UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, DC  20549
 
 Form 10-Q
  
 
 (Mark one)
 x
Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934For the quarterly period ended March 31, 2011o
Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period from ______________ to _____________
 
 
 
 Commission File Number: 33-17387
 
 Alliance Health, Inc.
 (Exact name of registrant as specified in its charter)
 
 Delaware
75-2192377(State of incorporation)
(IRS Employer ID Number)
 
 421 E. Airport Freeway, Irving, TX 75062
 (Address of principal executive offices)
 
 (972) 255-5533
 (Issuer's telephone number)
 
 
 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  x  NO  o
  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES  o  NO  o
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large accelerated filer o
Accelerated filer oNon-accelerated filer o
Smaller reporting company x
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): YES  x  NO  o
 
 State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: April 22, 2011: 1,534,066
 
 Transitional Small Business Disclosure Format (check one): YES  o  NO  x
  
  Alliance Health, Inc.
 
 Form 10-Q for the Quarter ended December 31, 2010
 
 Table of Contents
  PagePart I - Financial InformationItem 1 - Financial Statements
3Item 2 - Management's Discussion and Analysis or Plan of Operation
11Item 3 - Quantitative and Qualitative Disclosures About Market Risk
13Item 4 - Controls and Procedures
13Part II - Other InformationItem 1 - Legal Proceedings
14Item 2 - Recent Sales of Unregistered Securities and Use of Proceeds
14Item 3 - Defaults Upon Senior Securities
14Item 4 - (Removed and Reserved)
14Item 5 - Other Information
14Item 6 - Exhibits
14Signatures
14


2


Part I





Item 1 - Financial Statements








ALLIANCE HEALTH, INC.


Balance Sheets


March 31, 2011 and September 30, 2010








(Unaudited)


(Audited)March 31,


September 30,2011


2010ASSETSCurrent AssetsCash on hand and in bank

$
134


$
4,647Total Current Assets

$
134


$
4,647LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent LiabilitiesAccounts payable - trade

$
—


$
—Accrued liabilities


2,000



3,046Note payable to stockholder


176,900



176,900Accrued interest payable to stockholder


62,943



55,886Total Liabilities


241,843



235,832Commitments and ContingenciesStockholders’ DeficitPreferred stock - $0.01 par value1,000,000 shares authorized.None issued and outstanding


—



—Common stock - $0.01 par value.20,000,000 shares authorized.1,534,066 shares issued and outstanding


15,341



15,341Additional paid-in capital


—



—Accumulated deficit


(257,050
)


(246,526
)Total Stockholders’ Deficit


(241,709
)


(231,185
)TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$
134


$
4,647














The financial information presented herein has been prepared by management without audit


by independent certified public accountants.


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


3


ALLIANCE HEALTH, INC.


Statements of Operations and Comprehensive Loss


Six and Three months ended March 31, 2011 and 2010





(Unaudited)








Six months


Six months


Three months


Three monthsended


ended


ended


endedMarch 31,


March 31,


March 31,


March 31,2011


2010


2011


2010Revenues

$
—


$
—


$
—


$
—Operating ExpensesProfessional fees


3,220



3,350



1,559



1,550General and administrative expense


247



375



—



375Total Operating Expenses


3,467



3,725



1,559



1,925Loss from Operations


(3,467
)


(3,725
)


(1,559
)


(1,925
)Other Income (Expense)Interest income


—



—



—



—Interest expense


(7,057
)


(6,714
)


(3,490
)


(3,350
)Loss before Income Taxes


(10,524
)


(10,439
)


(5,049
)


(5,275
)Provision for Income Taxes


—



—



—



—Net Loss


(10,524
)


(10,439
)


(5,049
)


(5,275
)Other Comprehensive Income


—



—



—



—Comprehensive Loss

$
(10,524
)

$
(10,439
)

$
(5,049
)

$
(5,275
)Loss per weighted-average share of common stock outstanding,computed on net loss – basic and fully diluted

$
(0.01
)

$
(0.01
)

$
(0.00
)

$
(0.00
)Weighted-average number of common shares outstanding


1,534,066



1,534,066



1,534,066



1,534,066














The financial information presented herein has been prepared by management without audit


by independent certified public accountants.


