<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


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

                  For the quarterly period ended March 31, 2003

                                       OR

             [ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE
                              EXCHANGE ACT OF 1934

            From the transition period from __________ to ___________

                         Commission file number 00030074



                                APO HEALTH, INC.
             -----------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                         NEVADA                           86-0871787
         --------------------------------            ----------------------
         (STATE OR OTHER JURISDICTION OF                 (IRS EMPLOYER
         INCORPORATION OR ORGANIZATION)              IDENTIFICATION NUMBER)


                 3590 OCEANSIDE ROAD, OCEANSIDE, NEW YORK 11575
                 ----------------------------------------------
                    (Address of principal executive offices)


                                 (800) 365-2839
                           ---------------------------
                           (Issuer's Telephone Number)



         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days:

                                                                 Yes __X__ No



As of May 7, 2003, 26,604,227 shares of Common Stock of the issuer were issued.

<PAGE>




                                APO HEALTH, INC.

                                    FORM 10-Q
                          QUARTER ENDED MARCH 31, 2003


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>

                                                                                         PAGE
                                                                                         ----
PART I - FINANCIAL INFORMATION
<S>                                                                                   <C>
         ITEM 1            Financial Statements.

                           Consolidated Balance Sheet as of
                           March 31, 2003 and September 30, 2002.                           3

                           Consolidated Statement of Income for the three and six
                           Months ended March 31, 2003 and 2002.                            4

                           Consolidated Statement of Cash Flows for the
                           Six months ended March 31, 2003 and 2002.                        5

                           Notes to Consolidated Financial Statements.                 6 - 11

         ITEM 2            Management's Discussion and Analysis
                           Or Plan of Operations.                                          12

PART II - OTHER INFORMATION

         ITEM 1            Legal Proceedings.                                              13
         ITEM 2            Changes in Securities and Use of Proceeds.                      13

         ITEM 3            Default upon Senior Securities.                                 13

         ITEM 4            Submission of Matters to a Vote of Security Holders.            13

         ITEM 5            Other Information.                                              13

         ITEM 6            Exhibits and Reports on Form 8-K.                               13

SIGNATURES                                                                                 14
</TABLE>


                                      - 2 -
<PAGE>



                         PART I - FINANCIAL INFORMATION
                                APO HEALTH, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>


                                                            MARCH 31,      SEPTEMBER 30,
                                                              2003              2002
                                                            ------------   --------------
                                                            (UNAUDITED)
<S>                                                         <C>             <C>
                                     ASSETS
                                     ------
CURRENT ASSETS:
   Cash                                                      $   249,443    $   520,618
   Accounts Receivable, net of allowance
      For doubtful accounts of $50,000 and
      $30,000                                                  2,105,105      1,511,295
   Inventory                                                   1,532,545      2,242,609
   Due from Officers                                             113,905        113,905
   Notes and Other receivable                                    105,985        258,500
   Deferred Tax Assets                                            12,000         12,000
   Other Current Assets                                           35,743         18,297
                                                             -----------    -----------
         Total Current Assets                                  4,154,726      4,677,224
Property and Equipment, net of accumulated
   Depreciation of $91,120 and $88,496                            23,251         28,499
Deferred tax asset                                                61,563         61,563
Deposits                                                           7,500          7,500
                                                             -----------    -----------
         Total Assets                                        $ 4,247,040    $ 4,774,786
                                                             ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
CURRENT LIABILITIES:
   Bank Notes Payable                                        $   663,059    $ 1,350,000
   Accounts Payable                                            1,740,863      1,118,288
   Accrued Expenses                                              269,642        200,718
   Customer deposits                                             126,668        665,596
                                                             -----------    -----------
         Total Current Liabilities                             2,800,232      3,334,602
                                                             -----------    -----------
STOCKHOLDERS' EQUITY:
Common stock, $.0002 par value,
     125,000,000 shares authorized, 26,404,227
     and 24,554,227 shares issued and outstanding                  5,274          4,904
   Paid-in Capital                                             1,677,113      1,621,983
   Retained Earnings (Deficit)                                  (235,579)      (186,703)
                                                             -----------    -----------
         Total Stockholders' Equity                            1,446,808      1,440,184
                                                             -----------    -----------

