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
      1934





For the quarterly period ended December
31, 2008





o
            Transition
      Report under Section 13 or 15(d) of the Securities Exchange Act of
      1934





For 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 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:January 23, 2009: 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, 2008





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
                13Item 2 - Recent Sales of Unregistered Securities and Use of
      Proceeds
                13Item 3 - Defaults Upon Senior Securities
                14Item 4 - Submission of Matters to a Vote of Security
      Holders
                14Item 5 - Other Information
                14Item 6 - Exhibits
                14Signatures
                14





2


Part
I





Item1 - Financial Statements





Alliance
Health, Inc.


Balance
Sheets


December
31, 2008 and September 30, 2008








(Unaudited)
                            
                            
                            (Audited)December
      31,
                            
                            
                            September
      30,2008
                            
                            
                            2008ASSETSCurrent
      AssetsCash
      on hand and in bank
                            
                            $
                            6,001
                            
                            
                            $
                            9,951Total
      Current Assets
                            
                            
                            6,001
                            
                            
                            
                            9,951Total
      Assets
                            
                            $
                            6,001
                            
                            
                            $
                            9,951LIABILITIES AND STOCKHOLDERS’ EQUITY
      (DEFICIT)LiabilitiesCurrent
      LiabilitiesAccounts
      payable - trade and accrued liabilities
                            
                            $
                            2,229
                            
                            
                            $
                            3,569Note
      payable to controlling shareholder
                            
                            
                            166,500
                            
                            
                            
                            166,500Accrued
      interest payable to controlling stockholder
                            
                            
                            32,187
                            
                            
                            
                            28,830Total
      Current Liabilities
                            
                            
                            200,916
                            
                            
                            
                            198,899Long-Term
      LiabilitiesNote
      payable to controlling stockholder
                            
                            
                            3⁄4
                            
                            
                            
                            3⁄4Total
      Liabilities
                            
                            
                            200,916
                            
                            
                            
                            198,899Commitments
      and ContingenciesStockholders’
      Equity (Deficit)Preferred
      stock - $0.01 par value1000,000
      shares authorized.None
      issued and outstanding
                            
                            
                            3⁄4
                            
                            
                            
                            3⁄4Common
      stock - $0.01 par value.20,000,000
      shares authorized.1,534,066
      shares issued and outstanding
                            
                            
                            15,341
                            
                            
                            
                            15,341Additional
      paid-in capital
                            
                            
                            3⁄4
                            
                            
                            
                            3⁄4Accumulated
      deficit
                            
                            
                            (210,256
                            )
                            
                            
                            (204,289
                            )Total
      Stockholders’ Equity (Deficit)
                            
                            
                            (194,915
                            )
                            
                            
                            (188,948
                            )Total
      Liabilities and Stockholders’ Equity
                            
                            $
                            6,001
                            
                            
                            $
                            9,951









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


Three
months ended December 31, 2008 and 2007





(Unaudited)





Three
      months
                      
                      
                      Three
      monthsended
                      
                      
                      endedDecember
      31,
                      
                      
                      December
      31,2008
                      
                      
                      2007Revenues
                      
                      $
                      3⁄4
                      
                      
                      $
                      3⁄4Operating
      ExpensesGeneral
      and administrative expense
                      
                      
                      2,610
                      
                      
                      
                      2,661Total
      Operating Expenses
                      
                      
                      2,610
                      
                      
                      
                      2,661Loss
      from Operations
                      
                      
                      (2,610
                      )
                      
                      
                      (2,661
                      )Other
      Income (Expense)Interest
      income
                      
                      
                      3⁄4
                      
                      
                      
                      3⁄4Interest
      expense
                      
                      
                      (3,357
                      )
                      
                      
                      (3,357
                      )Loss
      before Income Taxes
                      
                      
                      (5,967
                      )
                      
                      
                      (6,018
                      )Provision
      for Income Taxes
                      
                      
                      3⁄4
                      
                      
                      
                      3⁄4Net
      Income (Loss)
                      
                      
                      (5,967
                      )
                      
                      
                      (6,018
                      )Other
      Comprehensive Income
                      
                      
                      3⁄4
                      
                      
                      
                      3⁄4Comprehensive
      Income (Loss)
                      
                      $
                      (5,967
                      )
                      
                      $
                      (6,018
                      )Loss
      per weighted-average share of common stock outstanding,computed
      on net loss - basic and fully diluted
                      
                      $
                      0.00
                      
                      
                      $
                      0.00Weighted-average
      number of common shares outstanding
                      
                      
                      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


Three
months ended December 31, 2008 and 2007





(Unaudited)





