1.
 
 UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 ____________________
 FORM
10-Q
 ____________________
  (Mark
One)
 x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 For
the quarterly period ended April 30, 2009
 
 o  TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT
 
 For the
transition period from ___________ to ____________
 ____________________
 
 Commission
File No.
 000-25809
 ____________________
 
 Apollo
Medical Holdings, Inc.
 (Name of
small business issuer as specified in its charter)
 
 
 Delaware
                
                20-8046599State
      of Incorporation
                
                IRS
      Employer Identification No.1010
      N. Central AvenueGlendale,
      California 91202(Address
      of principal executive offices)(818)
      507-4617(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 o                      No
x
 
 Indicate
by check mark whether the registrant is a large accelerated filer o, an accelerated filer
o, a
non-accelerated filer o, or a smaller reporting
company x.
 
 1
  APOLLO
MEDICAL HOLDINGS, INC.
 INDEX
TO FORM 10-Q FILING
 FOR
THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 
 TABLE
OF CONTENTS
 
 
 PART
      IFINANCIAL
      INFORMATION
                                        PAGEItem   1.
                                        Financial
      Statements - UnauditedCondensed
      Consolidated Balance Sheet As of April 30, 2009 and January 31, 2009 and
      January 31, 2009
                                        3Condensed
      Consolidated Statements of Operations For the Three months ended April 30,
      2009 and 2008
                                        4Condensed
      Consolidated Statements of Cash Flows For the Three months endedApril
      30, 2009 and 2008
                                        5Notes
      to Condensed Consolidated Financial Statements
                                        6-16Item
      2.
                                        Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                        16Item
      3.
                                        Quantitative
      and Qualitative Disclosures about Market Risk
                                        17Item
      4.
                                        Control
      and Procedures.
                                        18PART
      II
                                          OTHER
      INFORMATIONItem
      1.
                                        Legal
      Proceedings
                                        19Item
      2.
                                        Unregistered
      Sales of Equity Securities and the Use of Proceeds
                                        19Item
      3.
                                        Defaults
      upon Senior Securities
                                        19Item
      4.
                                        Submission
      of Matters to a Vote of Security Holders
                                        19Item
      5.
                                        Other
      Information
                                        19Item
      6.
                                        Exhibits
                                        19
  2
 PART 1 -
FINANCIAL INFORMATION
 ITEM 1 -
FINANCIAL STATEMENTS
 
 APOLLO
      MEDICAL HOLDINGS, INC.CONSOLIDATED
      BALANCE SHEETS(UNAUDITED)
  April
      30,
                                
                                
                                January
      31,2009
                                
                                
                                2009ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                                
                                $
                                59,220
                                
                                
                                $
                                84,161Accounts
      receivable, net
                                
                                
                                269,248
                                
                                
                                
                                255,665Due
      from affiliate
                                
                                
                                2,050
                                
                                
                                
                                2,050Prepaid
      expenses
                                
                                
                                17,963
                                
                                
                                
                                25,025Total
      current assets
                                
                                
                                348,481
                                
                                
                                
                                366,901Property
      and equipment - net
                                
                                
                                36,992
                                
                                
                                
                                47,330TOTAL
      ASSETS
                                
                                $
                                385,474
                                
                                
                                $
                                414,232LIABILITIES
      AND STOCKHOLDERS DEFICIT:CURRENT
      LIABILITIES:Accounts
      payable and accrued liabilities
                                
                                $
                                56,280
                                
                                
                                $
                                65,141Shares
      to be issued
                                
                                
                                378,500
                                
                                
                                
                                284,000Convertible
      notes payable
                                
                                
                                10,000
                                
                                
                                
                                10,000Convertible
      notes payable-related party
                                
                                
                                23,000
                                
                                
                                
                                23,000Current
      portion of loan
                                
                                
                                46,081
                                
                                
                                
                                41,782Total
      current liabilities
                                
                                
                                513,862
                                
                                
                                
                                423,923Loan
                                
                                
                                144,442
                                
                                
                                
                                156,218Convertible
      notes payable-related party
                                
                                
                                75,000
                                
                                
                                
                                75,000Total
      liabilities
                                
                                
                                733,304
                                
                                
                                
                                655,141STOCKHOLDERS'
      EQUITY/(DEFICIT):Preferred
      stock, par value $.001 and $0.0001 per share; 5,000,000
and25,000,000
      shares authorized, respectively; none issued
                                
                                
                                -
                                
                                
                                
                                -Common
      Stock, par value $.001 and $0.0001, 100,000,000 shares
      authorized,25,870,220
      shares issued and outstanding
                                
                                
                                25,870
                                
                                
                                
                                25,870Non-controlling
      interest
                                
                                
                                228,115
                                
                                
                                
                                228,115Additional
      paid-in-capital
                                
                                
                                550,058
                                
                                
                                
                                550,058Accumulated
      deficit
                                
                                
                                (1,151,873
                                )
                                
                                
                                (1,044,951
                                )Total
      stockholders' deficit
                                
                                
                                (347,830
                                )
                                
                                
                                (240,909
                                )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                                
                                $
                                385,474
                                
                                
                                $
                                414,232The
      accompanying notes are an integral part of these consolidated financial
      statements
  3
 
 APOLLO MEDICAL HOLDINGS, INC.CONSOLIDATED
      STATEMENTS OF OPERATIONSFOR
      THE THREE MONTHS ENDING APRIL 30, 2009 AND 2008(UNADITED)
  For
      the three months endedApril
      30,2009
                                      
                                      
                                      2008REVENUES
                                      
                                      $
                                      501,183
                                      
                                      
                                      $
                                      10,000Operating
      expenses:Cost
      of services - physician practice salaries, benefits and
    other
                                      
