 30, 1998 and 1997. . . . . . . . . . . . . . . . . . . .F-4

Statements of Changes in Stockholders' Equity
  for the Years Ended September 30, 1998 and 1997. . . . . . . . . .F-5

Statements of Cash Flows for the Years Ended
  September 30, 1998 and 1997. . . . . . . . . . . . . . . . . . . .F-6

Notes to Financial Statements. . . . . . . . . . . . . . . . . . . .F-7







                               F-1

<PAGE>

                                
                  INDEPENDENT AUDITORS' REPORT




Board of Directors
Alliance Health, Inc.

We have audited the accompanying balance sheets of Alliance Health, Inc. as of
September 30, 1998 and 1997, and the related statements of income, changes in
stockholders' equity and cash flows for the years then ended. 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 audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  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 signifi-
cant estimates made by management, as well as evaluating the overall finan-
cial 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 Alliance Health, Inc. as of
September 30, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles. 




                                            Jackson & Rhodes P.C.



Dallas, Texas
November 17, 1998


                               F-2

<PAGE>

                      ALLIANCE HEALTH, INC.
                          BALANCE SHEETS
                   September 30, 1998 and 1997
                                                                       
                               ASSETS
<TABLE>
<CAPTION> 
                                                1998          1997
       <S>                                    <C>           <C>    
    Current assets
       Cash                                   $739,596      $940,716  
       Accounts receivable 
         affiliates (Note 6)                    64,413       178,348 
       Other assets                             12,134        15,528 
                                               _______     _________
          Total current assets                 816,143     1,134,592 
                                                                     
      Property and equipment (Note 3)        2,451,752     1,234,422 
       Less accumulated depreciation          (591,577)     (341,683)
                                             _________     _________
                                             1,860,175       892,739
                                            __________    __________ 
                                            $2,676,318    $2,027,331 
                                                                     
                  LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                     
    Current liabilities:
       Accounts payable                                              
         Trade                                 $52,825       $68,166 
         Officer                                     -         1,592 
       Accrued liabilities                      21,116          -    
       Income taxes payable                    249,889       287,231 
                                               _______       _______
         Total current liabilities             323,830       356,989 
                                                                     
    Deferred income taxes                       34,532          -    
    
    Commitments and contingencies (Note 5)           -          -    
                                                      
    Stockholders' equity:                                         
       Preferred stock, $.01 par,
          100,000 shares authorized,
          none issued                               -           -   
       Common stock, $.01 par,
          20,000,000 shares authorized,
          issued and outstanding
          3,590,000 shares                      35,900        35,900 
       Paid-in capital                         831,166       831,166 
       Retained earnings                     1,450,890       803,276 
                                             _________     _________
         Total stockholders' equity          2,317,956     1,670,342
                                             _________     _________ 
                                            $2,676,318    $2,027,331 
   </TABLE>
                                                                            
          See accompanying notes to financial statements.
                                    
    
    
    
    
                                  F-3
    
    <PAGE>
    
                       ALLIANCE HEALTH, INC.
                       STATEMENTS OF INCOME
             Years Ended September 30, 1998 and 1997

    <TABLE>
    <CAPTION>                                                                   
                                                1998          1997
      <S>                                  <C>               <C>
    Revenues:                                 
       Advertising income from
           affiliates (Note 6)            $ 1,520,000       $1,190,000
       MRI income from affiliates 
            (Note 6)                        1,070,445          779,700
       Interest                                26,753           24,045 
                                            _________        _________
                                            2,617,198        1,993,745 
    
    Expenses:
       Advertising                            649,672          579,917 
       Salaries and employee benefits         396,172          304,142 
       Depreciation                           249,893          169,202 
       General and administrative             338,939          289,715 
                                            _________        _________
                                            1,634,676        1,342,976
                                            _________        _________   
    
    Operating income                          982,522          650,769 
    
    Other income                               26,948           34,652 
                                                                   
    Income before taxes                     1,009,470          685,421 
                                                                   
    Income taxes (Note 4)                     361,856          291,239 
                                             ________         ________       
       Net income                            $647,614         $394,182 
                                                                        
      Basic earnings per common share           $0.18            $0.11
                                                                                           
    Weighted average number of                                     
       common shares outstanding            3,590,000        3,590,000 
                                                                        
</TABLE>
                                                                        
                                                                   
             See accompanying notes to financial statements.
                                 
