BioCube, INC. - FORM 10-Q - December 20, 2010

Attached files

file	filename
EX-31 - CERTIFICATION - BioCube, INC.	ex31.htm
EX-32 - CERTIFICATION - BioCube, INC.	ex32.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2010

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 333-137920

ALLIANCE NETWORK COMMUNICATIONS

HOLDINGS, INC.

(Exact name of Company as specified in its charter)

Delaware	20-3547389
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1365 N. Courtenay Parkway, Suite A Merritt Island, FL	32953
(Address of Company’s principal executive offices)	(Zip Code)

(321) 452-9091

(Company’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Company: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ 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
Non-accelerated filer o (Do not check if a smaller reporting company)	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 o No þ

As of December 15, 2010, there were outstanding 28,727,778 Common Shares, $.001 par value per share, of the Company.

TABLE OF CONTENTS

PART I

Item 1.	Financial Statements	1

	Consolidated Balance Sheets at October 31, 2010 (unaudited) and January 31, 2010	1

	Consolidated Statements of Operations for the three months ended October 31, 2010 and 2009, the nine months ended October 31, 2010 and the periods from inception (April 20, 2009) through October 31, 2010 and 2009 (unaudited)	2

	Consolidated Statement of Stockholders’ Equity from inception (April 20, 2009) through October 31, 2010	3

	Consolidated Statements of Cash Flows for the nine months ended October 31, 2010 and the periods from inception (April 20, 2009) to October 31, 2010 and 2009 (unaudited)	4

	Notes to Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4.	Controls and Procedures	14

PART II

Item 1.	Legal Proceedings	15

Item 1A.	Risk Factors	16

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3.	Defaults Upon Senior Securities	16

Item 4.	Removed and reserved	16

Item 5.	Other Information	16

Item 6.	Exhibits	16

Signatures		17

	EX-31: CERTIFICATION

	EX-32: CERTIFICATION

PART I — FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ALLIANCE NETWORK COMMUNICATIONS HOLDINGS, INC

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS


	October 31, 2010			January 31, 2010
	(unaudited)
ASSETS

CURRENT ASSETS
Cash	$	3,852		$	3,056
Deferred finance costs		-			4,344
Other current assets		-			3,400
Total current assets		3,852			10,800



Note and interest receivable		101,916			100,917
Decontamination system, net of amortization of $750		26,250			-

Goodwill		311,304			-
TOTAL ASSETS	$	443,322		$	111,717



LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	139,993		$	16,797
Due to related party – current		34,500			18,200
Accrued interest payable-related party		3,718			1,310
Accrued salaries		318,387			-

Total current liabilities		496,598			36,307

Due to related party – non-current		200,846			83,200
Accrued interest payable-related party non-current		12,249			1,833
TOTAL LIABILITIES		709,693			121,340

STOCKHOLDERS' DEFICIENCY
Preferred stock – Series A – $.001 par value, 21,000 shares authorized, issued and outstanding		21			21
Common stock - $.001 par value, authorized 300,000,000, 28,727,778 and 19,977,778 shares issued and outstanding at October 31, 2010 and January 31, 2010		28,728			19,978
Additional paid in capital		94,368			94,368
Deficit accumulated during the development stage		(389,488	)		(123,990	)
Total stockholders' deficiency		(266,371	)		(9,623	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	443,322		$	111,717

See notes to the consolidated financial statements.

ALLIANCE NETWORK COMMUNICATIONS HOLDINGS, INC

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

					From April 20, 2009 (Inception) through October 31, 2009	From April 20, 2009 (Inception) through October 31, 2010
		Three Months Ended October 31, 2010	Three Months Ended October 31, 2009	Nine Months Ended October 31, 2010



Revenues		$ -	$ -	$ -	$ -	$ -

Operating expenses
	Consulting	11,935	-	75,000	-	116,000
	Professional fees	6,600	-	29,600	2,500	61,240
	Officer salaries	35,806	-	45,000	-	45,000
	General and administrative	16,722	18,663	33,449	18,663	54,872
	Total operating expenses	71,063	18,663	183,049	21,163	277,112
Loss from operations		(71,063)	(18,663)	(183,049)	(21,163)	(277,112)

Other income (expense)
	Finance cost	(7,528)	-	(70,821)	-	(99,831)
	Interest, net	(4,885)	(4,615)	(11,628)	(921)	(12,545)

Loss before income taxes		(83,476)	(23,278)	(265,498)	(22,084)	(389,488)
Income taxes		-	-	-	-	-
Net loss		$ (83,476)	$ (23,278)	$ (265,498)	$ (22,084)	$ (389,488)
Net loss per common share (basic and diluted)		$ -	$ -	$ (0.01)	$ -	$ (0.02)

Weighted average shares outstanding
	(basic and diluted)	28,727,778	19,977,778	21,784,843	19,977,778	20,333,013

See notes to the consolidated financial statements.