                                      
                                      419,554
                                      
                                      
                                      
                                      -General
      and administrative
                                      
                                      
                                      172,562
                                      
                                      
                                      
                                      83,134Depreciation
                                      
                                      
                                      10,338
                                      
                                      
                                      
                                      -Total
      operating expenses
                                      
                                      
                                      602,455
                                      
                                      
                                      
                                      83,134LOSS
      FROM OPERATIONS
                                      
                                      
                                      (101,272
                                      )
                                      
                                      
                                      (73,134
                                      )OTHER  EXPENSES:Interest
      expense
                                      
                                      
                                      4,849
                                      
                                      
                                      
                                      -NET
      LOSS BEFORE INCOME TAXES
                                      
                                      
                                      (106,121
                                      )
                                      
                                      
                                      (73,134
                                      )Provision
      for Income Tax
                                      
                                      
                                      800
                                      
                                      
                                      
                                      -NET
      LOSS
                                      
                                      $
                                      (106,921
                                      )
                                      
                                      $
                                      (73,134
                                      )Net
      income attributable to noncontrolling interest
                                      
                                      
                                      13,492
                                      
                                      
                                      
                                      -Net
      loss attributable to Apollo Medical Holding, Inc.
                                      
                                      $
                                      (120,413
                                      )
                                      
                                      $
                                      (73,134
                                      )WEIGHTED
      AVERAGE SHARES OF COMMON STOCK OUTSTANDING,BASIC
      AND DILUTED
                                      
                                      
                                      25,870,220
                                      
                                      
                                      
                                      20,933,490*BASIC
      AND DILUTED NET LOSS PER SHARE
                                      
                                      
                                      (0.00
                                      )
                                      
                                      
                                      (0.00
                                      )*Weighted
      average number of shares used to compute basic and diluted loss per share
      is the samesince
      the effect of dilutive securities is anti-dilutive.The
      accompanying notes are an integral part of these consolidated financial
      statements
  4
 
 APOLLO
      MEDICAL HOLDINGS, INC.CONSOLIDATED
      STATEMENTS OF CASH FLOWSFOR
      THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008(UNAUDITED)
  Three
      months ended April 30,2009
                                                                                                
                                                                                                
                                                                                                2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Adjustments
      to reconcile net loss to net cash(used
      in) operating activities:Net
      loss
                                                                                                
                                                                                                $
                                                                                                (106,921
                                                                                                )
                                                                                                
                                                                                                $
                                                                                                (73,134
                                                                                                )Depreciation
                                                                                                
                                                                                                
                                                                                                10,338
                                                                                                
                                                                                                
                                                                                                
                                                                                                -Bad
      debt expense
                                                                                                
                                                                                                
                                                                                                462
                                                                                                
                                                                                                
                                                                                                
                                                                                                -Shares
      to be issued for services
                                                                                                
                                                                                                
                                                                                                94,500
                                                                                                
                                                                                                
                                                                                                
                                                                                                -Changes
      in assets and liabilities:Accounts
      receivable
                                                                                                
                                                                                                
                                                                                                (14,045
                                                                                                )
                                                                                                
                                                                                                
                                                                                                -Prepaid
      expenses
                                                                                                
                                                                                                
                                                                                                7,062
                                                                                                
                                                                                                
                                                                                                
                                                                                                -Due
      from related party
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,600Accounts
      payable and accrued liabilities
                                                                                                
                                                                                                
                                                                                                (8,860
                                                                                                )
                                                                                                
                                                                                                
                                                                                                53Net
      cash used in operating activities
                                                                                                
                                                                                                
                                                                                                (17,465
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (71,481
                                                                                                )CASH
      FLOWS FROM INVESTING ACTIVITIES:Property
      and Equipment
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -CASH
      FLOWS FROM FINANCING ACTIVITIES:Payments
      of notes payable
                                                                                                
                                                                                                
                                                                                                (7,477
                                                                                                )
                                                                                                
                                                                                                
                                                                                                -Proceeds
      from issuance of common stock for cash
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                305,000Net
      cash (used in) provided by financing activities
                                                                                                
                                                                                                
                                                                                                (7,477
                                                                                                )
                                                                                                
                                                                                                
                                                                                                305,000NET
      INCREASE IN CASH & CASH EQUIVALENTS
                                                                                                
                                                                                                
                                                                                                (24,941
                                                                                                )
                                                                                                
                                                                                                
                                                                                                233,519CASH
      & CASH EQUIVALENTS, BEGINNING BALANCE
                                                                                                
                                                                                                
                                                                                                84,161
                                                                                                
                                                                                                
                                                                                                
                                                                                                44,352CASH
      & CASH EQUIVALENTS, ENDING BALANCE
                                                                                                
                                                                                                $
                                                                                                59,220
                                                                                                
                                                                                                
                                                                                                $
                                                                                                277,871SUPPLEMENTARY
      DISCLOSURES OF CASH FLOW INFORMATIONInterest
      paid during the quarter
                                                                                                
                                                                                                $
                                                                                                2,582
                                                                                                
                                                                                                
                                                                                                $
                                                                                                -Taxes
      paid during the quarter
                                                                                                
                                                                                                $
                                                                                                1,600
                                                                                                
                                                                                                
                                                                                                $
                                                                                                -
  The
accompanying notes are an integral part of these consolidated financial
statements
  5
 APOLLO
MEDICAL HOLDINGS, INC.
 (FORMERLY
SICLONE INDUSTRIES, INC.)
 NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 
 1.
                Description
      of Business
 
 
 Apollo
Medical Holdings, Inc. operates as a medical management holding company that
focuses on managing the provision of hospital-based medicine through a wholly
owned subsidiary-management company, Apollo Medical Management, Inc. (“AMM”).
Through AMM, the Company manages an affiliated medical group, which presently
consists of ApolloMed Hospitalists (“AMH”).  AMM operates as a
Physician Practice Management Company (PPM) and is in the business of providing
management services to Physician Practice Companies (PPC) under Management
Service Agreements.
 