Three
      months
                            
                            
                            Three
      monthsended
                            
                            
                            endedDecember
      31,
                            
                            
                            December
      31,2008
                            
                            
                            2007Cash
      flows from operating activitiesNet
      income (loss) for the period
                            
                            $
                            (5,967
                            )
                            
                            $
                            (6,018
                            )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activitiesDepreciation
      and amortization
                            
                            
                            —
                            
                            
                            
                            —(Increase)
      Decrease inLawsuit
      settlement receivable
                            
                            
                            —
                            
                            
                            
                            —Increase
      (Decrease) inAccounts
      payable and other accrued liabilities
                            
                            
                            (1,340
                            )
                            
                            
                            (5,164
                            )Accrued
      interest payable to stockholder
                            
                            
                            3,357
                            
                            
                            
                            3,357Income
      taxes payable
                            
                            
                            —
                            
                            
                            
                            —Net
      cash provided by (used in) operating activities
                            
                            
                            (3,950
                            )
                            
                            
                            (7,825
                            )Cash
      flows from investing activities
                            
                            
                            —
                            
                            
                            
                            —Cash
      flows from financing activities
                            
                            
                            —
                            
                            
                            
                            —Increase
      (Decrease) in Cash
                            
                            
                            (3,950
                            )
                            
                            
                            (7,825
                            )Cash
      at beginning of period
                            
                            
                            9,951
                            
                            
                            
                            22,536Cash
      at end of period
                            
                            $
                            6,001
                            
                            
                            $
                            14,711Supplemental
      disclosure of interest and
      income taxes paidInterest
      paid for the period
                            
                            $
                            —
                            
                            
                            $
                            —Income
      taxes paid (refunded) for the period
                            
                            $
                            —
                            
                            
                            $
                            —









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


December
31, 2008 and 2007








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-KSB containing the Company’s
financial statements for the year ended September 30, 2008.  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, 2009.





6


Alliance
Health, Inc.


Notes
to Financial Statements - Continued


December
31, 2008 and 2007








Note
C - Going Concern Uncertainty





The
Company’s current principal business activity is to seek a suitable reverse
acquisition candidate through acquisition, merger or other suitable business
combination method.  The Company has nominal cash on hand, has no
operating assets and has 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.





The
Company anticipates future sales of equity securities to facilitate either the
consummation of a business combination transaction or to raise working capital
to support and preserve the integrity of the corporate
entity.  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.





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 upon additional
funds loaned by management and/or significant stockholders to preserve the
integrity of the corporate entity at this time.  In the event, the
Company is unable to acquire advances from management and/or significant
stockholders, the Company’s ongoing operations would be negatively
impacted.





It is the
intent of management and significant stockholders to provide sufficient working
capital necessary to support and preserve the integrity of the corporate
entity.  However, no formal commitments or arrangements to advance or
loan funds to the Company or repay any such advances or loans
exist.  There is no legal obligation for either management or
significant stockholders to provide additional future funding.





While the
Company is of the opinion that good faith estimates of the Company’s ability to
secure additional capital in the future to reach our goals have been made, there
is no guarantee that the Company will receive sufficient funding to sustain
operations or implement any future business plan steps.








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
2005.  The Internal Revenue Service (IRS) commenced an examination of
the Company’s U.S. income tax returns for the year ended September 30, 2003
during 2005 and closed said examination in 2006.  The Company has been
effectively dormant since that time and does not anticipate any examinations of
returns filed since 2005.





The
Company uses the asset and liability method of accounting for income
taxes.  At December 31,, 2008 and 2007, 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.





7


Alliance
      Health, Inc.


Notes
      to Financial Statements - Continued


December
      31, 2008 and 2007







Note
D - Summary of Significant Accounting Policies - Continued








2.
            Income taxes -
      continued





The
Company adopted the provisions of FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes”, on October 1, 2007.  FASB Interpretation
No. 48 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 Interpretation 48, the Company did not incur any liability for
unrecognized tax benefits.





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
December 31, 2008 and 2007, and subsequent thereto, 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.





8


Alliance
Health, Inc.


Notes
to Financial Statements - Continued


December
31, 2008 and 2007








Note
F - Concentrations of Credit Risk





The
Company maintains its cash account in a financial institution subject to
insurance coverage issued by the Federal Deposit Insurance Corporation
(FDIC).  Under FDIC rules, the Company is entitled to aggregate
coverage of $250,000 per account type per separate legal entity per financial
institution.  During the years ended September 30, 2008 and 2007,
respectively, and the periods subsequent thereto, the Company did not maintain
deposits in any financial institution with credit risk exposures in excess of
statutory FDIC coverage and, accordingly, did not incurred any losses as a
result of any unsecured situations.