ALLIANCE NETWORKS COMMUNICATIONS HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

From Inception (April 20, 2009) to October 31, 2010

	Preferred Stock						Common Stock						Paid In			Deficit Accumulated During Development			Total Stockholders’
	Shares			Amount			Shares			Amount			Capital			Stage			Equity
Balances at April 20, 2009		-		$	-			-		$	-		$	-		$	-		$	-
Common stock issued to founders for cash			-			-		1,000,000			100				-		-			100

Effect of recapitalization – reverse acquisition		21,000			21			18,977,778			19,878			80,101			-			100,000

Issuance of warrants in connection with financing – related party			-			-			-			-		7,517				-		7,517

Financing cost – related party			-			-			-			-		6,750				-		6,750

Net (loss) for period ended January 31, 2010		-			-			-			-			-			(123,990	)		(123,990	)

Balance, January 31, 2010		21,000			21			19,977,778			19,978			94,368			(123,990	)		(9,623)
Stock issued for acquisition		-			-			8,750,000			8,750			-			-			8,750
Adjustment for Acquisition		-			-			-			-			-			-			-

Net (loss) for period ended October 31, 2010		-			-			-			-			-			(265,498)			(265,498)
Balance, October 31, 2010		21,000		$	21			28,727,778		$	28,728		$	94,368		$	(389,488)		$	(266,371)

See notes to the consolidated financial statements

ALLIANCE NETWORK COMMUNICATIONS HOLDINGS, INC

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

	Nine Months Ended October 31, 2010			From April 20, 2009 (Inception) to October 31, 2009			From April 20, 2009 (Inception) to October 31, 2010

CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss	$	(265,498	)	$	(22,084)		$	(389,488	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization		9,894			721			21,017
Beneficial conversion feature		59,386			-			80,186
Changes in operating assets and liabilities: Other current assets		3,400			(3,400)			-
Accrued interest receivable		(999)			-			(1,917)
Accounts payable and accrued expenses		120,891			10,020			137,689
Accrued interest payable		12,175			-			15,318
NET CASH USED IN OPERATING ACTIVITIES		(60,751	)		(14,543)			(137,195	)

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES: Acquisition of BioCube, Inc.		3,287			-			3,287

NET CASH PROVIDED BY INVESTING ACTIVITIES		3,287			-			3,287

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock		-			100			100
Due to related party – current		-				-		17,000
Due to related party – noncurrent		58,260			17,000			120,660
NET CASH PROVIDED BY FINANCING ACTIVITIES		58,260			17,100			137,760

NET CHANGE IN CASH		796			-			3,852
CASH – BEGINNING OF THE PERIOD		3,056			2,557			-
CASH - END OF THE PERIOD	$	3,852		$	2,557		$	3,852

Supplemental cash flow information:

Cash payments for:

Interest

Income taxes

Supplemental disclosure of non-cash investing and financing activities:
Acquisition of BioCube, Inc. for common stock		$	8,750			$	-			$	8,750

See notes to the consolidated financial statements.

Alliance Network Communications Holdings, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

Note 1. Organization

Alliance Network Communications Holdings, Inc. operating through its wholly-owned subsidiaries, Alliance Networks Communications, Inc. (“ANC”) and BioCube, Inc., (collectively the “Company”) is a development stage company. The Company plans to research, design, manufacture, market and distribute a number of generic and custom application electrical surge protection devices and to develop, market and distribute an environmentally safe, decontamination system, utilizing an aerosol-based delivery method.