 On June
13, 2008, Siclone Industries, Inc. (“Siclone”), Apollo Acquisition Co., Inc., a
wholly owned subsidiary of Siclone (“Acquisition”), Apollo Medical Management,
Inc. (“Apollo Medical”) and the shareholders of Apollo Medical entered into an
agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms of
the Merger Agreement, Apollo Medical merged with and into Acquisition. The
former shareholders of Apollo Medical received 20,933,490 shares of Siclone’s
common stock in exchange for all the issued and outstanding shares of Apollo
Medical.
 
 The
acquisition of Apollo Medical is accounted for as a reverse acquisition under
the purchase method of accounting since the shareholders of Apollo Medical
obtained control of the consolidated entity. Accordingly,
the reorganization of the two companies is recorded as a recapitalization
of Apollo Medical, with Apollo Medical being treated as the continuing operating
entity. The historical financial statements presented herein will be those of
Apollo Medical. The continuing entity retained January 31 as its fiscal year
end. The financial statements of the legal acquirer are not significant;
therefore, no pro forma financial information is submitted.
  On July
1, 2008, the continuing entity (i.e., the combined entity of Acquisition and
Apollo Medical) changed its name to Apollo Medical Management, Inc.
(AMM).  On July 3, 2008, Siclone changed its name to Apollo Medical
Holdings, Inc.   Following the merger, the Company is
headquartered in Glendale, California.
  On August
1, 2008, AMM completed negotiations and executed a formal Management Services
Agreement with ApolloMed Hospitalists (“AMH”), under which AMM will provide
management services to AMH.  The Agreement is effective as of August
1, 2008 and will allow AMM, which operates as a Physician Practice Management
Company, to consolidate AMH, which operates as a Physician Practice, in
accordance with EITF 97-2, Application of FASB Statement No. 94 and APB Opinion
No. 16 to Physician Management Entities and Certain Other Entities with
Contractual Management Agreements. The Management Services Agreement was amended
on March 20, 2009, to allow for the calculation of the fee on a monthly basis
with payment of the calculated fee each month.  AMH is controlled by
Dr. Hosseinion and Dr. Vazquez, the Company’s Chief Executive Officer and
President, respectively.
 
 2.
                Summary
      of Significant Accounting
Policies
 
 Basis
of Presentation
 
 6
 The
accompanying unaudited condensed consolidated financial statements have been
prepared by Apollo in accordance with U.S. generally accepted accounting
principles for interim financial statements.  The statements consist
solely of the management company, Apollo Medical Holdings, Inc. prior to August
1, 2008.  Commencing with the Company’s third quarter on August 1,
2008, and concurrent with the execution of the Management Services Agreement,
the statements reflect the consolidation of AMM and AMH , in accordance with
EITF 97-2, Application of FASB Statement No. 94 and APB Opinion No. 16 to
Physician Management Entities and Certain Other Entities with Contractual
Management Agreements . In management’s opinion, all adjustments, consisting of
normal recurring adjustments necessary for the fair presentation of the results
of the interim periods are reflected herein. Operating results for the three
month period ended April 30, 2009 are not necessarily indicative of future
financial results.
 
  The
condensed consolidated financial statements and notes are presented as permitted
by Form 10-Q and do not contain all of the information that is included in the
annual financial statements and notes of the Company. The condensed consolidated
financial statements and notes presented herein should be read in conjunction
with the financial statements and notes included in the Company’s Annual Report
on Form 10-K for the year ended January 31, 2009
 
 
 Use
of Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles 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.
 
 Fair
Value of Financial Instruments
 
  Statement
of financial accounting standard No. 107, Disclosures about fair value of
financial instruments, requires that the Company disclose estimated fair values
of financial instruments. The carrying amounts reported in the statements of
financial position for assets and liabilities qualifying as financial
instruments are a reasonable estimate of fair value.
 
  Credit
and Supply Risk
 
 The
Company’s case rate and capitation revenues, reported by Apollo’s affiliate,
AMH, are governed by contractual agreements with medical groups/IPA’s and
hospitals.  As a result, receivables from this business are generally
fully collected. The Company does face issues related to the timing of these
collections, and the Company must assess the level of earned but uncollected
revenue to which it is entitled at each period end. The Company does face
collection issues with regard to its fee-for-service revenues. One is the
estimation of the amount to be received from each billing since the Company
invoices on a Medicare schedule and each of many providers remits payment on a
reduced schedule.  The Company has to estimate the amount it will
ultimately receive form each billing and properly record revenue. With a wide
variety of contract terms and providers, the Company’s revenue is not
concentrated or dependent on a specific contract.  No individual
contract with our clients provides more than 20 percent of reported
revenues.
 
 7
  Recently
Issued Accounting Pronouncements
 
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” This Statement identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). This Statement will not have an impact
on the Company’s financial statements.
 
 In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts, an interpretation of FASB Statement No. 60.” The scope of
this Statement is limited to financial guarantee insurance (and reinsurance)
contracts, as described in this Statement, issued by enterprises included within
the scope of Statement 60. Accordingly, this Statement does not apply to
financial guarantee contracts issued by enterprises excluded from the scope of
Statement 60 or to some insurance contracts that seem similar to financial
guarantee insurance contracts issued by insurance enterprises (such as mortgage
guaranty insurance or credit insurance on trade receivables). This Statement
also does not apply to financial guarantee insurance contracts that are
derivative instruments included within the scope of FASB Statement No. 133,
“Accounting for Derivative Instruments and Hedging Activities.” This Statement
will not have an impact on the Company’s financial statements.
 