                                 F-4

<PAGE>
                    ALLIANCE HEALTH, INC.
          STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
             Years Ended September 30, 1998 and 1997


   <TABLE>
   <CAPTION>
                                    
                                          Additional                            
                        Common Stock        Paid-in     Retained               
                     Shares    Par Value    Capital     Earnings      Total
   <S>              <C>         <C>        <C>          <C>        <C>
  
   Balance, 9-30-96 3,590,000   $35,900    $831,166     $409,094   $1,276,160
    
   Net income              -          -           -      394,182      394,182
                    _________    ______     _______      _______    _________  
   Balance, 9-30-97 3,590,000    35,900     831,166      803,276    1,670,342
    
   Net income              -          -           -      647,614      647,614
                    _________   _______    ________   __________   __________ 
   Balance, 9-30-98 3,590,000   $35,900    $831,166   $1,450,890   $2,317,956
    
   </TABLE>
    
    
    
    
    
    
      
    
    
    
          See accompanying notes to financial statements.
                                 
                                 F-5
 

   <PAGE>

                       ALLIANCE HEALTH, INC.
                     STATEMENTS OF CASH FLOWS
             Years Ended September 30, 1998 and 1997
                                                                             
   <TABLE>
   <CAPTION>                                                                  
                                                   1998        1997
                                                              
       <S>                                     <C>            <C>
    Cash flows from operating activities:
       Net income                              $647,614       $394,182 
       Adjustments to reconcile net income                           
      to net cash provided by operating
        activities:                                                  
           Depreciation                         249,894        169,202 
           Deferred income taxes                 40,518        (69,224)
           Changes in assets and liabilities:                        
            Accounts receivable - affiliates     59,390         (6,966)
            Other assets                         (2,592)        (7,545)
            Income taxes payable                (37,341)       292,156 
            Accounts payable                    (16,934)        36,341 
            Accrued liabilities                  21,116         (1,356)
                                               ________        _______
                Net cash provided by 
                operating activities            961,665        806,790 
                                                                     
    Cash flows from investing activities:                            
     Accounts receivable - affiliates            54,545       (108,032)
     Purchase of equipment                   (1,217,330)      (123,000)
                                              _________        _______
            Net cash used by 
             investing activities            (1,162,785)      (231,032)
                                                                     
            Net increase (decrease)
              in cash                          (201,120)       575,758 
                                                                     
       Cash at beginning of year                940,716        364,958 
                                              _________       ________         
       Cash at end of year                     $739,596       $940,716          
          
                                                                     
    Income taxes paid                          $358,678       $ 68,307
                                                                     
   </TABLE>
                                                                     
                                                                     
                                                             
                                                                     
                                                                     
                                                                     
          See accompanying notes to financial statements.
                                 
                                 
                               F-6
                                    
      
   <PAGE>      
                           ALLIANCE HEALTH, INC.
                       Notes to Financial Statements    
                  Years Ended September 30, 1998 and 1997
   
    1. Organization
    
       Alliance Health, Inc. (the "Company") was incorporated in Delaware on
       September 4, 1987.  In 1995, the Company acquired the advertising 
       division (the "Division") of K Clinics, P.A. ("K Clinics"), from Dr.
       S. J. Kechejian, M.D.  The Company currently offers advertising and 
       management services to medical clinics of affiliated companies.
      
    2. Summary of Significant Accounting Policies
    
       Use of Estimates and Assumptions
    
       Preparation of the Company's financial statements in conformity with
       generally accepted accounting principles requires management to make
       estimates and assumptions that affect certain reported amounts and
       disclosures.  Accordingly, actual results could differ from those
       estimates.
      
       Statement of Cash Flows
    
       For statement of cash flow purposes, the Company considers short-term
       investments with original maturities of three months or less to be cash
       equivalents.
    
       Property and Equipment
  
       Property and equipment are stated at cost.  Cost of property renewals and
       betterments are capitalized; cost of property maintenance and repairs are
       charged against operations as incurred.
    