         Total Liabilities and Stockholders' Equity          $ 4,247,040    $ 4,774,786
                                                             ===========    ===========
</TABLE>



                                      - 3 -





                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                       FOR THE THREE AND SIX MONTHS ENDED
                       MARCH 31, 2003 AND 2002 (UNAUDITED)

<TABLE>
<CAPTION>
                                                 THREE MONTHS                     SIX MONTHS
                                             2003           2002            2003             2002
                                         ------------    ------------    ------------    -------------
<S>                                      <C>             <C>            <C>              <C>
Revenue                                  $ 10,570,735    $  6,899,125    $ 22,235,501    $ 13,389,415
Cost of Revenue                             9,996,141       6,298,501      21,101,277      12,114,139
                                         ------------    ------------    ------------    ------------
Gross Margin                                  574,594         600,624       1,134,224       1,275,276
                                         ------------    ------------    ------------    ------------
Operating Expenses
   Selling Expense                            111,189         190,551         267,288         397,863
   General and Administrative Expenses        533,546         418,586         860,406         796,721
                                         ------------    ------------    ------------    ------------
                                              644,735         609,137       1,127,694       1,194,584
                                         ------------    ------------    ------------    ------------
Income from Operations                        (70,141)         (8,513)          6,530          80,692
Interest Expense                               28,280          31,988          55,406          62,193
                                         ------------    ------------    ------------    ------------
Income (loss) before Provision for
Income Taxes                                  (98,421)        (40,501)        (48,876)         18,499
Provision for Income Taxes                    (19,818)           --              --             6,830
                                         ------------    ------------    ------------    ------------
Net Income Before Discontinued
Operations                                    (78,603)        (40,501)        (48,876)         11,669
Discontinued Operations
Gain on Sale of Discontinued
Operations Net of Taxes                          --           314,875            --           314,875
Income (loss) from Discontinued
Operations Net of Taxes                          --            26,967            --            35,519
                                         ------------    ------------    ------------    ------------
Discontinued Operations                          --           341,842            --           350,394
                                         ------------    ------------    ------------    ------------
Net Income                               $    (78,603)   $    301,341    $    (48,876)   $    362,063
                                         ============    ============    ============    ============
Basic and Diluted Earnings
   Per Common Share:
From Continuing Operations               $       (.00)   $       (.00)   $       (.00)   $        .00
From Discontinued Operations                      .00             .01             .00             .01
                                                         ------------    ------------    ------------
Total                                    $       (.00)   $        .01    $        .01    $        .01
                                         ============    ============    ============    ============
Weighted Average Common Shares
   Outstanding                             25,441,560      23,754,874      24,997,893      23,579,874
                                         ============    ============    ============    ============
</TABLE>




                                      - 4 -




                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED
                       MARCH 31, 2003 AND 2002 (UNAUDITED)


                                                   2002         2001
                                                -----------   ---------

CASH FLOW FROM OPERATING ACTIVITIES:
Net Income                                      $ (48,876)   $ 362,063
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
Depreciation and Amortization                       5,428       11,733
Allowance For Doubtful Accounts                    20,000         --
Deferred Taxes                                       --         12,637
Write-off Goodwill Discontinued Operations           --        125,537
Stock Issued for Services                          55,500         --
Changes In:
  Accounts Receivable                            (613,810)     (51,645)
  Other Receivables                               152,515     (302,102)
  Inventory                                       710,064     (394,482)
  Other Current Assets                            (17,446)     120,487
  Accounts Payable                                622,575     (206,747)
  Accrued Expenses                                 68,924       19,257
  Income Taxes Payable                               --        126,211
  Customer Deposits Payable                      (538,928)     238,000
  Other Current Liabilities                          --         41,482
                                                ---------    ---------
Cash Flows from Operating Activities              415,766      102,431
                                                ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment In Subsidiary                             --        (25,000
Assets Acquired Net of Cash Investment               --         (9,100)
                                                ---------    ---------
Net  Cash From Investing Activities                  --        (34,100)
                                                ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from Officers, Net                          --        (46,448)
Proceeds (Payment) on Bank Notes Payable, Net    (686,941)     (92,717)
                                                ---------    ---------
Cash Flows from Financing Activities             (686,941)    (139,165)
                                                ---------    ---------
Net Increase (Decrease) in Cash                  (271,175)     (70,834)
                                                ---------    ---------
Cash Balances:
Beginning of Period                               520,618      179,167
                                                ---------    ---------
End of Period                                   $ 249,443    $ 108,333
                                                =========    =========