On August 21, 2009, Alliance Network Communications Holdings, Inc. acquired ANC from its shareholders in exchange for 18,266,667 shares of the Company’s common stock. Simultaneously, the Company sold all of the outstanding shares of the former subsidiary, Halcyon Jets, Inc., to Halcyon Jets Acquisition Group, LLC (“HJAG”), the principal of which is our former Chief Executive Officer. As consideration for the acquisition HJAG:

1.	Provided a promissory note for $100,000, payable 10-years from closing, bearing interest at the rate of 2% per annum;
2.	Assumed all liabilities of the Company and its subsidiary, including the pending litigation, in which the Company was a named party; and
3.	Released the Company of its obligation under his consulting agreement to pay the former CEO $600,000 as a result of the transactions referred to in the Information Statement.

The promissory note is unsecured and there are no guaranties issued with respect to the note. HJAG and Mr. Cohen, personally, have agreed to indemnify the Company with respect to any claims against the former Halcyon Jets subsidiary, including pending litigation.

As a result of the above transactions, the former stockholders of ANC became the controlling stockholders of the Company and the Company discontinued its former business. Accordingly, the transactions were treated for accounting purposes as a reverse acquisition, and the transactions have been accounted for as a recapitalization of the Company, rather than a business combination. Therefore, the historical financial statements of ANC became the historical financial statements of the Company and historical stockholders' equity of ANC was restated to reflect the recapitalization. Pro forma information has not been presented since the transaction was not a business combination. Upon the effectiveness and as a result of these transactions, the Company changed its name to Alliance Network Communications Holdings, Inc and effectuated a reverse stock split in the ratio 1-for-15. All share amounts have been retroactively restated for the split. On September 2, 2009, the Company’s trading symbol was changed to ALHN.

On July 12, 2010, the Company acquired all of the issued and outstanding common stock of BioCube, Inc., a Nevada corporation, from its shareholders in exchange for 8,750,000 shares of the common stock of the Company valued at par of $0.001 per share. As a result of the transaction, BioCube, Inc. has become a wholly-owned subsidiary of the Company. The acquisition was closed based upon a Share Acquisition Agreement dated June 24, 2010 between the Company and BioCube, Inc., filed as Exhibit 10 to the Current Report for the Company filed on July12, 2010.

The allocation of the purchase consideration of $8,750 as follows:

Cash $ 3,287

Decontamination system 27,000

Goodwill 311,304

Accounts payable (56,498)

Accrued interest ( 649)

Due to related parties – current (1,500)

Accrued salaries (264,194)

Alliance Network Communications Holdings, Inc.

Notes to the Consolidated Financial Statements - continued

(unaudited)

Note 1. Organization (continued)

Note payable (10,000)

Total $ 8,750

Note 2. Significant Accounting Policies

Basis of Preparation

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which assume the continuation of the Company as a going concern. This basis of

accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. At October 31, 2010, the Company had an accumulated deficit of $389,488 and working capital deficiency of $492,716 and at January 31, 2010, had an accumulated deficit of $123,990 and working capital deficiency of $25,507. Since its formation in April 2009, ANC, the Company’s principal subsidiary, has been a development stage company and has not begun its efforts to produce and market electrical surge protection devises and its activities, to date, have been organizational in nature, and have been directed towards the raising of capital and to discussions of potential business combinations.

The Company may not be able to execute its current business plan and fund business operations long enough to achieve profitability without obtaining financing. The Company's ultimate success depends upon its ability to raise capital. There can be no assurance that funds will be available to the Company when needed from any source or; if available, on terms that are favorable to the Company. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.

The accompanying, unaudited, consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes required by generally accepted accounting principles for complete financial statement. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of results to be expected for the entire fiscal year or any other period.

The consolidated balance sheet at January 31, 2010 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.

These interim consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes for the period ended January 31, 2010 filed with the Securities and Exchange Commission on Form 10-K on May 17, 2010.

Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, ANC for the nine months ended October 31, 2010 and the accounts of BioCube, Inc. for the period from July12, 2010 (the date of acquisition) to October 31, 2010. All intercompany accounts and transactions have been eliminated in consolidation.

Alliance Network Communications Holdings, Inc.

Notes to the Consolidated Financial Statements - continued

(unaudited)

Note 2. Significant Accounting Policies (continued)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported period. Changes in the economic environment, financial markets, as well as in the healthcare industry and any other parameters used in determining these estimates could cause actual results to differ.

Concentration of Credit Risk

The Company may place its cash with various financial institutions and, at times, cash held in depository accounts at such institutions may exceed the Federal Deposit Insurance Corporation insured limit.

