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, 2010o
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: May 11, 2010: 1,534,066
 
 Transitional Small Business Disclosure Format (check one): YES  o  NO  x





Alliance Health, Inc.





Form 10-Q for the Quarter ended March 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 - 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


March 31, 2010 and September 30, 2009








(Unaudited)


(Audited)March 31,


September 30,2010


2009ASSETSCurrent AssetsCash on hand and in bank

$
781


$
1,981Total Current Assets

$
781


$
1,981LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent LiabilitiesAccounts payable - trade

$
—


$
—Accrued liabilities


2,516



3,391Note payable to stockholder


169,900



166,500Accrued interest payable to stockholder


48,864



42,150Total Liabilities


221,280



212,041Commitments 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


(235,840
)


(225,401
)Total Stockholders’ Deficit


(220,499
)


(210,060
)TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$
781


$
1,981

















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, 2010 and 2009





(Unaudited)








Six months


Six months


Three months


Three monthsended


ended


ended


endedMarch 31,


March 31,


March 31,


March 31,2010


2009


2010


2009Revenues

$
—


$
—


$
—


$
—Operating ExpensesProfessional fees


3,350



4,650



1,550



2,040General and administrative expense


375



100



375



100Total Operating Expenses


3,725



4,750



1,925



2,140Loss from Operations


(3,725
)


(4,750
)


(1,925
)


(2,140
)Other Income (Expense)Interest income


—



—Interest expense


(6,714
)


(6,642
)


(3,350
)


(3,285
)Loss before Income Taxes


(10,439
)


(11,392
)


(5,275
)


(5,425
)Provision for Income Taxes


—



—



—



—Net Loss


(10,439
)


(11,392
)


(5,275
)


(5,425
)Other Comprehensive Income


—



—



—



—Comprehensive Loss

$
(10,439
)

$
(11,392
)

$
(5,275
)

$
(5,425
)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, 2010 and 2009





(Unaudited)








March 31,


March 31,2010


2009Cash flows from operating activitiesNet loss for the period

$
(10,439
)

$
(11,392
)Adjustments to reconcile net loss to netcash provided by (used in) operating activitiesDepreciation and amortization


—



—Increase (Decrease) inAccounts payable and other accrued liabilities


(875
)


(670
)Interest payable to stockholder


6,714



6,642Net cash provided by (used in) operating activities


(1,200
)


(5,420
)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


(1,200
)


(5,420
)Cash at beginning of year


1,981



9,951Cash at end of year

$
781


$
4,531Supplemental 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, 2010 and September 30, 2009








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 stockholder, 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 stockholder.  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, 2009.  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, 2010.


6


Alliance Health, Inc.


Notes to Financial Statements - Continued


March 31, 2010 and September 30, 2009








Note C - Going Concern Uncertainty





Since September 2003, the Company has had no operations and currently has nominal cash on hand, no operating assets and a business plan with inherent risk.  The Company’s current 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.





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.  Management is of the belief that sufficient operating capital exists to support the Company’s requirements during the next twelve months.  However, should the current working capital be insufficient, the Company may become reliant on additional funds loaned by management and/or significant stockholders.  In this scenario, the Company’s current majority stockholder intends to continue the funding of nominal necessary expenses to sustain the corporate entity.  However, 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 of working capital to support the Company.





In such a restricted cash flow scenario, the Company may be unable to complete its business plan steps, and would, instead, delay all cash intensive activities.  Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market.





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.





The Company’s articles of incorporation authorizes the issuance of up to 1,000,000 million shares of preferred stock and 20,000,000 shares of common stock.  The Company’s ability to issue preferred stock may limit the Company’s ability to obtain debt or equity financing as well as impede potential takeover of the Company, which takeover may be in the best interest of stockholders.  The Company’s ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities.





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 its 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.


7


Alliance Health, Inc.