                                      - 5 -



                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The following financial information is submitted in response to the requirements
of Form  10-Q  and does not  purport  to be  financial  statements  prepared  in
accordance with generally  accepted does not purport to be financial  statements
prepared in accordance with generally accepted  accounting  principles.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted,  although the Company  believes the  disclosures  that are
made are adequate to make the information presented not misleading.  Further, in
the opinion of the management,  the interim financial  statements reflect fairly
the financial position and results of operations for the periods indicated.

It is suggested that these interim consolidated  financial statements be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's Form 10K containing the Company's audited  financial  statements as of
and for the year ended September 30, 2002 filed with the Securities and Exchange
Commission.

The  results of  Operations  for the six  months  ended  March 31,  2003 are not
necessarily  indicative  of results  expected  for the entire  fiscal year ended
September 30, 2003.


NOTE  1  ACCOUNTING  POLICIES

Nature of business  and basis of  consolidation.  APO Health,  Inc.  ("APO") was
incorporated under the laws of the state of New York in August 1978. The APO and
its wholly-owned subsidiary,  Universal Medical Distributors, Inc. ("Universal")
distribute  disposable  medical  products  principally  to dental,  medical  and
veterinary  professionals  and wholesalers in the United States,  principally on
the East  Coast.  Effective  June  13,  2001,  InternetFinancialCorp.com,  Inc.,
("IFAN"),  a Nevada  corporation,  which is an inactive public company  acquired
APO,  (collectively,  the  "Company"),  pursuant  to a  tax-free  reorganization
agreement.  The  acquisition  was  accounted  for by the  purchase  method under
business combinations in a reverse acquisition transaction.  Concurrently,  IFAN
changed its name to APO Health, Inc., a Nevada corporation.

Cash and cash  equivalents.  For purposes of the statements of cash flows,  cash
equivalents  include all highly liquid  investments with original  maturities of
three month or less.

Revenue recognition occurs when products are shipped.

Merchandise  inventory  is  stated  at the  lower  of  cost or  market.  Cost is
determined using the first-in, first-out method.

Property and  equipment is stated at cost.  Depreciation  is provided for on the
straight-line method over the useful estimated life. The cost of maintenance and
repairs is expensed as incurred.


                                       -6-


                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Income taxes are computed using the tax liability method of accounting,  whereby
deferred  income taxes are  determined  based on differences  between  financial
reporting  and tax bases of assets and  liabilities  and are measured  using the
enacted tax rates that will be in effect when the differences reverse.

Earnings Per Share.Basic  net income per share has been calculated  based on the
weighted average number of shares of common stock outstanding during the period.
Diluted  net  income per share is  computed  by  dividing  the net income by the
weighted  average number of common shares  outstanding  plus potential  dilutive
securities.

Reclassifications.  Certain reclassifications of certain prior year amounts were
made to conform to the current year presentation.

Estimates and  assumptions.  Preparing  financial  statements in conformity with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and  expenses  at the balance  sheet date and for the period then ended.  Actual
results could differ from these estimates.


NOTE  2  -  SUPPLEMENTAL  CASH  FLOW  STATEMENT  DISCLOSURES

                                                2003     2002
                                              -------   -------
Cash paid during the year for:
         Interest                             $55,406   $62,193
         Income taxes                            --        --
Non-cash transaction:

         Common Stock Issued for Consulting
           And Professional Fees              $55,500      --




Note  3  -  BANK  NOTES  PAYABLE

On  October  29,2002,  the  Company  entered  into a  financing  agreement  with
Rosenthal & Rosenthal,  Inc. The financing agreement provides the Company with a
maximum  credit  facility  not  to  exceed  $3,000,000.The  credit  facility  is
collateralized  by  substantially  all the Company's  assets and $500,000 of the
facility  is  personally  guaranteed  by Dr. Jan  Stahl,Chairman  and CEO of the
Company.  Interest is payable  monthly on the average  daily loan balance at the
announced  prime rate of JP Morgan Chase bank plus 2.5%. This agreement is for a
period of three years through  October  31,2005 and may be extended on a year to
year basis thereafter unless terminated as provided in the agreement.