  In April 2009, the FASB issued FSP No. FAS 157-4,
“Determining Fair Values When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly.”  This FSPprovides guidance on
(1) estimating the fair value of an asset or liability when the volume and
level of activity for the asset or liability have significantly declined and
(2) identifying transactions that are not orderly. The FSP also amends
certain disclosure provisions of SFAS No. 157 to require, among other
things, disclosures in interim periods of the inputs and valuation techniques
used to measure fair value. This pronouncement is effective prospectively
beginning April 1, 2009. The Company is currently evaluating the impact of
this standard, but would not expect it to have a material impact on the
Company’s consolidated results of operations or financial
condition.
   In
April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2,
“Recognition and Presentation of Other-Than-Temporary Impairments” (FSP 115-2).
This FSP modifies the requirements for recognizing other-than-temporarily
impaired debt securities and changes the existing impairment model for such
securities. The FSP also requires additional disclosures for both annual and
interim periods with respect to both debt and equity securities. Under the FSP,
impairment of debt securities will be considered other-than-temporary if an
entity (1) intends to sell the security, (2) more likely than not will
be required to sell the security before recovering its cost, or (3) does
not expect to recover the security’s entire amortized cost basis (even if the
entity does not intend to sell). The FSP further indicates that, depending on
which of the above factor(s) causes the impairment to be considered
other-than-temporary, (1) the entire shortfall of the security’s fair value
versus its amortized cost basis or (2) only the credit loss portion would
be recognized in earnings while the remaining shortfall (if any) would be
recorded in other comprehensive income. FSP 115-2 requires entities to initially
apply the provisions of the standard to previously other-than-temporarily
impaired debt securities existing as of the date of initial adoption by making a
cumulative-effect adjustment to the opening balance of retained earnings in the
period of adoption. The cumulative-effect adjustment potentially reclassifies
the noncredit portion of a previously other-than-temporarily impaired debt
security held as of the date of initial adoption from retained earnings to
accumulated other comprehensive income. This pronouncement is effective
April 1, 2009. The Company does not believe this standard will have a
material impact on the Company’s consolidated results of operations or financial
condition.
  8
 
  In
April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, “Interim
Disclosures about Fair Value of Financial Instruments.” This FSP essentially
expands the disclosure about fair value of financial instruments that were
previously required only annually to also be required for interim period
reporting. In addition, the FSP requires certain additional disclosures
regarding the methods and significant assumptions used to estimate the fair
value of financial instruments. These additional disclosures will be required
beginning with the quarter ending June 30, 2009. The Company is currently
evaluating the requirements of these additional disclosures.
  
 
 Stock-based
compensation
 
 On
October 17, 2006 the Company adopted SFAS No. 123R, “Share-Based Payment, an
Amendment of FASB Statement No. 123.” As of the date of this report the Company
has no stock based incentive plan in effect.
  Basic
and Diluted Earnings Per Share
 
 Earnings
per share is calculated in accordance with the Statement of financial accounting
standards No. 128 (SFAS No. 128), “Earnings per share”. SFAS No. 128 superseded
Accounting Principles Board Opinion No.15 (APB 15). Net income (loss) per share
for all periods presented has been restated to reflect the adoption of SFAS No.
128. Basic net income per share is based upon the weighted average number of
common shares outstanding. Diluted net income (loss) per share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised. Dilution is computed by applying the treasury stock method. Under
this method, options and warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period.
  Cash
and Cash Equivalents
  Cash and
cash equivalents include cash in bank representing Company’s current operating
account
  
  Revenue
Recognition
  The
Company recognizes Case Rate and Capitation revenue when persuasive evidence of
an arrangement exists, service has been rendered, the sales price is fixed or
determinable, and collection is reasonable assured.  Fee for Service
revenues are recorded at amounts reasonably assured to be collected. The
determination of reasonably assured collections is based on historical Fee for
Service collections as a percent of billings. The provisions are adjusted to
reflect actual collections in subsequent periods.
  The
estimation and the reporting of patient responsibility revenues is highly
subjective and depends on the payer mix, contractual reimbursement rates,
collection experiences, judgment and other factors.  The Company’s fee
arrangements are with various payers, including managed care organizations,
hospitals, insurance companies, individuals, Medicare and Medicaid.
  9
  3.  Uncertainty
of ability to continue as a going concern
  The
Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has an accumulated deficit
of  $1,151,873 as of April 30, 2009.  Cash Flows used in
Operating Activities for the three months ended April 30, 2009 was
$17,464.
  The
financial statements do not include any adjustments relating to the
recoverability and classification     of liabilities
that might be necessary should the Company be unable to continue as a going
concern.
  The
Company’s need for working capital is a key issue for management and necessary
for the Company to meet its goals and objectives. The Company is actively
pursuing additional capitalization opportunities. Management believes that the
above actions will allow the Company to continue operations through the next
fiscal year.
 
  4.  Accounts
Receivable
 
 Accounts
Receivable is stated at the amount management expects to collect from
outstanding balances. An allowance for doubtful accounts is provided for those
accounts receivable considered to be uncollectible, based upon historical
experience and management's evaluation of outstanding accounts receivable at
each quarter end. As of April 30, 2009, Accounts Receivable totals $269,248, net
of a provision for bad debt expense of $11,927, and represents amounts invoiced
by AMH. Accounts receivable was $255,665, net of the provision for bad debt
expense of $11,465, on January 31, 2009.
 