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


4


ALLIANCE HEALTH, INC.


Statements of Cash Flows


Six months ended March 31, 2011 and 2010





(Unaudited)








Six months


Six monthsended


endedMarch 31,


March 31,2011


2010Cash flows from operating activitiesNet loss for the year

$
(10,524
)

$
(10,439
)Adjustments to reconcile net loss to netcash provided by (used in) operating activitiesDepreciation and amortization


—



—Increase (Decrease) inAccounts payable and other accrued liabilities


(1,046
)


(875
)Interest payable to stockholder


7,057



6,714Net cash provided by (used in) operating activities


(4,513
)


(1,200
)Cash flows from investing activities


—



—Cash flows from financing activitiesCash received on note payable to stockholder


—



—Net cash provided by financing activities


—



—Increase (Decrease) in Cash


(4,513
)


(1,200
)Cash at beginning of year


4,647



1,981Cash at end of year

$
134


$
781Supplemental disclosure of interest and income taxes paidInterest paid for the year

$
—


$
—Income taxes paid (refunded) for the year

$
—


$
—














The financial information presented herein has been prepared by management without audit


by independent certified public accountants.


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


5


ALLIANCE HEALTH, INC.


Notes to Financial Statements


March 31, 2011 and September 30, 2010








Note A - Description of Business





Alliance Health, Inc. (Company), was incorporated on September 4, 1987 in accordance with the Laws of the State of Delaware.





In 1995, the Company acquired the advertising division of K Clinics, P. A., an entity owned by the Company’s majority shareholder, for the purpose of offering advertising and management services to various medical clinics affiliated by common ownership.





During the year ended September 30, 2003, the Company sold all operating activities and assets to various entities owned and/or controlled by the Company’s majority shareholder.  Since that transaction, the Company has had no operations or significant assets.





The Company’s current business plan is to locate and combine with an existing, privately-held company which is profitable or, in management's view, has growth potential, irrespective of the industry in which it is engaged.  However, the Company does not intend to combine with a private company which may be deemed to be an investment company subject to the Investment Company Act of 1940.  A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other form which will result in the combined enterprise's becoming a publicly-held corporation.








Note B - Preparation of Financial Statements





The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles and has adopted a year-end of September 30.





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





Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.  The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented





During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-K containing the Company’s financial statements for the year ended September 30, 2010.  The information presented within these interim financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein.





In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and Exchange Commission’s instructions for Form 10-Q, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented.  The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending September 30, 2011.


6


ALLIANCE HEALTH, INC.


Notes to Financial Statements - Continued


March 31, 2011 and September 30, 2010








Note C - Going Concern Uncertainty





The Company has nominal cash on hand, no operating assets and a business plan with inherent risk.  Because of these factors, the Company’s auditors have issued an audit opinion on the Company’s financial statements which includes a statement describing our going concern status.  This means, in the auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.





The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.  Further, the Company faces considerable risk in it’s business plan and a potential shortfall of funding due to our inability to raise capital in the equity securities market.  If no additional operating capital is received during the next twelve months, the Company will be forced to rely on existing cash in the bank and additional funds loaned by management and/or significant stockholders.





The Company’s business plan is to seek an acquisition or merger with a private operating company which offers an opportunity for growth and possible appreciation of our stockholders’ investment in the then issued and outstanding common stock.  However, there is no assurance that the Company will be able to successfully consummate an acquisition or merger with a private operating company or, if successful, that any acquisition or merger will result in the appreciation of our stockholders’ investment in the then outstanding common stock.





The Company remains dependent upon additional external sources of financing; including being dependent upon its management and/or significant stockholders to provide sufficient working capital in excess of the Company’s initial capitalization to preserve the integrity of the corporate entity.





The Company anticipates offering future sales of equity securities.  However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.








Note D - Summary of Significant Accounting Policies





1.
Cash and cash equivalents





The Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.