       Depreciation is computed using the straight-line method over the
       estimated useful lives of the individual assets as follows:
       
                 Equipment                             7 years
                 Furniture and fixtures                4 years
                 Leasehold improvements                5 years
       
       Income Taxes
       
       The Company accounts for income taxes in accordance with Statement of
       Financial Accounting Standards No. 109, "Accounting for Income Taxes"
       ("SFAS 109").  SFAS 109 utilizes the asset and liability method of
       computing deferred income taxes.  The objective of the asset and
       liability method is to establish deferred tax assets and liabilities
       for the temporary differences between the financial reporting basis
       and the tax basis of the Company's assets and liabilities at enacted
       tax rates expected to be in effect when such amounts are realized or
       settled. 
    
    
    
    
    
    
    
    
                                  F-7
    
    <PAGE>
                           ALLIANCE HEALTH, INC.
                       Notes to Financial Statements
                  Years Ended September 30, 1998 and 1997

    2.   Summary of Significant Accounting Policies (Continued)
         
         Earnings Per Common Share
    
         In March 1997, the Financial Accounting Standards Board issued State-
         ment of Financial Accounting Standards No. 128, Earnings Per Share
         ("SFAS 128"). SFAS 128 provides a different method of calculating
         earnings per share than was formerly used in APB Opinion 15.  SFAS
         128 provides for the calculation of basic and diluted earnings per
         share.  Basic earnings per share includes no dilution and is comput-
         ed by dividing income available to common stockholders by the
         weighted average number of common shares outstanding for the period.
         Dilutive earnings per share reflects the potential dilution of 
         securities that could share in the earnings of the Company.  The
         Company was required to adopt this standard in the fourth
         quarter of calendar 1997.  Because the Company has no potential 
         dilutive securities outstanding, the accompanying presentation is 
         only of basic earnings per share.
  
    3.   Property and Equipment
  
         Property and equipment consisted of the following at September 30:
  
                                                                         
                                                  1998             1997        
           Buildings                           300,836                -      
           Equipment (principally magnetic 
                resonance imaging)           1,795,006          1,063,074
           Leasehold improvements              316,910            132,348
           Furniture and fixtures               39,000             39,000    
                                            __________          _________   
                                           $ 2,451,752        $ 1,234,422

    4.   Income Taxes

         Following is a reconciliation between reported income taxes and the
         amount computed by applying the statutory federal income tax rates to
         pre-tax accounting income for the periods ended September 30:
     
                                                                         
                                                       1998            1997     
  
        Expected provision for federal income taxes  $343,210       $233,000
        State income taxes                             51,500         42,000
        Other                                         (32,854)        16,239 
                                                     ________        _______
                                                     $361,856       $291,239


 
                                F-8

   <PAGE>
                               ALLIANCE HEALTH, INC.
                           Notes to Financial Statements


    4. Income Taxes (Continued)
  
       Income taxes were as follows for the years ended September 30:
                         
                                                                                
                                                 1998          1997
         Current                               $321,338      $360,463 
         Deferred                              $ 40,518       (69,224)
                                               ________      ________
                                               $361,856      $291,239 
    
       Income tax expense for each year consisted of current taxes.  The
       components of the deferred tax (asset) liability are as follows at
       September 30:
                                                                         
 
                                                 1998           1997
         Depreciation                         $(64,458)       $(61,374)
         Alternative minimum tax                25,522          25,522 
         Cash Basis                              4,404          41,839 
                                              ________        ________   
                                              $ 34,532         $(5,987)
    
    5. Commitments and Contingencies
    
       Concentration of Credit Risk
    
       The Company invests its cash and certificates of deposit primarily in
       deposits with major banks.  Certain deposits, at times, are in excess of
       federally insured limits.  The Company has not incurred losses related to
       its cash.
       
    6. Related Party Transactions
  
       All of the Company's advertising income and MRI income was for services
       rendered to various affiliated companies owned by the Company's major
       stockholder. The MRI's are leased on a month-to-month (per-scan) basis.
       The Company loaned an affiliate $108,348 to fund start-up costs during
       fiscal year 1997.  The affiliate is to pay the borrowings back with 
       10% interest.
    
       The Company leases its office space and equipment on a month-to-month
       basis from S. J. Kechejian, M.D., P.A., an affiliated company.  The
       amount paid in 1998 and 1997 was $42,515 and $33,188, respectively.
    