Revenue Recognition

Upon initiation of active operations, the Company will recognize revenues when persuasive evidence of an arrangement exists, product has been delivered or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue will be recognized net of estimated sales returns and allowances.

Income Taxes

The Company accounts for income taxes using a method that requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company’s assets and liabilities (commonly known as the asset and liability method). In assessing the ability to realize deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company evaluates its tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are ‘‘more-likely-than-not’’ of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as an expense in the applicable year. The Company does not have a liability for any unrecognized tax benefits. Management’s evaluation of uncertain tax positions may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof.

As of October 31, 2010 and January 31, 2010, the Company had approximately $565,000 and $300,000 of net operating loss carry-forwards available to affect future taxable income and has established a valuation allowance equal to the tax benefit of the net operating loss carry- forwards and temporary differences as realization of the asset is not assured. Utilization of net operating loss carry-forwards arising from our predecessor company are subject to a substantial annual limitation due to the ‘‘change in ownership’’ provisions of the Internal Revenue Code. The annual limitation may result in the expiration of net operating loss carry-forwards before utilization.

Loss per share

Loss per common share is based upon the weighted average number of common shares outstanding during the periods. Diluted loss per common share is the same as basic loss per share, as the effect of potentially dilutive securities (options – 21,667; warrants – 457,111; and convertible debentures – 2,438,933) are anti-dilutive.

Outstanding options were issued by the Company’s predecessor and are exercisable through 2018 with an exercise price of $5.70. Warrants for 322,111 shares of common stock were issued by our predecessor with

Alliance Network Communications Holdings, Inc.

Notes to the Consolidated Financial Statements - continued

(unaudited)

Note 2. Significant Accounting Policies (continued)

weighted average exercise price of $11.21 and are exercisable through 2014. The balance of the outstanding warrants was issued in connection with the notes payable to a related party (see Note 3). No warrants were redeemed in the nine months ended October 31, 2010.

Reclassifications

Certain prior period amounts were reclassified to conform to the current period classifications.

Fair Value of Financial Instruments

U.S. GAAP for fair value measurements establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The fair value hierarchy gives the highest priority to quoted market prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 inputs are inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses, loan payable – related party and notes payable – related party approximates their fair values because of the short maturity of these instruments.

New Accounting Pronouncements

In February, 2010, the FASB issued Accounting Standards Update No. 2010-09 (“ASU 2010-09”), “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements,” which amount other things amended ASC 855 to remove the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between ASC 855 and the SEC’s requirements. All of the amendments in this update are effective upon issuance of this update. Management has included the provisions of these amendments in the financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Note 3. Related Party Transactions

Due to Related Party – current portion

Due to Related Parties – current portion includes the following:

	October 31, 2010		January 31, 2010
Notes payable - net of discount of $0 and $4,800(1)	$	17,000	$	12,200
Notes payable – BioCube acquisition		11,500		--
Financing fees(2)		6,000		6,000
	$	34,500	$	18,200

Alliance Network Communications Holdings, Inc.

Notes to the Consolidated Financial Statements - continued

(unaudited)

Note 3. Related Party Transactions

(1)During the year ended January 31, 2010, the Company borrowed an aggregate of $17,000 from LeadDog Capital LP through the issuance of notes payable for periods of 1 year each with interest payable at 16% per year. In connection with the issuance of these notes the Company granted the lender warrants to purchase 90,000 shares of the Company’s common stock at $.001. In addition, the Company issued warrants to purchase 45,000 shares of the Company’s common stock at $.001 to LeadDog Capital Markets LLC (the general partner) for due diligence services. LeadDog Capital LP and its affiliates are shareholders and warrant holders; however the group is restricted from becoming a beneficial owner (as such term is defined under Section 13(d) and Rule 13d-3 of the Securities Exchange Act of 1934, as amended, (the 1934 Act)), of the Company’s common stock which would exceed 4.9% of the number of shares of common stock outstanding.

The proceeds from issuance of the promissory notes were allocated to the notes and the warrants based upon their relative fair values. This allocation resulted in allocating $9,500 to the notes and $7,500 to the warrants. The warrants issued for services were recorded as prepaid financing fees of $6,750 and will be amortized to interest expense over the related loan periods. During the three months ended October 31, 2010, the Company recorded expense of $4,800 for the amortization of the debt discount and prepaid financing fees. The fair value of the warrants was determined using the Black-Scholes option pricing model using the following weighted-average assumptions: volatility of 452 % and 457 %; risk-free interest rate of .87% and .94%; expected life of 3 years and estimated dividend yield of 0%.

