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 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
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| Part I - Financial Information | |
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| 11 |
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| 13 |
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| 13 |
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| Part II - Other Information | |
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| 13 |
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| 13 |
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| 14 |
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| 14 |
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| 14 |
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| 14 |
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| 14 |
Part I
Item 1 - Financial Statements
Alliance Health, Inc.
Balance Sheets
December 31, 2008 and September 30, 2008
| | | (Unaudited) | | | (Audited) | |
| | | December 31, | | | September 30, | |
| | | 2008 | | | 2008 | |
| ASSETS | | | | | | |
| Current Assets | | | | | | |
| Cash on hand and in bank | | $ | 6,001 | | | $ | 9,951 | |
| | | | | | | | | |
Total Current Assets | | | 6,001 | | | | 9,951 | |
| | | | | | | | | |
| Total Assets | | $ | 6,001 | | | $ | 9,951 | |
| | | | | | | | | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | |
| Liabilities | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts payable - trade and accrued liabilities | | $ | 2,229 | | | $ | 3,569 | |
| Note payable to controlling shareholder | | | 166,500 | | | | 166,500 | |
| Accrued interest payable to controlling stockholder | | | 32,187 | | | | 28,830 | |
| | | | | | | | | |
Total Current Liabilities | | | 200,916 | | | | 198,899 | |
| | | | | | | | | |
| Long-Term Liabilities | | | | | | | | |
| Note payable to controlling stockholder | | | ¾ | | | | ¾ | |
| | | | | | | | | |
Total Liabilities | | | 200,916 | | | | 198,899 | |
| | | | | | | | | |
| | | | | | | | | |
| Commitments and Contingencies | | | | | | | | |
| | | | | | | | | |
| Stockholders’ Equity (Deficit) | | | | | | | | |
| Preferred stock - $0.01 par value | | | | | | | | |
| 1000,000 shares authorized. | | | | | | | | |
| None issued and outstanding | | | ¾ | | | | ¾ | |
| Common stock - $0.01 par value. | | | | | | | | |
| 20,000,000 shares authorized. | | | | | | | | |
| 1,534,066 shares issued and outstanding | | | 15,341 | | | | 15,341 | |
| Additional paid-in capital | | | ¾ | | | | ¾ | |
| Accumulated 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.
Alliance Health, Inc.
Statements of Operations
Three months ended December 31, 2008 and 2007
(Unaudited)
| | | Three months | | | Three months | |
| | | ended | | | ended | |
| | | December 31, | | | December 31, | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Revenues | | $ | ¾ | | | $ | ¾ | |
| | | | | | | | | |
| Operating Expenses | | | | | | | | |
| General and administrative expense | | | 2,610 | | | | 2,661 | |
Total Operating Expenses | | | 2,610 | | | | 2,661 | |
| | | | | | | | | |
| Loss from Operations | | | (2,610 | ) | | | (2,661 | ) |
| | | | | | | | | |
| Other Income (Expense) | | | | | | | | |
| Interest income | | | ¾ | | | | ¾ | |
| Interest expense | | | (3,357 | ) | | | (3,357 | ) |
| | | | | | | | | |
| Loss before Income Taxes | | | (5,967 | ) | | | (6,018 | ) |
| | | | | | | | | |
| Provision for Income Taxes | | | ¾ | | | | ¾ | |
| | | | | | | | | |
| Net Income (Loss) | | | (5,967 | ) | | | (6,018 | ) |
| | | | | | | | | |
| Other Comprehensive Income | | | ¾ | | | | ¾ | |
| | | | | | | | | |
| Comprehensive 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 | | | $ | 0.00 | |
| | | | | | | | | |
| Weighted-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.
Alliance Health, Inc.
Statements of Cash Flows
Three months ended December 31, 2008 and 2007
(Unaudited)
| | | Three months | | | Three months | |
| | | ended | | | ended | |
| | | December 31, | | | December 31, | |
| | | 2008 | | | 2007 | |
| Cash flows from operating activities | | | | | | |
| Net income (loss) for the period | | $ | (5,967 | ) | | $ | (6,018 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities | | | | | | | | |
| Depreciation and amortization | | | — | | | | — | |
| (Increase) Decrease in | | | | | | | | |
| Lawsuit settlement receivable | | | — | | | | — | |
| Increase (Decrease) in | | | | | | | | |
| Accounts payable and other accrued liabilities | | | (1,340 | ) | | | (5,164 | ) |
| Accrued interest payable to stockholder | | | 3,357 | | | | 3,357 | |
| Income 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 | | | | 22,536 | |
| | | | | | | | | |
| Cash at end of period | | $ | 6,001 | | | $ | 14,711 | |
| | | | | | | | | |
Supplemental disclosure of interest and income taxes paid | | | | | | | | |
| Interest 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.
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.
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.
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.
| | 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.
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 months | |
| | | ended | | | ended | |
| | | December 31, | | | December 31, | |
| | | 2008 | | | 2007 | |
| Federal: | | | | | | |
| 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.
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 months | |
| | | ended | | | ended | |
| | | December 31, | | | December 31, | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Statutory 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 application | | | | | | | | |
| of net operating loss carryforward | | | 2,000 | | | | 2,000 | |
| | | | | | | | | |
| Income 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)
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.
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
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.
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
(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
None
Item 2 - Recent Sales of Unregistered Securities and Use of Proceeds
None
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.
None
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. | |
| | | | |
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| Dated: January 23, 2009 | | /s/ Sarkis J. Kechejian, M. D. | |
| | | Sarkis J. Kechejian, M. D. | |
| | | President, Chief Executive Officer, | |
| | | Chief Financial Officer and Director | |