2.
Income taxes





The Company files income tax returns in the United States of America and various states, as appropriate and applicable.  With few exceptions, the Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for years before Fiscal 2008.  The Company has been effectively dormant since that time and does not anticipate any examinations of returns filed since 2008.





The Company uses the asset and liability method of accounting for income taxes.  At March 31, 2011 and September 30, 2010, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences.  Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.





The Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification.  The Codification Topic requires the recognition of potential liabilities as a result of management’s acceptance of potentially uncertain positions for income tax treatment on a “more-likely-than-not” probability of an assessment upon examination by a respective taxing authority.  As a result of the implementation of Codification’s Income Tax Topic, the Company did not incur any liability for unrecognized tax benefits.


7


ALLIANCE HEALTH, INC.


Notes to Financial Statements - Continued


March 31, 2011 and September 30, 2010








Note D - Summary of Significant Accounting Policies - Continued





3.
Income (Loss) per share





Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.





Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).





Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.





At March 31, 2011 and 2010, respectively, the Company has no outstanding stock warrants, options or convertible securities which could be considered as dilutive for purposes of the loss per share calculation.





4.
Pending and/or New Accounting Pronouncements





The Company is of the opinion that any pending accounting pronouncements, either in the adoption phase or not yet required to be adopted, will not have a significant impact on the Company's financial position or results of operations.








Note E - Fair Value of Financial Instruments





The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.





Interest rate risk is the risk that the Company’s earnings are subject to fluctuations in interest rates on either investments or on debt and is fully dependent upon the volatility of these rates.  The Company does not use derivative instruments to moderate its exposure to interest rate risk, if any.





Financial risk is the risk that the Company’s earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates.  The Company does not use derivative instruments to moderate its exposure to financial risk, if any.








NOTE F - Concentrations of Credit Risk





Financial instruments, which potentially subject us to a concentration of risk, include, principally, cash and accounts receivable.  All of our customers were based in the United States at this time and we are not subject to exchange risk at this time.





The Company maintains its cash in domestic financial institutions subject to insurance coverage issued by the Federal Deposit Insurance Corporation (FDIC).  Under FDIC rules, the Company is entitled to aggregate coverage as defined by Federal regulation per account type per separate legal entity per financial institution.  During each of the six month periods ended March 31, 2011 and 2010 and for the year ended September 30, 2010, respectively, the Company, from time-to-time, may have had deposits in a financial institution with credit risk exposures in excess of statutory FDIC coverage.  The Company has incurred no losses as a result of any unsecured situations.


8


ALLIANCE HEALTH, INC.


Notes to Financial Statements - Continued


March 31, 2011 and September 30, 2010








Note G - Note Payable to Stockholder





As of March 31, 2011 and September 30, 2010, the Company’s controlling stockholder has loaned the Company an aggregate $176,900 and $176,900, respectively.  These loans bear interest at 8.0% and are currently due upon demand.








Note H - Income Taxes





The  components of income tax (benefit) expense for each of the six month periods ended March 31, 2011 and 2010, respectively, are as follows:





Six months


Six monthsended


endedMarch 31,


March 31,2011


2010Federal:Current

$
—


$
—Deferred


—



——



—State:Current


—



—Deferred


—



——



—Total

$
—


$
—





As of March 31, 2011, the Company had a cumulative net operating loss carryforward of approximately $91,000 to offset future taxable income.  The amount and availability of any net operating loss carryforwards will be subject to the limitations set forth in the Internal Revenue Code.  Such factors as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of any net operating loss carryforward(s).





The Company's income tax expense (benefit) for each of the six month periods ended March 31, 2011 and 2010, respectively, are as follows:





Six months


Six monthsended


endedMarch 31,


March 31,2011


2010Statutory rate applied to income before income taxes

$
(3,600
)

$
(3,500
)Increase (decrease) in income taxes resulting from:State income taxes


—



—Other, including reserve for deferred tax asset and application of net operating loss carryforward


3,600



3,500Income tax expense

$
—


$
—














(Remainder of this page left blank intentionally)


9


ALLIANCE HEALTH, INC.