 5.  Due
from affiliate
 
 Due from
affiliate totals $2,050 and represents amounts due from AMA, an unconsolidated
Affiliate of the Company as of April 30, 2009 and January 31, 2009.
..
 
 6.  Prepaid
expenses
 
 Prepaid
expenses of $17,963 and $25,025 as of April 30, 2009 and January 31, 2009,
respectively, are amounts prepaid for medical malpractice insurance and
Director’s and Officer’s insurance.
 
 7.  Property
and Equipment
  Property
and Equipment consists of the following as of :
 
 10
 
 April
      30, 2009
                          
                          
                          January
      31, 2009Computers
                          
                          $
                          13,912
                          
                          
                          $
                          13,912Software
                          
                          
                          138,443
                          
                          
                          
                          138,443Machinery
      and equipment
                          
                          
                          50,815
                          
                          
                          
                          50,815Gross
      Property and Equipment
                          
                          
                          203,170
                          
                          
                          
                          203,170Less
      accumulated depreciation
                          
                          
                          (166,178
                          )
                          
                          
                          (155,840
                          )Net
      Property and Equipment
                          
                          $
                          36,992
                          
                          
                          $
                          47,330
 
 Depreciation
expense was $10,337 and $0 for the three month periods ended April 30, 2009 and
2008, respectively.
   8.  Accounts
Payable and Accrued Liabilities
  Accounts
payable and accrued liabilities consist of the following as of:
 
 
 April
      30, 2009
                      
                      
                      January
      31, 2009Accounts
      payable
                      
                      $
                      30,599
                      
                      
                      $
                      30,599Accrued
      interest
                      
                      
                      2,776
                      
                      
                      
                      507Accrued
      professional fees
                      
                      
                      16,000
                      
                      
                      
                      20,267Accrued
      payroll and income taxes
                      
                      
                      8,905
                      
                      
                      
                      13,768Total
                      
                      $
                      56,280
                      
                      
                      $
                      65,141
 
 
 9.  Shares
to be Issued
 
 Shares to
be issued consist of the following:
 
 April
      30, 2009
                            
                            
                            January
      31, 2009Accrued
      shares to be issued for note conversion
                            
                            $
                            200,000
                            
                            
                            $
                            200,000Accrued
      shares to be issued for services
                            
                            
                            178,500
                            
                            
                            
                            84,000Total
                            
                            $
                            378,500
                            
                            
                            $
                            284,000
 
 11
 
 As of
April 30, 2009, 266,667 shares were not yet issued for note conversions and
661,111 shares are to be issued for the services rendered through April 30,
2009.
 
  
 10.  Convertible
Notes Payable
 
 During
the year ended January 31, 2009, the Company received $210,000 proceeds from the
issuance of convertible notes payable.  The convertible notes bear
interest at 10% and are due twelve months from the date of issuance ranging from
October 7, 2008 to December 12, 2008. In connection with the convertible notes,
the Company issued 140,000 warrants to the note holders with an exercise price
of $1.50.  There were no issuances of Convertible Notes, or attached
warrants, in the first quarter of 2009.
 
 The
      Company recorded value of warrants using the Black Scholes pricing model
      using the following   assumptions: Stock price $0.27,
      Expected life of 3 years, Risk free bond rate of 1.05% to 2.00%
      and  volatility of 44% to 61%. Based on the assumptions used the
      Company recorded the fair value of warrants  amounting to $379
      which was fully amortized as interest expense during year ended January
      31, 2009.
 
 As of
January 31, 2009, the Company received the conversion notice from the note
holders to convert $200,000 of notes into shares of the Company’s common stock.
This amount is included in the Shares to be Issued Liabilities  and
the remaining $10,000 is shown as Convertible Notes payable on the accompanying
financial statements.
 
 The
Company recorded  interest expense  of $2,268, related to
Convertible Notes in the quarter ended April 30, 2009 and zero for April 30,
2008.
 
 11.  Convertible
Notes Payable-Related Party
 
 During
the year ended January 31, 2008, the Company received $23,000 proceeds from the
issuance of convertible notes payable to relatives of the CEO of the Company.
The convertible notes bear interest at 10% and are due twelve months from
December 25, 2008. In connection with the convertible notes, the Company issued
15,333 warrants to the note holders with an exercise price of $1.50. The Company
recorded value of warrants of $ 68 using the Black Scholes pricing model using
the following assumptions: Stock price $0.27, Expected life of 3 years, Risk
free bond rate of 1.14% and volatility of 49%.
 
 The
Company received $70,000 proceeds from the issuance of notes payable to the
father of the Company’s CEO. The note was due and payable in full no later than
October 1, 2008, carried no interest rate, and the Company was obligated to pay
an origination fee of $5,000 at the time of payoff.  The note was
extended by verbal agreement on its expiration date with no change in terms. On
January 24, 2009, the Company formalized the note extension with the father of
the Company’s CEO.  Under the terms of the new note, the $5,000
origination fee was added to the note, the due date was extended to March 31,
2011, the interest rate was set at eight 8% and the note is initially
convertible into 214,285 shares of common stock.  The Company has the
right to redeem the note at a 105 percent premium any time prior to the due date
on March 31, 2011.
 
 12
 
 
 
 12.  Notes
payable
 
 There
were no additions to Notes Payable in the quarter ended April 30 ,
2009.
 
 During
the year ended January 31, 2009, the Company borrowed $125,000 on June 13, 2008
from a non-related party.  The note bears no interest rate and was due
and payable in full on July 2, 2008.  The note was paid off as of
October 31, 2008.  The Company recorded a penalty of $6,250 during the
nine months ended October 31, 2008 due to late payment.
 