                                       -7-




                                 APO HEALTH INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3  BANK NOTES PAYABLE (CONTINUED)

<TABLE>
<CAPTION>
Bank Notes Payable of the following:
                                                             MARCH 31,   SEPTEMBER 30,
                                                               2003           2002
                                                            -----------   -----------
<S>                                                         <C>           <C>
Own Note Borrowing                                          $   663,059   $ 1,350,000
                                                            ===========   ===========
</TABLE>

Note 4 -- INCOME TAXES

Income taxes (benefit) consist of the following:
<TABLE>
<CAPTION>
                                                               2003           2002
                                                            -----------   -----------
<S>                                                         <C>           <C>
         Continuing Operations                              $      --     $    18,350
         Discontinued Operations                                   --         185,345
                                                            -----------   -----------
                                                            $      --     $   203,695
                                                            ===========   ===========
</TABLE>

A reconciliation of income tax at the federal
statutory income tax rate to total
income taxes is as follows:

<TABLE>
<CAPTION>

                                                               2003           2001
                                                            -----------   -----------
<S>                                                         <C>           <C>
         Computed at the federal
            statutory rate of 34%                           $      --     $   203,712
         State income tax                                          --          25,399
         Operating loss carryforward                               --         (25,416)
                                                            -----------   -----------
                                                            $      --     $   203,695
                                                            ===========   ===========
</TABLE>


NOTE 4 INCOME TAXES (CONTINUED)

The components of deferred taxes are as follows:

<TABLE>
<CAPTION>

                                                            DECEMBER 30,  SEPTEMBER 30,
                                                                2002          2002
                                                            -----------   -----------
<S>                                                         <C>           <C>
         Deferred tax assets
            Allowance for doubtful accounts                 $    12,000   $    12,000
            Depreciation                                         11,693        11,693
            Net operating loss carryover,                        27,300        27,300
         Reversal of valuation allowance                         22,300        22,300
                                                            -----------   -----------
         Total deferred tax assets                               73,563        73,563
         Less Current Portion                                    12,000        12,000
                                                            -----------   -----------
         Non current deferred tax asset                     $    61,563   $    61,563
                                                            ===========   ===========
</TABLE>

The Company has a net operating loss carryover of approximately $ 75,000 to
offset future taxable income. The carryover expires 2017.


                                       -8-

<PAGE>



                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 -DISCONTINUED OPERATIONS

In February 2002, the Company sold the veterinary  division of Universal Medical
Distributors,  Inc.,.The  financial  statements  for 2001 have been  restated to
reflect the  discontinued  operations of this division.  In connection  with the
sale of the veterinary  division,  the Company  received a note in the amount of
$250,000 which was due on January 31,2003.  As March 31,2003 there was a balance
due of $13,795 subject to final reconciliation of the inventory sold.

In Janaury,2002 , the Company  acquired  Envirotech Air Quality  Services,  Inc.
("Envirotech")  . The Company sold  "Envirotech" in August 2002 which included a
note a in the  amount of  $8,500  receivable  over a period  of 19  months  with
interest at the rate of 18% per annum.

Note  6  -  COMMON  STOCK

STOCK OPTION PLAN
-----------------

On July 22,2002,  the Company adopted a Bonus  Compensation  Warrant  Agreement,
whereby,  the Company would issue Bonus Compensation  Warrants equivalent to 10%
of the price of any merger or  acquisition  brought to the  Company.  All of the
warrants  being  exercisable  into  shares of common  stock at 80% of the 20 day
average bid and ask price of the Company's common stock. The Company  authorized
up to a maximum  aggregate of 3,000,000 shares of common stock available for any
Bonus Compensation Warrants.

On October  1,2002,  the Company filed a form S-8 authorizing the issuance of up
to  1,000,000  shares of common  stock for  consultants  and  professionals.  In
January the Company  issued  650,000 of those shares valued at $.03 per share or
$19,500  for  consulting  for  business   development,   including  mergers  and
acquisitions.