Note
G - Note Payable to Stockholder





In a
prior year, to fund the settlement of the audit of the Company’s 2003 Federal
Income Tax return by the Internal Revenue Service, the Company’s controlling
stockholder loaned the Company $166,500.  The note bears interest at
8.0% and matured August 3, 2008.  The Company  and the
controlling shareholder intend to negotiate an extension to this note and, at
the present time, has made no demand for repayment.








Note
H - Income Taxes





The  components
of income tax (benefit) expense for each of the three month periods ended
December 31, 2008 and 2007, respectively, are as follows:





Three
      months
                  
                  
                  Three
      monthsended
                  
                  
                  endedDecember
      31,
                  
                  
                  December
      31,2008
                  
                  
                  2007Federal:Current
                  
                  $
                  —
                  
                  
                  $
                  —Deferred
                  
                  
                  —
                  
                  
                  
                  ——
                  
                  
                  
                  —State:Current
                  
                  
                  —
                  
                  
                  
                  —Deferred
                  
                  
                  —
                  
                  
                  
                  ——
                  
                  
                  
                  —Total
                  
                  $
                  —
                  
                  
                  $
                  —





As of
December 31,, 2008, the Company had a cumulative net operating loss carryforward
of approximately $80,000 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).





In 2005,
the Company was the subject of an audit of its Form 1120-U. S. Corporation
Income Tax Return for the year ended September 30, 2003.  As a result
of this audit, it was discovered that certain errors in interpretation were made
by the Company’s former independent certified public accounting firm related to
the recognition of gains and losses on the sale of fixed assets and operating
activities to various entities controlled by the Company’s controlling
shareholder.  As a result of this audit, the Company was assessed an
additional approximate $143,447 in Federal Income Taxes, plus interest through
the payment date of approximately $23,000.  The Company paid the
assessment in August 2006 with the proceeds of a loan payable to an affiliate of
the Company’s controlling shareholder.  The Company filed litigation
against the Company’s former independent certified public accounting firm and
recovered the interest assessment of approximately $23,000 in January
2007.





9


Alliance
Health, Inc.


Notes
to Financial Statements - Continued


December
31, 2008 and 2007








Note
H - Income Taxes - Continued




The
Company's income tax expense (benefit) for each of the three month periods ended
December 31, 2008 and 2007, respectively, are as follows:





Three
      months
                        
                        
                        Three
      monthsended
                        
                        
                        endedDecember
      31,
                        
                        
                        December
      31,2008
                        
                        
                        2007Statutory
      rate applied to income before income taxes
                        
                        $
                        (2,000
                        )
                        
                        $
                        (2,000
                        )Increase
      (decrease) in income taxes resulting from:State
      income taxes
                        
                        
                        —
                        
                        
                        
                        —Other,
      including reserve for deferred
      tax asset and applicationof
      net operating loss carryforward
                        
                        
                        2,000
                        
                        
                        
                        2,000Income
      tax expense
                        
                        $
                        —
                        
                        
                        $
                        —





The
Company’s only temporary differences as of December 31, 2008 and 2007 relates
solely to the Company’s net operating loss.  Accordingly, any deferred
tax asset, has been fully reserved and is not material to the accompanying
financial statements.

















(Remainder
of this page left blank intentionally)


10


PartI - 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 December 31,
2008 and 2007, respectively.





General
and administrative expenses for the three month periods ended December 31, 2008
and 2007 were 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 three month periods ended December 31, 2008 and
2007 were $-0- and $-0-, 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.





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.





(3)
            Liquidity
      and Capital Resources





At
December 31, 2008 and 2007, respectively, the Company had working capital of
approximately $(195,000) and $(172,000).  The deficiency relates
directly 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.





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






12


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.





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.





(4)
            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.






Item3 - 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





(a)           Evaluation
of Disclosure Controls and Procedures





Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as
amended (Exchange Act), as of December 31, 2008.  Based on this
evaluation, our principal executive officer and principal financial officer
concluded that our disclosure controls and procedures are effective in alerting
them on a timely basis to material information relating to our Company required
to be included in our reports filed or submitted under the Exchange
Act.





(b)           Changes
in Internal Controls





There
were no significant changes (including corrective actions with regard to
significant deficiencies or material weaknesses) in our internal controls over
financial reporting that occurred during the quarter ended December 31, 2008
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.








Part
II - Other Information





Item 1 - Legal Proceedings





None






Item2 - Recent Sales of Unregistered Securities and Use of
Proceeds





None





13


Item 3 - Defaults on Senior Securities





None





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





The
Company has held no regularly scheduled, called or special meetings of
stockholders during the reporting period.





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:
      January 23, 2009
              
              /s/
      Sarkis J. Kechejian, M. D.Sarkis
      J. Kechejian, M. D.President,
      Chief Executive Officer,Chief
      Financial Officer and Director


14