 Also,
during the third quarter, the Company borrowed $125,000 on September 24, 2008
under a note. This note bore an interest rate of 15 percent and was due and
payable in full on October 22, 2008.  The note obligated the Company
for an origination fee of $10,000 and reimbursement of legal fees totaling
$1,500 and issuance of 50,000 shares of the Company’s common stock. The note,
along with the origination fee and legal reimbursement, was paid off in full on
October 20, 2008.
 
 
 13.  Related
Party Transactions
  During
the three months ended April 30, 2009 and 2008, the Company generated revenue of
$56,491 and $10,000, respectively, by providing management services to ApolloMed
Hospitalists (AMH), an affiliated company with common ownership interest.
Commencing August 1, 2008, the management services fee income reported by AMM
was eliminated in consolidation against similar costs recorded at
AMH.
  The
Company borrowed $70,000 on a short-term promissory note in the quarter ended
July 2008 from a related party of the Chief Executive officer of the
Company.   The $70,000 note was due and payable in full no later than
October 1, 2008, carries no interest rate, and the Company was obligated to pay
an origination fee of $5,000 at the time of payoff.  The note was
extended by verbal agreement on its expiration date with no change in terms. On
January 24, 2009, the Company formalized the note extension.  Under
the terms of the new note, the $5,000 origination fee was added to the note, the
due date was extended to March 31, 2011, the interest rate was set at eight (8)
percent and the note is initially convertible  into 214,285 shares of
common stock.  The Company has the right to redeem the note at a 105
percent premium prior to March 31, 2011. (Note 11)
 
 
 Also,
during the fourth quarter 2009, the Company issued Convertible Notes in amounts
aggregating to $23,000 to two relatives of Warren Hosseinion, the Company’s CEO
(Note 11).
 
 14.  Loan
 
 13
  The
Company, through AMH, has a SBA line of credit with Wells Fargo Bank. The loan
was established on January 5, 2006, provided a total available credit of
$200,000 and had a final maturity date of February 10, 2009.  The
interest rate is the bank’s prime rate plus 2. The loan is collateralized
by all machinery, equipment, furniture, accounts, inventory and general
intangibles of AMH and personally guaranteed by the CEO of the
Company.
 
 On
February 3, 2009, the Company’s SBA line of credit with Wells Fargo Bank was, by
mutual agreement, converted into a four-year fully amortizable loan. The credit
line was reduced to $198,000. The interest rate remained at the bank’s prime
rate 5.25%  plus 2 percentage points and the maturity date was
extended to February 10, 2013 and all collateral and guarantor remained
unchanged.
 
 As of
April 30, 2009, the outstanding balance against this facility was $190,523, with
$46,081 in current portion. Interest expense of $2,582 related to the SBA loan
was recorded during the quarter ended April 30, 2009.
 
 The
Company also has an overdraft facility with Wells Fargo Bank. This facility is
attached to the AMH bank account and provides up to $70,000 of overdraft and
short-term borrowing capacity. Draws under the facility carry an 8 percent
interest rate.  The Company has not utilized this
facility.
 
 15.  Non-Controlling  Interest
  The
Company recorded AMH ownership interest in the accompanied financial statements
as Non-Controlling Interest amounting to $228,115 during the year ended January
31, 2009. No addition has been recorded during the quarter ended April 30,
2009.
  16.
Stockholder’s Equity
 
 The
Company did not issue any shares or warrants in the quarter ended April 30,
2009.
 
  During
the period from February 1, 2007 to July 31, 2007, Apollo Medical issued 364,000
shares to investors for a total cash value $182,000. As part of issuance of
shares for cash the Company granted 91,000 stock warrants to investors. During
the period from February 1, 2008 to July 31, 2008, Apollo Medical issued 670,000
shares to investors for a total cash value $335,000. As part of issuance of
shares for cash the Company granted 167,500 stock warrants to
investors.
  As the
result of the merger on June 13, 2008, the former shareholders of Apollo Medical
received 20,933,490 shares of the Company’s common stock in exchange for all the
issued and outstanding shares of Apollo Medical. Certain former shareholders of
Apollo Medical received 470,470 warrants in exchange for warrants granted to
them in previous fund raising.
 
 During
the three month period ended October 31, 2008, the Company issued 268,687 shares
for legal, accounting and investment advisory services provided to the Company.
The Company also issued 50,000 shares as financing fee on a note
payable.
  On
October 27, 2008, the Company entered into a Board of Director’s Agreement with
Suresh Nihalani.  The
Company issued a stock award of 400,000 shares to Mr. Nihalani, under the terms
of the Director’s Agreement, which shares will be issued ratably over a
thirty-six month period commencing December 2008.  During the year ended
January 2009, Mr. Nihalani was issued 11,111 shares under this
agreement.
 
