<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to __________
Commission file number 33-17387
ALLIANCE HEALTH, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 75-2192377
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
421 E. Airport Freeway, Irving, Texas 75062
(Address of principal executive office)
(214)-255-5533
(Issuer's telephone number)
____________________________________________________________
(Former name, former address and former fiscal year,
if changed since last year)
Check whether 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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: At June 30, 1997,
3,660,000 shares of common stock, $0.01 par value, were outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes No X
<PAGE>
ALLIANCE HEALTH, INC.
INDEX
PAGE NUMBER
PART I FINANCIAL INFORMATION
Balance Sheet - June 30, 1997 and
September 30, 1996 1
Statement of Loss - Three Months and
Six Months Ended June 30, 1997 2
Statement of Cash Flow - Six Months Ended
June 30, 1997 and 1996 3
Notes to Financial Statements 4-5
Management's Discussion and Analysis of
Financial Condition and Results of
Operation 6-7
PART II OTHER INFORMATION
Item 5. Exhibits and Reports on Form 8-K 8
SIGNATURES 9
<PAGE>
ALLIANCE HEALTH, INC.
PART I - FINANCIAL INFORMATION
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
Jun 30, 1997 Sep 30, 1996
Unaudited Audited
<S> <C> <C>
Current assets:
Cash $ 946,513 $ 364,958
Accounts receivable-affiliate 147,980 63,350
Other assets 50,771 6,922
________ ________
Total Current Assets 1,145,264 435,230
Property & equipment 1,111,421 1,111,422
Less accumulated depreciation (299,382) (172,481)
_________ _________
812,039 938,941
_________ _________
$1,957,303 $1,374,171
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
Trade $ 0 $ 33,246
Affiliate 99,500 171
Accrued liabilities (1,634) 1,356
Income taxes payable 63,238 0
________ _________
Total current liabilities 161,104 34,773
Stockholders' equity:
Common stock-par value of $0.01
per share; authorized 20,000,000,
issued 3,660,000 shares 35,900 35,900
Additional paid-in capital 831,166 831,166
Retained earnings 929,133 409,094
_________ _________
Total stockholders' equity 1,796,199 1,276,160
_________ _________
$1,957,303 $1,374,171
</TABLE>
The accompanying notes are an integral part of these financial
statements
-1-
<PAGE>
ALLIANCE HEALTH, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Jun 30, Jun 30, Jun 30, Jun 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUES: $ 541,994 $ 492,171 $1,521,478 $1,241,746
________ __________ __________ ________
Advertising 164,574 135,531 394,918 373,150
Salaries & employee
Benefits 88,686 111,669 218,805 220,438
Depreciation 42,300 42,059 126,901 122,540
General & administrative 178,290 72,162 260,815 138,178
_________ ________ _________ _________
435,780 361,421 1,001,439 854,306
Operating income 106,214 130,750 520,039 387,440
Income taxes (benefit) -0- 40,100 -0- 40,100
_________ ________ _________ _________
Net income $ 106,214 $ 90,650 $ 520,039 $ 347,340
_________ ________ _________ _________
Net income per
common share $ .02 $ .04 $ .14 $ .11
Weighted average number of
shares outstanding 3,590,000 3,601,667 3,590,000 3,595,833
</TABLE>
The accompanying notes are an integral part of the financial
statements.
-2-
<PAGE>
ALLIANCE HEALTH, INC.
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
Nine Months Ended
Jun 30 Jun 30
1997 1996
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating
activities:
Net income (loss) $ 520,039 $ 347,340
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities:
Depreciation 126,901 122,540
Accounts Receivable (79,703) 3,782
Income Tax Payable -0- 40,100
Other Assets (48,776) (20,618)
Accounts Payable 66,083 (4,611)
Accrued liabilities (2,990) (62,124)
________ _______
Net cash provided by
(used in) operating
activities 581,554 426,409
________ _______
Cash flows from investing activities:
Purchase of equipment -0- (155,170)
________ ________
Net increase (decrease) in cash 581,554 271,239
Cash at beginning of period 364,959 46,741
________ ________
Cash at end of period $ 946,513 $317,980
_________ ________
</TABLE>
The accompanying notes are an integral part of these financial
statements.
-3-
<PAGE>
ALLIANCE HEALTH, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB of Regulation S-B. They
do not include all information and footnotes required by generally accepted
accounting principles for complete financial statements. However, except as
disclosed herein, there has been no material change in the information disclosed
in the notes to the financial statements for the year ended September 30, 1996
included in the Company's Annual Report on Form 10-KSB filed with the Securities
and Exchange Commission. The interim unaudited financial statements should be
read in conjunction with those financial statements included in the Form 10-KSB.