(2)LeadDog Capital Markets LLC, the general partner of LeadDog Capital LP, is due a fee for due diligence related to the convertible debenture arrangement discussed below. The total fee will be $10,000 and is earned based upon a formula related to the amount of the borrowings incurred.

Due to Related Party – non-current

Due to Related Parties – non-current consists of borrowings under a convertible debenture arrangement. In November 2009, the Company entered into an arrangement with LeadDog Capital LP in which the Company may borrow an aggregate of $500,000 with interest payable at 14% per annum three years from the date of any borrowings. The indebtedness including interest is convertible into common stock at the lesser of $.10 or 75% of the lowest closing bid price during the 15 day period prior to the conversion date but in no event can the conversion price be less than $0.005 The Company accounted for the borrowings under this arrangement in accordance with ASC 480 - “Distinguishing Liabilities from Equity”, as the conversion feature embedded in the debentures could result in the principal being converted to a variable number of the Company's common shares. The fair value of the conversion feature is calculated at the time of issuance and the Company records a conversion liability for the calculated value. The conversion liability is revalued at the end of each reporting period which results in a gain or loss for the change in fair value. During the year ended January 31, 2010, the Company borrowed $62,400 under this arrangement and during the nine months ended October 31, 2010 the Company borrowed an additional $58,260. The Company determined the fair value of the debentures at the dates of issuance to be $212,633 which represented the face value of the debentures plus the fair value of the conversion feature of $91,973. There were no additional borrowings during the quarter ended October 31, 2010.

Acquisition of BioCube, Inc.

On July 12, 2010, the Company acquired all of the outstanding stock of BioCube, Inc. from its then shareholders in exchange for 8,750,000 shares of the Company’s common stock. Boris Rubizhevsky, who was Chairman of BioCube, Inc., and also was, and remains, the Chairman and CEO of the Company, was also a stockholder of BioCube, Inc. and received 6,000,000 shares of the Company in the acquisition.

Alliance Network Communications Holdings, Inc.

Notes to the Consolidated Financial Statements - continued

(unaudited)

Note 3. Related Party Transactions (continued)

As of October 31, 2010 and January 31, 2010, the due to related parties, non-current, consisted of the following:

October 31, 2010 January 31, 2010

Notes payable $ 120,660 $ 62,400

Beneficial conversion feature 80,186 20,800

$ 200,846 $ 83,200

Note 4. Litigation

In September 2008, Jet One Group, Inc. ("Jet One") commenced an action against Halcyon Jets Holdings, Inc., the Company’s predecessor and several of its former officers, directors and employees in the United States District Court, alleging, among other matters, that the Company’s predecessor fraudulently induced Jet One to enter into a Letter of Intent to acquire Jet One's business. The Complaint alleged that the Company violated the federal Racketeering Influenced Corrupt Organizations Act, the federal Computer Fraud and Abuse Act, the New York consumer fraud and Business law statutes and committed various common law torts, and sought compensatory

damages of $15 million and treble or punitive damages of $45 million. On August 14, 2009, the Court dismissed the complaint without prejudice to Jet One's right to re-file the lawsuit.

On or about October 28, 2009, Jet One Group filed a new action against the Company’s predecessor, its former subsidiary and the other defendants in the matter discussed above, in the Supreme Court of New York (“Nassau County Action”), which repeats the factual allegations of the dismissed federal court complaint and asserts claims for conversion, fraud, tortious interference with contract and violation of the state consumer fraud statute. The new complaint seeks compensatory damages of $15 million, attorneys’ fees of $100,000 and punitive damages against each of the defendants in the amount of $45 million. Separately, the former subsidiary filed an action against Jet One and its principals in the Supreme Court of New York in which the former subsidiary alleges that the Complaint in Jet One’s Federal Court Action contains false and defamatory statements regarding the former subsidiary and that Jet One filed its suit for the sole purpose of circulating a press release publicizing the false and defamatory allegations. Jet One moved to dismiss the suit for failure to state a claim upon which relief may be granted, but this motion was denied by the court and the denial was affirmed by the Appellate Division of the Supreme Court of New York in February 2010. On March 19, 2010, the Company’s former subsidiary dismissed its complaint without prejudice.