 14
 
 Warrants
outstanding:
  Aggregateintrinsic
      value
                                        
                                        
                                        Number
      of warrantsOutstanding
      at January 31, 2009
                                        
                                        $
                                        —
                                        
                                        
                                        
                                        625,803Granted
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —Exercised
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —Cancelled
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —Outstanding
      at April 30, 2009
                                        
                                        $
                                        —
                                        
                                        
                                        
                                        625,803
 
 
 ExercisePrice
                          
                          
                          Warrantsoutstanding
                          
                          
                          Weighted
      averageremaining contractual life
                          
                          
                          Warrantsexercisable
                          
                          Weighted
      averageexercise price$
                          1.10
                          
                          
                          
                          470,470
                          
                          
                          
                          1.54
                          
                          
                          
                          470,470
                          
                          $
                          0.83$
                          1.50
                          
                          
                          
                          155,333
                          
                          
                          
                          0.76
                          
                          
                          
                          155,333
                          
                          $
                          0.37625,803
                          
                          
                          
                          2.30
                          
                          
                          
                          625,803
 
 
 17.
Commitments and Contingency
  On March
15, 2009, the Company entered into a Consulting Agreement with Kaneohe Advisors
LLC (Kyle Francis) under which Mr. Francis would become the Company’s Executive
Vice President, Business Development and Strategy. Under the terms of the
Agreement, Mr. Francis will be paid $8,000 per month, of which $2,000 will be
paid in cash and $6,000 will be deferred.  In addition, Mr. Francis
received 350,000 shares of restricted stock at the date of the Agreement and is
entitled to 350,000 additional restricted shares on the first and second
anniversaries of the Agreement, provided the Agreement is not terminated
..  The initial 350,000 shares, along with 50,000 shares granted to Mr.
Francis in the year ended January 2009, have been accrued as shares to be issued
as a liability in the accompanying financial statements.
 
 On
September 4, 2008, Apollo Medical Management, Inc. executed an employment
agreement with Jilbert Issai, M.D., to provide services as Senior Vice
President.  The agreement is for an initial one-year term with
provision for successive one-year periods.  Under the agreement,
Doctor Issai is entitled to a nominal salary and may be granted options to
purchase an aggregate of 300,000 shares of the Company’s common stock at an
exercise price of $.10 per share when and if the Company is to adopt a stock
compensation plan.
  15
 
 The
Company entered into an Advisory Agreement with Stonecreek Associates, Inc. on
October 27, 2008, under which Stonecreek will provide investment advisory
services to the Company.  Apollo is obligated to pay a fee to
Stonecreek on completion of any debt or equity financing.  The
agreement terminated on March 31, 2009.
 
 On
October 27, 2008, the Company entered into a Board of Director’s Agreement with
Suresh Nihalani.  The Company will issue a stock award of 400,000
shares to Mr. Nihalani, under the terms of the Director’s Agreement, which
shares will be issued ratably over a thirty-six month period commencing December
2008.  The shares will be released to Mr. Nihalani on a monthly basis
during his tenure as a Director.  The distribution of shares will
continue as long as Mr. Nihalani  serves  on the Board, but
will cease when Mr. Nihalani is no longer is a Director. Mr. Nihalani was
issued 11,111 shares under this agreement in the year ended January 31, 2009. In
addition, 11,111 shares have been accrued as shares to be issued as a liability
in the accompanying financial statements
 
 
 The
Company received a claim for $250,000 relating to amounts purportedly owed by
the Company as a result of the initial reverse acquisition
transaction.  This dispute relates to the initial letter dated June 3,
2008.  The terms of the letter of intent call for, among other things,
the payment of cash of $250,000 within 60 days of closing.  The letter
of intent states, however, that it is intended to serve as a memorandum of the
Parties current discussions, and that a definitive transaction agreement will
follow.  The letter of intent further states that both parties
acknowledge that all provisions of the letter of intent are non binding, and
that no contract or agreement providing for a transaction shall be deemed to
exist unless and until a final agreement has been negotiated and
executed.  The final merger agreement that was executed contains a
clause that it is the “entire agreement” and thus supersedes all previous
agreements including the letter of intent; moreover, management contends that
there are no additional amounts owed under the final merger agreement. The
Company has not accrued for any amount asserted in the above claim as the
attorney of the Company has advised that the claim is in its early stage and the
outcome of this matter could not be predicted at this stage.
 
 
 
 ITEM
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 
 Three
Months Ended April 31, 2009 vs. Three Months Ended April 31, 2008
 
 Revenues
 
 Apollo
reported revenues of $501,183 for the quarter ended April 2009, compared to
revenues of $10,000 in the comparable quarter ended April 2008.  Prior
to the Management Services Agreement executed on August 1, 2008, the Company
could only report the management fees charged to its affiliate, AMH. Subsequent
to August 1, 2008, revenues represent the billings by AMH under the various fee
structures from health plans, medical groups/IPA’s and hospitals. Management fee
revenues have been eliminated subsequent to August 1, 2008.
 
 Cost
of Services
  16
 
 Cost
      of Services was$419,554 for the
      three months ended April 2009, compared to Cost of Services of $ 0 for the
      corresponding three months ended April 2008. Cost of Services includes the
      payroll and consulting costs of the physicians, all payroll related costs,
      costs for all medical malpractice insurance and physician
      privileges.
 
 Operating
Expenses
 
 General
      and Administrative expenses were $172,562 for the three months ended April
      30, 2009, compared to General and Administrative expenses of $83,134
      reported in the comparable three months of April 30, 2008. In the first
      quarter of 2009, the Company recorded non-cash compensation expenses
      totaling $94,500, related to the issuance of shares for service. There
      were no comparable non-cash expenses in the first quarter of
      2008.
 
 Loss
from Operations
 
 The
Company reported a Loss from Operations of $101,272 for the three month period
ended April 30, 2009, compared to a Loss from Operations of $73,134 for the
comparable three months ended April 30, 2008.  The increased loss of
$28,138 from 2008 to 2009 was due to the high costs of service relative to the
revenues generated from the Company’s contracts, as the Company has not yet
achieved economies of scale in its activities. In addition, the loss from
operations in the quarter ended April 2009 was further impacted by compensation
and consulting costs.  The Loss from Operations in the quarter ended
April 2008 was due to the fact that the low level of management Fee income was
insufficient to cover the costs of services and administrative costs in this
formative year.
 