In the opinion of management, all adjustments considered necessary for a fair
presentation, consisting solely of normal recurring adjustments, have been
made. Operating results for the three month period ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the year ending
September 30, 1997.
All of the Company's income was for services to S. J. Kechejian, M.D.,
P.A., Metroplex Specialties, P.A., Metro Pharmacy, Inc. And Aldine Medical
Associates, companies owned by the Company's major stockholder.
Note 2. Organization
Alliance Health, Inc. (the "Company") was incorporated in Delaware on
September 4, 1987. Effective May 12, 1995, the Company acquired the advertising
division (the "Division") of K Clinics, P.A. ("K Clinics") from S. J. Kechejian,
M.D. for 1,200,000 shares of the Company's stock. The acquisition has been
accounted for in a manner similar to the pooling-of-interests method due to Dr.
Kechejian's control of the respective companies.
-4-
<PAGE>
ALLIANCE HEALTH, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF INTERIM FINANCIAL INFORMATION
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial condition and
operating results for the period included in the accompanying financial
statements.
Results of Operation and Financial Condition
For the quarter ending June 30, 1997 and 1996, the Company had net income
of $106,214 and $90,650 respectively. Revenues consisted of $233,600 from
Metroplex Specialties for lease of the Company's MRI, $300,000 for advertising
from S. J. Kechejian, M.D., P.A., Metroplex Specialties, P.A. and Metro
Pharmacy, Inc. The income generated from leasing the MRI to Metroplex
Specialties is on a per scan basis and is expected to continue at roughly
$70,000 per month which is an increase from last quarter of 40%.
The Company is researching the possibility of purchasing and installing
another MRI in Ft. Worth to be leased to Metroplex Specialties, P.A. The Board
has directed management to prepare a business plan for expanding the Company to
a full service Management Service Organization (MSO). The advertising income
generated from monthly billings were increased in December 1996 from $95,000 to
$100,000 per month. The advertising income generated is an ongoing arrangement
with the aforementioned companies billed at $300,000 during the quarter. The
quarter's revenue constitutes a 10.59% decrease over the same quarter in 1996.
For the nine months ended June 30, 1997, the Company had a net income of
$520,039. Revenues YTD consisted of $569,900 from Metroplex Specialties for the
lease of the Company's MRI, $890,000 for advertising from S. J. Kechejian, M.D.,
P.A. and Metroplex Specialties, $16,919 in bank interest. The Company's 1997
revenue constitutes a 22% increase over the same nine months ended June 30,
1996.
Expenses during the quarter ended June 30, 1997 included advertising,
salaries and employee benefits, depreciation and other general and
administrative costs in the amount of $435,780. This is roughly a 20% increase
in expenses from last year at this time. For the nine months ended June 30,
1997, expenses for advertising, salaries and employee benefits and other general
and administrative costs were $1,001,439. This represents only a 16.9% increase
in costs from the nine months ended June 30, 1996.
-5-
<PAGE>
Liquidity and Capital Resources
The Company had total assets of $1,957,303 at June 30, 1997. Advertising
income is expected to continue at approximately $100,000 per month and may
increase if S. J. Kechejian, M.D., P.A. or Metroplex Specialties, P.A. opens
additional facilities. The Company is continuing to market the advertising
package to other medical providers.
Current liabilities included accounts payable affiliates ($99,500),
accrued payroll taxes ($1,634.17) and accrued income tax ($63,238.00).
-6-
<PAGE>
ALLIANCE HEALTH, INC.
PART II - OTHER INFORMATION
Item 5. Exhibits and Reports on Form 8-K
-7-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
DATED: July 15, 1997 By: Sarkis J. Kechejian, M.D.
Sarkis J. Kechejian, M.D.
President, Director and
Treasurer
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1996 SEP-30-1995
<PERIOD-START> APR-01-1997 APR-01-1996
<PERIOD-END> JUN-30-1997 JUN-30-1996
<CASH> 946,513 364,958
<SECURITIES> 0 0
<RECEIVABLES> 147,980 63,350
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 1,145,264 435,230
<PP&E> 1,111,421 1,111,422
<DEPRECIATION> (299,382) (172,481)
<TOTAL-ASSETS> 1,957,303 1,374,171
<CURRENT-LIABILITIES> 161,104 34,773
<BONDS> 0 0
0 0
0 0
<COMMON> 35,900 35,900
<OTHER-SE> 1,760,299 1,276,160
<TOTAL-LIABILITY-AND-EQUITY> 1,957,303 1,374,171
<SALES> 0 0
<TOTAL-REVENUES> 541,994 492,171
<CGS> 0 0
<TOTAL-COSTS> 435,780 361,421
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 40,100
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 106,214 90,650
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