Notes to Financial Statements - Continued


March 31, 2011 and September 30, 2010








Note H - Income Taxes - Continued





The Company’s only temporary difference due to statutory requirements in the recognition of assets and liabilities for tax and financial reporting purposes, as of March 31, 2011 and September 30, 2010, relates solely to the Company’s net operating loss.  This difference gives rise to the financial statement carrying amounts and tax bases of assets and liabilities causing either deferred tax assets or liabilities, as necessary, as of March 31, 2011 and September 30, 2010, respectively:





March 31,


September 30,2011


2010Deferred tax assetsNet operating loss carryforwards

$
30,800


$
27,200Less valuation allowance


(30,800
)


(27,200
)Net Deferred Tax Asset

$
—


$
—





During the six months ended March 31, 2011 and during the year ended September 30, 2010, respectively, the valuation allowance for the deferred tax asset increased by approximately $3,600 and $7,200.








NOTE I - Subsequent Events





Management has evaluated all activity of the Company through April 22, 2011 (the issue date of the financial statements) and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to financial statements.














(Remainder of this page left blank intentionally)


10


Part I - Item 2





Management’s Discussion and Analysis of Financial Condition and Results of Operations





(1) Caution Regarding Forward-Looking Information





Certain statements contained in this quarterly filing, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.





Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business  disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.





Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.





(2) Results of Operations





The Company had no revenue for either of the three month periods ended March 31, 2011 or 2010, respectively.





General and administrative expenses for the three month periods ended March 31, 2011 and 2010 were solely and directly related to the maintenance of the corporate entity since the adoption of the Company’s current business plan.  The Company’s current business plan is to locate and combine with an existing, privately-held company which is profitable or, in management's view, has growth potential, irrespective of the industry in which it is engaged.  However, the Company does not intend to combine with a private company which may be deemed to be an investment company subject to the Investment Company Act of 1940.  A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other form which will result in the combined enterprise's becoming a publicly-held corporation.





It is anticipated that future expenditure levels may increase as the Company intends to fully comply with it’s periodic reporting requirements under the Securities Exchange Act of 1934, as amended.





Earnings per share for the respective six month periods ended March 31, 2011 and 2010 were $(0.01) and $(0.01), respectively, based on the weighted-average shares issued and outstanding at the end of each respective period.





The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under the Securities Exchange Act of 1934 unless and until such time that the Company’s operating subsidiary begins meaningful operations.








(3) Plan of Business


General





The Company intends to locate and combine with an existing, privately-held company which is profitable or, in management's view, has growth potential, irrespective of the industry in which it is engaged.  However, the Company does not intend to combine with a private company which may be deemed to be an investment company subject to the Investment Company Act of 1940.  A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other form which will result in the combined enterprise's becoming a publicly-held corporation.





Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue.  Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred.


11


If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated.  In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution.





Combination Suitability Standards





In its pursuit for a combination partner, the Company's management intends to consider only combination candidates which are profitable or, in management's view, have growth potential.  The Company's management does not intend to pursue any combination proposal beyond the preliminary negotiation stage with any combination candidate which does not furnish the Company with audited financial statements for at least its most recent fiscal year and unaudited financial statements for interim periods subsequent to the date of such audited financial statements, or is in a position to provide such financial statements in a timely manner.  The Company will, if necessary funds are available, engage attorneys and/or accountants in its efforts to investigate a combination candidate and to consummate a business combination.  The Company may require payment of fees by such combination candidate to fund the investigation of such candidate.  In the event such a combination candidate is engaged in a high technology business, the Company may also obtain reports from independent organizations of recognized standing covering the technology being developed and/or used by the candidate.  The Company's limited financial resources may make the acquisition of such reports difficult or even impossible to obtain and, thus, there can be no assurance that the Company will have sufficient funds to obtain such reports when considering combination proposals or candidates.  To the extent the Company is unable to obtain the advice or reports from experts, the risks of any combined enterprise's being unsuccessful will be enhanced.  Furthermore, to the knowledge of the Company's officers and directors, neither the candidate nor any of its directors, executive officers, principal stockholders or general partners:




(1)
will have been convicted of securities fraud, mail fraud, tax fraud, embezzlement, bribery, or a similar criminal offense involving misappropriation or theft of funds, or be the subject of a pending investigation or indictment involving any of those offenses;





(2)
will have been subject to a temporary or permanent injunction or restraining order arising from unlawful transactions in securities, whether as issuer, underwriter, broker, dealer, or investment  advisor,  may be the  subject of any  pending investigation or a defendant in a pending lawsuit arising from or based upon allegations of unlawful transactions in securities; or





(3)
will have been a defendant in a civil action which resulted in a final judgement against it or him awarding damages or rescission based upon unlawful practices or sales of securities.