 Net
Loss
 
 A net
loss of $106,921 was reported for the three months ended April 30, 2009 verses a
net loss of $73,134 for the three months ended April 30, 2008.  The
increased loss of $33,787 was primarily due to non-cash compensation costs
incurred in the quarter just ended.
 
 Liquidity
and Capital Resources
 
 At April
30, 2009, the Company had cash and cash equivalents of $59,220, compared to cash
and cash equivalents of $84,161 at the beginning of the fiscal year at January
31, 2009. Short-term borrowings totaled $79,081 at April 30, 2009, compared to
$74,782 as of January 31, 2009.  The Company had no short-term
borrowings at January 31, 2008. Long-term borrowings totaled $219,442 as of
April 30, 2009, compared to long-term borrowings of $231,218 on January 31,
2009.
 .
 
 Net cash
used in operating activities totaled a $17,464 for the three months ended April
30, 2009, compared to $71,481 for the comparable three months ended April 30,
2008.  The significantly larger operating loss, including the $250,000
paid and expensed on the Siclone Merger, was primarily responsible for the
increase in the negative operating cash flow.
  
 
 ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
 
 17
 The Company does not hold any
derivative instruments and does not engage in any hedging
activities.
 
 
 ITEM
4.  CONTROLS AND PROCEDURES
 
 
 a.
              Evaluation
      of Disclosure Controls and
Procedures.
 
 We
carried out an evaluation, under the supervision and with the participation of
our management, including our Chief Executive Officer and Principal Financial
and Accounting Officer, of the effectiveness of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934 as of the end of the period covered by this
report.  Based on that evaluation, our Chief Executive Officer and
Principal Financial and Accounting Officer have concluded that our disclosure
controls and procedures were ineffective as of April 30,
2009.  Management has identified the following three material
weaknesses in our disclosure controls and procedures, and internal controls over
financial reporting:
  1.         
We do not have written documentation of our internal control policies and
procedures.  Written documentation of key internal controls over financial
reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. 
Management evaluated the impact of our failure to have written documentation of
our internal controls and procedures on our assessment of our disclosure
controls and procedures, and concluded that the control deficiency that resulted
represented a material weakness.
   2.         
We do not have sufficient segregation of duties within accounting functions,
which is a basic internal control.  Due to our size and nature, segregation
of all conflicting duties may not always be possible and may not be economically
feasible.  However, to the extent possible, the initiation of transactions,
the custody of assets and the recording of transactions should be performed by
separate individuals.  Management evaluated the impact of our failure to
have segregation of duties on our assessment of our disclosure controls and
procedures, and concluded that the control deficiency that resulted represented
a material weakness.
   3.           We
do not have review and supervision procedures for financial reporting functions.
The review and supervision function of internal control relates to the accuracy
of financial information reported. The failure to review and supervise could
allow the reporting of inaccurate or incomplete financial information. Due to
our size and nature, review and supervision may not always be possible or
economically feasible.  Management evaluated the impact of our significant
number of audit adjustments, and concluded that the control deficiency that
resulted represented a material weakness.
  Based on
the foregoing materials weaknesses, we have determined that, as of April 30,
2009, the effectiveness of our controls and procedures over financial accounting
and reporting are insufficient.  The Company is taking steps to
improve the timeliness and accuracy of its financial information, including the
hiring of additional employees to facilitate proper segregation of
duties.  It should be noted that any system of controls, however well
designed and operated, can provide only reasonable and not absolute assurance
that the objectives of the system are met. In addition, the design of any
control system is based in part upon certain assumptions about the likelihood of
certain events. Because of these and other inherent limitations of control
systems, there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions, regardless of how
remote.
 
 The
Company’s Chief Executive Officer and Chief Financial Officer are responsible
for establishing and maintaining adequate internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange
Act).  Because of its inherent limitations, internal control over
financial reporting may not prevent or detect
misstatements.  Therefore, even those systems determined to be
effective can only provide reasonable assurance of achieving their control
objectives.
 
 18
 b.                      Changes
in Internal Controls over Financial Reporting
 
  There has
been no change in our internal controls over financial reporting during our most
recently completed fiscal quarter (i.e., the three-month period ended April 30,
2009) that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
 
 
 PART
II – OTHER INFORMATION
 
 ITEM
      1.  LEGAL
PROCEEDINGS
  The
Company was not a party to any legal proceedings as of April 30, 2009 and is not
aware of any pending legal actions.
 
 ITEM 2. UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
 
 The
Company did not sell any Equity Securities during the periods covered by this
filing.
 
 
 ITEM
3.  DEFAULTS UPON SENIOR SECURITIES
 
 There were no defaults upon senior
securities during the period ended April 30, 2008.
 
 ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 There were no matters submitted to the
vote of securities holders during the period ended April 30, 2008.
 
 
 ITEM
5. OTHER INFORMATION
 
 None
 
 ITEM
6. EXHIBITS
 
 Exhibit
      Number
                    
                    Description31.1
                    
                    Certification
      by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a)
      of the Exchange Act.31.2
                    
                    Certification
      by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a)
      of the Exchange Act.32.1
                    
                    Certification
      by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b)
      of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the
      United States Code.32.2
                    
                    Certification
      by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b)
      of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the
      United States
Code.
  19
  SIGNATURES
 
 In accordance with the requirements of the Exchange
Act, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
  APOLLO
      MEDICAL HOLDINGS, INC.Dated:
       June 12, 2009
              By:
              /s/
      Warren HosseinionWarren
      HosseinionChief
      Executive Officer and DirectorDated:
       June 12, 2009
              By:
              /s/
      A. Noel DeWinterA.Noel
      DeWinterChief
      Financial Officer and Principal Accounting Officer
 
 
 20