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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB-A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1996
Commission file number 33-17387
ALLIANCE HEALTH, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-219377
(State or other jurisdiction of (I.R.S. Employer I.D.#)
incorporation or organization)
421 E. Airport Freeway, Irving, Texas 75062
(Address of principal executive office) (Zip Code)
Issuer's telephone number, including area code (972)-255-5533
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange on
Title of each class which registered
- -----------------------------------------------------------------------------
Securities registered under Section 12(g) of the Exchange Act:
_____________________________________________________________________________
(Title of class)
_____________________________________________________________________________
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X No
State issuer's revenues for its most recent fiscal year $1,498,934.
State the aggregate market value of the voting stock held by non-
ffiliates computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified date within
the past 60 days. No market for common stock.
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribu-
tion of securities under a plan confirmed by a court. Yes X No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 3,590,000
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PART I.
Item 6. Management's Discussion and Analysis or Plan of Operation
Prior to May 1995, the Company had no operating business since June
1990. On May 12, 1995, an 8-K was filed regarding the acquisition of the
Marketing Division of K Clinics which included $285,879 in cash in exchange
for one million two hundred thousand (1,200,000) shares of common stock of
Alliance Health, Inc. (the "Company"). K Clinics is wholly owned by Sarkis
J. Kechejian, M.D. who is also the principal shareholder of the Company.
The Company's primary source of income during the year was from the
marketing service and was $1,085,000 compared to $1,080,000 in 1995. The
marketing income was up for the year due to a marketing arrangement made with
Metro Pharmacy, Inc. in September, 1996. This will increase the marketing
income during 1996-1997 approximately $60,000 or to $1,140,000 for the year.
Other marketing income was generated from S. J. Kechejian, M.D., P.A. and
Metroplex Specialties, Inc. and is expected to increase with the opening of
additional clinics. The Company also entered into an agreement with
Metroplex Specialties, Inc. for the lease of its MRI. The revenue from
Metroplex Specialties, Inc. is on a per scan basis and is expected to
continue at roughly $30,000 per month during the next year. The Company
acquired the net assets of a hospital collection service during the year, but
the transaction was later rescinded and the operations are shown as other
income and expenses in the accompanying combined statement of income. The
total income (after removing the collection service income) was an increase
of approximately 38% over 1995.
Expenses in 1996 increased 15% over 1995. This was due primarily to the
additional depreciation expense of the new MRI. General and administrative
expenses decreased 32% during the 1996 year while salaries and employee
benefits increased 10% in 1996.
The Company is discontinuing the management of the Aldine Medical Clinic
in Houston. Until the proper business development person can be hired, the
Company feels the Houston location cannot be profitable. The Aldine Medical
Clinic was closed and all assets removed. At the September 26, 1996 Board of
Director's meeting, it was decided to discontinue the operation.
The Company has arranged for a lease on a location in Tyler, Texas,
effective November, 1996. At this time the Company and Aldine Medical
Associates ("Aldine") are in negotiations for Aldine to operate the medical
practice at this clinic. It is expected that the Company and Aldine will
enter into a Management Service Agreement whereby all administrative, billing
and collecting functions will be performed by the Company. The Company
expects to loan Aldine start up operating costs paid back with an interest
rate of ten percent (10%).
All furniture, fixtures, and equipment (FF&E) will be leased to Aldine
at cost plus fifteen percent (15%). The majority of the FF&E to be leased to
Aldine for the Tyler clinic is from the Aldine Medical Clinic of Houston (now
closed) and any additional FF&E required will be purchased by the Company and
leased at the same rate.
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Liquidity and Financial Resources
The Company had $364,958 in cash at September 30, 1996.
The Company has a lease agreement with Metroplex Specialties for the MRI
at $300/per scan. It is expected this lease will continue to produce
approximately $30,000 per month.
The Company receives $90,000 per month from S. J. Kechejian, M.D., P.A.
for marketing services. This is an ongoing arrangement acquired with the
marketing division from K Clinics. It is anticipated the revenue for
marketing services will increase 10% in the next year as S. J. Kechejian,
M.D., P.A. is expected to add additional clinic locations thus increasing
the need for additional marketing services.