On March 22, 2010, all the defendants in the Nassau County Action filed a Verified Answer, Counterclaims and Third-Party Complaint denying any liability to Jet One. In addition, the Company and the former subsidiary re-asserted the defamation claims that had previously been asserted against Jet One and its principals in the discontinued case described above; and the Company asserted a breach of contract claim against Jet One and its principals relating to a $150,000 promissory note executed in favor of its predecessor by Jet One and personally guaranteed by Jet One’s principals.

and that one or more of such former employees violated post-employment restrictive covenants by joining the Company. The complaint seeks $7 million in damages. This action is a revival of an earlier action that was voluntarily discontinued by Blue Star in 2007.

Alliance Network Communications Holdings, Inc.

Notes to the Consolidated Financial Statements - continued

(unaudited)

Note 4. Litigation (continued)

The Company and the other defendants, in February 2009, filed a motion to dismiss the counts of the complaint for violation of the federal Computer Fraud and Abuse Act and for civil conspiracy for failure to state a claim upon which relief may be granted.

In February 2009, Blue Star served a second amendment to its complaint which withdrew plaintiff’s claims under the federal Computer Fraud and Abuse Act and added Alfred Palagonia and Apollo Jets as additional defendants. The Company has filed a cross-motion to strike the second amendment on the ground that it was improperly filed or in the alternative to dismiss the certain portions related to the civil conspiracy. On May 20, 2009, the Court dismissed plaintiff’s civil conspiracy claims and ordered plaintiff to file a third amended complaint

In October 2009, the parties entered into a “global stipulation” agreeing to stay all proceedings for 90 days and as of December 15, 2010, there has been no additional activity in this matter.

breach of contract, fraud in the inducement, fraud in the execution, unjust enrichment and conversion. The complaint seeks compensatory damages of $232,500, punitive damages of $5 million and attorneys’ fees and costs. In February 2010, the Company filed a motion to dismiss the action and intends to vigorously defend itself in the event that the motion to dismiss is denied.

Except as set forth above, there are no other pending or threatened legal proceedings against the Company. Based on the advice of counsel, it is management's opinion that we have made adequate provision for potential liabilities, if any, arising from potential claims arising from litigation, governmental investigations, legal and administrative cases and proceedings. In connection with the sale of the Company’s Halcyon Jet subsidiary to the Company’s former Chief Executive Officer the Company was indemnified by the buyer against any liability which may arise from the above litigation.

Note 6. Subsequent Events

In November, 2010, the Company approved a merger of its operating subsidiaries into the Company and the change of the corporate name to BioCube, Inc. Regulatory approval for this transaction and name change is in process, and once, approved, the trading symbol for the Company’s common stock is expected to change.

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION AND CERTAIN CAUTIONARY STATEMENTS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this quarterly report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under ‘‘Risk Factors’’ under Part II. Item 1A.

OVERVIEW

Our discussion and analysis of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates under different assumptions or conditions.

Critical Accounting Policies

As the Company has not begun to execute its business plan we have identified only the following policies as critical to understanding of our financial results for the periods presented.

The consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which assume the continuation of the Company as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. Since the Company‘s formation in April 2009, the Company has not begun its efforts to produce and market electrical surge protection devices and its activities, to date, have been organizational in nature, and have been directed towards the raising of capital and to discussions of potential business combinations.

The Company may not be able to execute its current business plan and fund business operations long enough to achieve profitability without obtaining financing. The Company's ultimate success may depend its ability to raise capital. There can be no assurance that funds will be available to the Company when needed from any source or; if available, on terms that are favorable to the Company. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.

The Company accounted for the borrowings under a convertible debenture arrangement in accordance with ASC 480 - “Distinguishing Liabilities from Equity”, as the conversion feature embedded in the debentures could result in the principal being converted to a variable number of the Company's common shares. The fair value of the conversion feature is calculated at the time of issuance and the Company records a conversion liability for the calculated value. The conversion liability is revalued at the end of each reporting period which results in a gain or loss for the change in fair value.

Business Plan

We are a development stage company which plans to research, design, manufacture, market and distribute a number of generic and custom application electrical surge protection devices as well as an environmentally safe

decontamination system, utilizing an aerosol-based delivery method.