    
    
    
    
                                  F-9
    
    
    <PAGE>
                                 ALLIANCE HEALTH, INC.
                            Notes to Financial Statements


    7.   Accounting Developments
    
         SFAS 129
          
         Statement of Financial Accounting Standards No. 129, Disclosure of
         Information about Capital Structure ("SFAS 129"), effective for periods
         ending after December 15, 1997, establishes standards for disclosing
         information about an entity's capital structure.  SFAS 129 requires
         disclosure of the pertinent rights and privileges of various securities
         outstanding (stock, options, warrants, preferred stock, debt and
         participating rights) including dividend and liquidation preferences,
         participant rights, call prices and dates, conversion or exercise
         prices and redemption requirements.  Adoption of SFAS 129 has had
         no effect on the Company as it currently discloses the information
         specified.
    
         SFAS 130                
    
         Statement of Financial Accounting Standards (SFAS) 130, "Reporting
         Comprehensive Income", establishes standards for reporting and display
         of comprehensive income, its components and accumulated  balances. 
         Comprehensive income is defined to include all changes in equity except
         those resulting from investments by owners and distributions to 
         owners.  Among other disclosures, SFAS 130 requires that all items
         that are required to be recognized under current accounting  
         standards as components of comprehensive income be reported in a 
         financial statement that is displayed with the same prominence as
         other financial statements.  Results of operations and financial 
         position are unaffected by implementation of this new standard.
  
         SFAS 131
        
         SFAS  131,  "Disclosure  about Segments of a Business  Enterprise",
         establishes  standards for the way that public enterprises report
         information about operating  segments in annual financial statements
         and requires reporting of selected information about operating seg-
         ments in interim financial statements issued to the public.  It also
         establishes standards for disclosures regarding products and
         services, geographic areas and major  customers.  SFAS 131 defines
         operating segments as components of an enterprise about which
         separate financial information is available that is evaluated 
         regularly by the chief operating decision maker in deciding how to
         allocate resources and in assessing performance. This accounting
         pronouncement will not have an effect on the Company's financial
         statements, since the Company only operates in one segment of
         business, the offering of advertising and management services to
         medical clinics.
       
    
    
                                  F-10
    
    <PAGE>

    
    Item 8.   Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure
    
              None.
    
                                PART III
    
    Item 9.       Directors, Executive Officers, Promoters and Control Persons,
                  Compliance with Section 16(A) of the Exchange Act
    
         The executive officers and directors of Alliance Health, Inc. are
    identified in the following table.  Each has held the indicated positions
    with Alliance Health, Inc. since May 19, 1995, and will serve in these
    offices until their successors are elected and qualified.
    
         NAME                    AGE                POSITION
    
    Sarkis J. Kechejian           60        President, Treasurer
                                            and Chairman of the Board
    
    Sharilyn J. Bruntz Wilson     48        Vice President and Secretary
    
    Richard C. Schneck            48        Chief Operating Officer
    
    Kenneth Guest                 59        Director
    
    James Kenney                  57        Director
    
    George Nicolaou, M.D.         77        Director
    
    Mac Martirossian              44        Director
    
        Dr. Kechejian is also president and sole owner of S. J. Kechejian, M.D.,
    P.A. dba Doctor's Clinic/K Clinic which consists of twenty one clinics and
    five PT/OT centers and Aldine Medical  Associates dba K Clinic, which
    consists of two clinics, one PT/OT Center and one cat scan imaging center
    treating patients injured on the job or in auto accidents.
    
        Ms. Wilson is Secretary and Chief Financial Officer of S. J. Kechejian,
    M.D., P.A. and was Secretary/Treasurer of K Med Centers, Inc. from January,
    1987 until December, 1991.  Prior to that time, for over five years, she was
    a Legal Assistant with several law firms.
    
        Mr. Guest is an attorney who has been practicing in the Dallas area
    since 1965.  He is with the law firm of Ken Guest and Associates.  He has
    investments in several manufacturing and retail businesses.
    
    
    
    
    
    
    
    
                                  -5-
    
   <PAGE> 

       James W. Kenney has been a Director since September, 1992.  He is
    currently associated with San Jacinto Securities, Inc. as Executive Vice
    President.  From February, 1992 to June, 1993 he served as Vice President of
    Investments for Renaissance Capital Group, Inc.  From October, 1989 to
    February, 1992 he served as Senior Vice President, Director of Trading and
    Sales for Capital Institutional Services.  From February, 1987 to October,
    1989, he served as Senior Vice President for retail sales for Rauscher 
    Pierce Refsnes, Inc.  Mr. Kenney received a BA degree in economics from the
    University of Colorado in Boulder, Colorado.  Mr. Kenney also currently
    serves on the Board of Directors of the following companies:  Consolidated
    Health Care Associates, Inc., Industrial Holdings, Inc., Scientific
    Measurement Systems, and Tricom Corporation.
    