The Company has no long term debt outstanding at year end. Income from
the marketing division and lease of the MRI are expected to be sufficient
cash flow to cover all operating and administrative expenses.
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ALLIANCE HEALTH, INC.
Notes to Combined Financial Statements
4. Income Taxes
Following is a reconciliation between reported income taxes and the amount
computed by applying the statutory federal income tax rates to pre-tax
accounting income for the periods ended September 30:
1996 1995
Expected provision for federal
income taxes $135,000 $58,000
Utilization of net operating loss
carry forward for earnings after
acquisition of K Clinics (66,000) (21,700)
Other 3,238 -
________ _______
$ 72,238 $36,300
Income tax expense for each year consisted of current taxes.
The components of the deferred tax asset (liability) are as
follows at September 30:
1996 1995
Depreciation $ (56,269) $(38,700)
Cash basis (6,969) -
Deduction of sales tax expense - (21,500)
Net operating loss carryforward - 91,700
Deferred tax asset valuation
allowance - (31,500)
________ _________
$ (63,238) $ -
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Part III
Item 9. Directors, Executive Officers, Promoters and Control
Persons, Compliance with Section 16(A) of the Exchange Act
The executive officers and directors of Alliance Health,
Inc. are identified in the following table. Each has held the
indicated positions with Alliance Health, Inc. since May 19,
1995, except Mac Martirossian who was elected to the Board on May
17, 1996, and will serve in these offices until their successors
are elected and qualified.
NAME AGE POSITION
Sarkis J. Kechejian 58 President, Treasurer
and Chairman of the Board
Sharilyn J. Bruntz Wilson 46 Vice President and
Secretary
Kenneth Guest 57 Director
James Kenney 55 Director
George Nicolaou, M.D. 75 Director
Mac Martirossian 42 Director
Dr. Kechejian is also president and sole owner of S. J.
Kechejian, M.D., P.A. dba Doctor's Clinic which consists of
nineteen clinics treating patients injured on the job or in auto
accidents.
Ms. Wilson is Secretary and Chief Financial Officer of S. J.
Kechejian, M.D., P.A. and was Secretary/Treasurer of K Med
Centers, Inc. from January, 1987 until December, 1991. Prior to
that time, for over five years, she was a Legal Assistant with
several law firms.
Mr. Guest is an attorney who has been practicing in the Dallas
area since 1965. He is with the law firm of Ken Guest and
Associates. He has investments in several manufacturing and
retail businesses.
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James W. Kenney has been a Director since September, 1992. He
is currently associated with San Jacinto Securities, Inc. as
Executive Vice President. From February, 1992 to June, 1993 he
served as Vice President of Investments for Renaissance Capital
Group, Inc. From October, 1989 to February, 1992 he served as
Senior Vice President, Director of Trading and Sales for Capital
Institutional Services. From February, 1987 to October, 1989, he
served as Senior Vice President for retail sales for Rauscher
Pierce Refsnes, Inc. Mr. Kenney received a BA degree in
economics from the University of Colorado in Boulder, Colorado.
Mr. Kenney also currently serves on the Board of Directors of the
following companies: AmeriShop Corporation, Consolidated Health
Care Associates, Inc., Industrial Holdings, Inc., Scientific
Measurement Systems, Tecnol Medical Products, Inc., and Tricom
Corporation.
Dr. Nicolaou is a retired physician. He has extensive
business experience doing consulting work.
Mac Martirossian joined the Board as a Director on May 17,
1996. He joined Howard Schultz & Associates as Vice President-Marketing
in January, 1996. From April 1989 to August 1995, he
served in various Executive Management positions at AMRE, Inc.,
with his last position as Vice President-Operations.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ALLIANCE HEALTH, INC.
DATED: May 6, 1997 By: Sarkis J. Kechejian,M.D.
Chairman of the Board,
President and Treasurer
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
DATED: May 6, 1997 _________________________
Sarkis J. Kechejian, M.D.
Chairman of the Board and
President and Treasurer
DATED: May 6, 1997 __________________________
James Kenney
Director
DATED: May 6, 1997 __________________________
George Nicolaou, M.D.
Director
DATED: May 6, 1997 __________________________
Kenneth Guest
Director
DATED: May 6, 1997 __________________________
Mac Martirossian
Director