BioCube, Inc. a Nevada corporation, is collaborating with its Russian research partners to complete the development and then commercialization of an environmentally safe decontamination system, utilizing an aerosol-based delivery method. This system has demonstrated effective handling of microbial and fungal cells, spores, and viruses that are the core of such infections as MRSA, Avian Flu, Swine Flu and common molds.

Hospitals struggle with the control of infectious diseases and continue to look for efficacious, environmentally friendly and cost-effective means of dealing with this pervasive problem. BioCube intends to focus on this existing market need for decontamination of patient rooms, operating theaters, medical equipment and furniture, which exists in over 5,000 hospitals and nearly 1 million beds in the U.S. healthcare system, as well as the many other uses of a similar decontamination solution.

BioCube will focus on the following target markets:

-- Healthcare (hospital, nursing homes)

-- Travel (airplanes, cruise ships, mobile homes)

-- Mold remediation

-- Schools

-- Animal farming

-- Agriculture

BioCube believes that its decontamination technology holds significant promise as a long-term solution to a global problem. BioCube's objective is to help create an effective technology that will allow for rapid, inexpensive and environmentally safe remediation of buildings that have been contaminated by a biological agent, thus allowing a speedy return to a state of normalcy.

BioCube has also entered into a licensing agreement with Battelle Memorial Institute of Richland, Washington, to sub-license technology contained in certain rights of Batelle in patents relating to micro-aerosol based decontamination methods, which are complimentary to the technology of BioCube.

Results of Operations

Three and nine months ended October 31, 2010 vs three months ended October 31, 2009 and inception (April 20, 2009) through October 31, 2009

During the periods, the Company had no revenues as its activities principally involved its formation, negotiation of the reverse merger, acquisition of BioCube, Inc., and planning for the execution of its business plan. Expenses incurred during the three months ended October 31, 2010 were general and administrative ($16,722), consulting fees ($11,935), officer salaries ($35,806) to our President and CEO, and professional fees ($6,600). The interest cost relates to notes payable and convertible debentures, net $4,885, and finance costs ($7,528). During the prior year three month period the Company incurred $18,663 in total administrative fees and expenses and $4,615 of net interest expense..

Expenses incurred during the nine months ended October 31, 2010 were general and administrative ($33,449), consulting fees ($75,000), officer salaries ($45,000) to our President and CEO, and professional fees ($29,600). The interest cost relates to notes payable and convertible debentures, net ($11,628), and finance costs ($70,821).

Liquidity and Capital Resources

The Company may not be able to execute its current business plan and fund business operations long enough to achieve profitability without obtaining financing. The Company has received interim financing from a related party. The Company's ultimate success may depend upon its ability to raise capital. There can be no assurance that funds will be available to the Company when needed from any source or; if available, on terms that are favorable to

the Company. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.

The ability of the Company to continue as a going concern is dependent upon developing and initiating its business plan and on obtaining additional capital and financing.

Except as set forth under Part II. Item 1 – Legal Proceedings, there are no pending or threatened legal proceedings against the Company. In the opinion of management, on the advice of counsel, we have made adequate provision for potential liabilities, if any, arising from potential claims arising from litigation, governmental investigations, legal and administrative cases and proceedings. In connection with the sale of the Company’s Halcyon Jet subsidiary to the Company’s former Chief Executive Officer the Company was indemnified by the buyer against any liability which may arise from the above litigation.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. QUALITITATIVE AND QUALITIATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company is in the process of implementing disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’), that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports are recorded, processed, summarized, and reported within the time periods specified in rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our Chief Executive Officer to allow timely decisions regarding required disclosure.

As of October 31, 2010, the Chief Executive and Financial Officer carried out an assessment, of the effectiveness of the design and operation of our disclosure controls and procedure and concluded that the Company’s disclosure controls and procedures were not effective as of October 31, 2010, because of the material weakness described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness identified during management's assessment was the lack of sufficient resources with SEC, generally accepted accounting principles (GAAP) and tax accounting expertise. This control deficiency did not result in adjustments to the Company’s interim financial statements. However, this control deficiency could result in a material misstatement of significant accounts or disclosures that would result in a material misstatement to the Company’s interim or annual financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

The Chief Executive and Financial Officer performed additional accounting and financial analyses and other post-closing procedures including detailed validation work with regard to balance sheet account balances, additional analysis on income statement amounts and managerial review of all significant account balances and disclosures in the Quarterly Report on Form 10-Q, to ensure that the Company’s Quarterly Report and the financial statements

forming part thereof are in accordance with accounting principles generally accepted in the United States of America. Accordingly, management believes that the financial statements included in this Quarterly Report fairly present, in all material respects, the Company’s financial condition, results of operations, and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

During the three and nine months ended October 31, 2010 there were no changes in our system of internal controls over financial reporting. In July, 2010, the Company changed its Chief Financial Officer and as previously reported, changed its auditors.