Notes to Financial Statements - Continued


March 31, 2010 and September 30, 2009








Note D - Summary of Significant Accounting Policies - Continued





2.
Income taxes





The Company files income tax returns in the United States of America and may file, as applicable and appropriate, various state(s).  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 2006.  The Company does not anticipate any examinations of returns filed since 2006.





The Company uses the asset and liability method of accounting for income taxes.  At March 31, 2010 and September 30, 2009, 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.





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, 2010 and 2009, 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.


8


Alliance Health, Inc.


Notes to Financial Statements - Continued


March 31, 2010 and September 30, 2009








Note E - Fair Value of Financial Instruments - Continued





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 - Note Payable to Stockholder





In a prior year, the Company’s controlling stockholder loaned the Company $166,500.  The note bears interest at 8.0%, is unsecured and originally matured on August 3, 2008.  This note is currently due upon demand and no demand for repayment.





The Company and its controlling stockholder have acknowledged that outside funds are necessary to support the corporate entity and comply with the periodic reporting requirements of the Securities Exchange Act of 1934, as amended.  Accordingly, the Company’s controlling stockholder has advanced the Company an additional $3,400 at an interest rate of 6.0% per annum.  These advances are due upon demand, piggyback the note payable discussed above and are unsecured.








Note G - Income Taxes





The  components of income tax (benefit) expense for each of the six month periods ended March 31, 2010 and 2009, respectively, are as follows:





Six months


Six monthsended


endedMarch 31,


March 31,2010


2009Federal:Current

$
—


$
—Deferred


—



——



—State:Current


—



—Deferred


—



——



—Total

$
—


$
—





As of March 31, 2010, the Company has a cumulative net operating loss carryforward of approximately $70,000 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).










(Remainder of this page left blank intentionally)


9


Alliance Health, Inc.


Notes to Financial Statements - Continued


March 31, 2010 and September 30, 2009








Note G - Income Taxes - Continued





The Company's income tax expense (benefit) for each of the six month periods ended March 31, 2010 and 2009, respectively, differed from the statutory federal rate of 34 percent as follows:





Six months


Six monthsended


endedMarch 31,


March 31,2010


2009Statutory rate applied to income before income taxes

$
(3,500
)

$
(3,900
)Increase (decrease) in income taxes resulting from:State income taxes


—



—Other, including reserve fordeferred tax asset and applicationof net operating loss carryforward


3,500



3,900Income tax expense

$
—


$
—





The Company’s only temporary difference as of March 31, 2010 and December 31, 2009, respectively, relates to the Company’s net operating loss pursuant to the applicable Federal Tax Law.  As of March 31, 2010 and December 31, 2009, respectively, the deferred tax asset is as follows:





March 31,


December 31,2010


2009Deferred tax assetsNet operating loss carryforwards

$
23,500


$
20,000Less valuation allowance


(23,500
)


(20,000
)Net Deferred Tax Asset

$
—


$
—





During the six month period ended March 31, 2010 and for the year ended December 31, 2009, respectively, the valuation allowance against the deferred tax asset increased by approximately $3,500 and $7,200.








Note H - Subsequent Events





Management has evaluated all activity of the Company through May 12, 2010 (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.


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 six or three month periods ended March 31, 2010 or 2009, respectively.





General and administrative expenses for the six and three month periods ended March 31, 2010 and 2009 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 and three month periods ended March 31, 2010 and 2009 were $(0.01), $(0.01), $-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 March 31, 2010 and September 30, 2009, respectively, the Company had a working capital deficit of approximately $(221,000) and $(210,000).  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.





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.


12


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.





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.





(5)
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.








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.








Item4 - 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 March 31, 2010.  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.


13


(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 March 31, 2010 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








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





None








Item 3 - Defaults on Senior Securities





None








Item4 - 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.








Item5 - 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: May 12, 2010
/s/ Sarkis J. Kechejian, M. D.Sarkis J. Kechejian, M. D.President, Chief Executive Officer,Chief Financial Officer and Director


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