        Dr. Nicolaou is a retired physician.  He has extensive business
    experience doing consulting work.
    
        Mac Martirossian has been a Director since May, 1996.  He is currently
    Senior Vice President of Business Development for Howard Schultz &
    Associates.  From April 1989 to August 1995, he served in various Executive
    Management positions at AMRE, Inc., with his last position as Vice 
    President-Operations.
    
        Richard Schneck is Chief Operating Officer of Alliance Health, Inc.  He
    joined Alliance in February, 1997.  Prior to that time he was an Executive
    Manager in HMO operations, as well as Hospital Financial and Administrative
    operations.  Mr. Schneck has over 20 years of health care management
    experience.
    
    Item 10.  Executive Compensation
    
    Cash Compensation
    
        For the fiscal year ended September 30, 1998, Dr. Kechejian received no
    cash remuneration.  Ms. Wilson received a salary of $61,868 and Mr. Schneck
    received a salary of $157,500 for the year ended September 30, 1998.
    
    Compensation of Directors
    
         Directors received $500 for each of the three Board of Director's
    meetings attended.
    
    Item 11.  Security Ownership of Certain Beneficial Owners and Managers
    
         The following information is submitted as of September 30, 1998 with
    respect to the Company's voting securities owned beneficially by each person
    known to the Company who owns more than 5% of the Common Stock of the
    Company, this being the only class of voting securities now outstanding and
    by all directors and officers of the Company individually and as a group.
    
        
    
                                  -6-
    
    <PAGE>
    Name and Address of              Amount Bene-         Approximate
    Beneficial Owner                ficially owned     Percent of Class
    
    Sarkis J. Kechejian, M.D.           2,809,518             78%
    421 E. Airport Freeway
    Irving, Texas  75062
    
    Nishan J. Kechejian, M.D.             450,000            12.5%
    824 Oak St.
    Brockton, MA 02401
    
    Item 12.  Certain Relationships and Related Transactions
    
        As set forth in the Company's financial statements contained in this
    report, all of the Company's advertising income and MRI income was for
    services rendered to affiliated companies.  The Company's primary customers
    are S. J. Kechejian, M.D., P.A., Aldine Medical Associates and Metroplex
    Specialties, P.A., all professional corporations wholly owned by S. J.
    Kechejian, M.D.  These companies provide diagnostic and therapeutic medical
    services to patients suffering from soft tissue injuries generally incurred
    in automobile or job related accidents.  Dr. Kechejian owns, directly or
    indirectly, 2,809,518 shares of Common Stock of the Company (78% of the
    outstanding shares).
    
        Furthermore, the Company's office facilities are located in the same
    office building owned by a company owned by Dr. Kechejian.  The Company
    leases its office space and equipment on a month to month basis from S. J.
    Kechejian, M.D., P.A. for which it paid $30,000 for fiscal year ended
    September 30, 1998.
    
    
                                PART IV
    
    
    Item 13.  Exhibits and Reports on Form 8-K
    
        a.  Exhibit 27, Financial Data Schedule
    
        b.  Management Service Agreement
    
    
    
    
                                  -7-
    
    <PAGE>

                               SIGNATURES
    
    
        In accordance with Section 13 or 15(d) of the Exchange Act, the
    registrant caused this report to be signed on its behalf by the undersigned
    thereunto duly authorized.
    
    
                         ALLIANCE HEALTH, INC.
    
    
    
    DATED:    December 18, 1998    By:  Sarkis J. Kechejian, M.D.
                                        Chairman of the Board,
                                        President and Treasurer
    
    
        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.
    
    DATED:     December 18, 1998   Sarkis J. Kechejian, M.D.
                                   Chairman of the Board and
                                   President and Treasurer
    
    DATED:     December 18, 1998   James Kenney
                                   Director
    
    DATED:     December 18, 1998   George Nicolaou, M.D.
                                   Director
    
    DATED:     December 18, 1998   Kenneth Guest
                                   Director
    
    DATED:     December 18, 1998   Mac Martirossian
                                   Director
    
    
    
    
                                  -8-