PART II — OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

In September 2008, Jet One Group, Inc. ("Jet One") commenced an action against Halcyon Jets Holdings, Inc., the Company’s predecessor and several of its former officers, directors and employees in the United States District Court, alleging, among other matters, that the Company’s predecessor fraudulently induced Jet One to enter into a Letter of Intent to acquire Jet One's business. The Complaint alleged that the Company violated the federal Racketeering Influenced Corrupt Organizations Act, the federal Computer Fraud and Abuse Act, the New York consumer fraud and business law statutes and committed various common law torts, and sought compensatory damages of $15 million and treble or punitive damages of $45million. On August 14, 2009, the Court dismissed the complaint without prejudice to Jet One's right to re-file the lawsuit.

On or about October 28, 2009, Jet One Group filed a new action against the Company’s predecessor, its former subsidiary and the other defendants in the matter discussed above, in the Supreme Court of New York (“Nassau County Action”), which repeats the factual allegations of the dismissed federal court complaint and asserts claims for conversion, fraud, tortuous interference with contract and violation of the state consumer fraud statute. The new complaint seeks compensatory damages of $15 million, attorneys’ fees of $100,000 and punitive damages against each of the defendants in the amount of $45 million. Separately, the former subsidiary filed an action against Jet One and its principals in the Supreme Court of New York in which the former subsidiary alleges that the Complaint in Jet One’s Federal Court Action contains false and defamatory statements regarding the former subsidiary and that Jet One filed its suit for the sole purpose of circulating a press release publicizing the false and defamatory allegations. Jet One moved to dismiss the suit for failure to state a claim upon which relief may be granted, but this motion was denied by the court and the denial was affirmed by the Appellate Division of the Supreme Court of New York in February 2010. On March 19, 2010, the Company’s former subsidiary dismissed its complaint without prejudice.

In October and December 2008, Blue Star Jets, LLC (“Blue Star”) filed a complaint against the Company and certain former employees, including our former President, who were former employees of Blue Star (“former Blue Star employee”) in the Supreme Court of New York, New York County alleging, among other matters, that the Blue Star’s former employees stole confidential information belonging to Blue Star prior to joining the Company and that one or more of such former employees violated post-employment restrictive covenants by joining the Company. The complaint seeks $7 million in damages. This action is a revival of an earlier action that was voluntarily discontinued by Blue Star in 2007.

On or about October 23, 2009, Mitchell Blatt, a former Chairman of the Board and Chief Executive Officer of Company’s predecessor, commenced an action against the Company’s predecessor, its former subsidiary and the Company relating to alleged breach of an agreement between and among the Company’s predecessor, its former subsidiary and Mr. Blatt dated as of August 12, 2008. In his complaint, Mr. Blatt has alleged causes of action for breach of contract, fraud in the inducement, fraud in the execution, unjust enrichment and conversion. The complaint seeks compensatory damages of $232,500, punitive damages of $5 million and attorneys’ fees and costs. In February 2010, the Company filed a motion to dismiss the action and intends to vigorously defend itself in the event that the motion to dismiss is denied. There has been no further activity in this matter as of December 15, 2010.

Item 1A.

Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the quarter ended October 31, 2010, we issued no shares of our common stock.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. REMOVED AND RESERVED

Item 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibits

31	Certification of Chief Executive and Financial Officer


32	Section 1350 Certification of Chief Executive and Financial Officer

SIGNATURES

Pursuant to the requirements 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.

	ALLIANCE NETWORK COMMUNICATIONS HOLDINGS, INC.

Date: December 20, 2010	/s/ Boris Rubizhevsky
	Boris Rubizhevsky Chief Executive and Financial Officer
	17

BioCube, INC. - FORM 10-Q - December 20, 2010

Attached files

BioCube, INC. Reports