The Company's officers and directors will make these determinations by asking pertinent questions of the management of prospective combination candidates.  Such persons will also ask pertinent questions of others who may be involved in the combination proceedings.  However, the officers and directors of the Company will not generally take other steps to verify independently information obtained in this manner which is favorable.  Unless something comes to their attention which puts them on notice of a possible disqualification which is being concealed from them, such persons will rely on information received from the management of the prospective combination candidate and from others who may be involved in the combination proceedings.








(4) Liquidity and Capital Resources


At March 31, 2011 and September 30, 2010, respectively, the Company had a working capital deficit of approximately $(242,000) and $(231,000).  The deficiency relates principally to a note payable and the related accrued interest thereon payable to the Company’s controlling shareholder.  The proceeds of this note were used to satisfy a 2006 assessment by the Internal Revenue Service and to support the Company’s working capital needs.





It is the belief of management and significant stockholders that they will provide sufficient working capital necessary to support and preserve the integrity of the corporate entity.   However, there is no legal obligation for either management or significant stockholders to provide additional future funding.  Further, the Company is at the mercy of future economic trends and business operations for the Company’s majority stockholder to have the resources available to support the Company.  Should this pledge fail to provide financing, the Company has not identified any alternative sources.  Consequently, there is substantial doubt about the Company's ability to continue as a going concern.





The Company has no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate.  There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future.   It is anticipated that the Company's need for working capital may change dramatically as a result of any business acquisition or combination transaction.  Accordingly, there can be no assurance that sufficient funds will be available to the Company to allow it to cover the expenses related to such activities and there is no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires.


12


Regardless 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.








(5) Critical Accounting Policies


Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”).  GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported.  These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition.  We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied.  We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.  Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.





Our significant accounting policies are summarized in Note D of our financial statements.  While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates.  Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.





(6) Effect of Climate Change Legislation





The Company currently has no known or identified exposure to any current or proposed climate change legislation which could negatively impact the Company’s operations or require capital expenditures to become compliant.  Additionally, any currently proposed or to-be-proposed-in-the-future legislation concerning climate change activities, business operations related thereto or a publicly perceived risk associated with climate change could, potentially, negatively impact the Company’s efforts to identify an appropriate target company which may wish to enter into a business combination transaction with the Company.








Item 3 - Quantitative and Qualitative Disclosures About Market Risk





In future periods, the Company may become subject to certain market risks, including changes in interest rates and currency exchange rates.  At the present time, the Company has no identified exposure and does not undertake any specific actions to limit exposures, if any.








Item 4 - Controls and Procedures





Disclosure Controls and Procedures.  Our management, under the supervision and with the participation of our Chief Executive and Financial Officer (“Certifying Officer”), Sarkis J. Kechejian, M. D., has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report. Based on such evaluation, our Certifying Officer has concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures are effective.  Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Certifying Officer, as appropriate to allow timely decisions regarding required disclosure.





Changes in Internal Control over Financial Reporting.There have not been any changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) that occurred during the quarter ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


13


Part II - Other Information








Item 1 - Legal Proceedings





None








Item 2 - Recent Sales of Unregistered Securities and Use of Proceeds





None








Item 3 - Defaults on Senior Securities





None








Item 4 - (Removed and Reserved)








Item 5 - Other Information





None








Item 6 - Exhibits




31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002
  32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002

















SIGNATURES





In accordance with the requirements 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: April 22, 2011
/s/ Sarkis J. Kechejian, M. D.Sarkis J. Kechejian, M. D.President, Chief Executive Officer,Chief Financial Officer and Director
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