On March 14,2003, the Company filed another form S-8 authorizing the issuance of
up to 2,750,000  shares of common stock for  consultants and  professionals.  On
March  26,2003  1,100,000  shares  of common  stock  valued at $.03 per share or
$36,000 for consulting and professional fees for business development  including
mergers and acquisitions.

Note 7 - LEASES

The Company  leases 11,800 square feet in New York .The lease is  month-to-month
with affiliated companies owned by the Company's officers and shareholders.  The
affiliate's  underlying  New York lease expires in 2004 . Lease payments made by
the Company approximate the payments due by the affiliated companies.

Future minimum lease payments are as follows:

Year ended March 31, 2003               $72,450
                     2004               $56,175


                                       -9-

<PAGE>


                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note  8 -  COMMITMENTS  AND  CONTINGENCIES

LITIGATION
----------

There is an action  pending  in the  Circuit/Superior  Court of  Marion  County,
Indiana  entitled  Kenro,  Inc.,  on behalf of itself and all  others  similarly
situated  against APO Health,  Inc. The lawsuit involves  unsolicited  broadcast
faxes  sent in the state and has been  certified  as a class  action  suit.  The
Company has petitioned the court to certify its class action certification order
for  interlocutory  appeal.  If the Company can defeat the class  certification,
then the  plaintiff is limited to a single  violation  with a maximum  potential
recovery of $1,500. If the class  certification issue is lost then the Company's
exposure  can range in the  millions  of  dollars.  The Company has filed a suit
seeking  indemnification  by or contribution from the vendors who sent the faxes
on behalf  of the  Company.  It is the  Company's  belief  and  contention  that
damages,  if any, which may be awarded to the plaintiff are covered by insurance
up to policy limits.

However, on October 24, 2001, the Company was named as a defendant in Merchant's
& Business  Men's Mutual  Insurance  Company vs. APO Health,  Inc.  Merchant's &
Business  Men's Mutual  Insurance  Company  issued a Commercial  Blanket  Excess
Liability  insurance policy to the Company for one year commencing  February 27,
2000 up through February 27, 2001.  Merchant's & Business Men's Mutual Insurance
Company  alleges in its complaint that policy coverage with the Company does not
extend  to the  allegations  set forth in the  aforementioned  Kenro  suit.  The
Company, however,  disagrees and contends that the policy issued by Merchant's &
Business Men's Mutual Insurance Company obligates them to cover any damages that
the Company may incur, as a result of an unfavorable verdict in the Kenro suit.

On July 1,  2002,  the  Court  granted  the  intervention  motion  of the  Kenro
plaintiffs,  and,  as a matter of law,  denied  Merchants'  motion  for  summary
judgement  and granted the Company's  cross-motion  for summary  judgement,  and
finding that the claims  asserted  against the Company in the Kenro lawsuit fell
within the terms of the Merchants' policies. As a result, the Court ordered that
Merchants has a duty to defend and  indemnify the Company in the Kenro  lawsuit.
Additionally, the Court found alternatively,  that the disclaimer of coverage by
Merchants was untimely,  so that Merchants  would not be allowed to rely upon or
raise any coverage  defenses.  The Court also found that the Company is entitled
to be reimbursed for the legal fees that it incurred, and ordered that a hearing
be conducted to determine the amount that Merchant owed. Merchants  subsequently
filed a motion for reargument of its unsuccessful  summary judgement motion, and
papers in opposition have been submitted by the Company and the Kenro plaintiffs
to the Court.  The Company and the Kenro  plaintiffs  have argued that the Court
should adhere to its original  decision for a variety of reasons.  Merchants has
also filed an appeal to the  Appellate  Division  from the  Court's  July 1,2002
Order,  and in the event the Court adheres to its decision,  it is expected that
Merchants  will  again  notice  an  appeal,  and  move to have  the two  appeals
consolidated.



                                      -10-


<PAGE>


                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note  8 -  COMMITMENTS  AND  CONTINGENCIES (continued)
                                                     -

EMPLOYMENT AGREEMENT
--------------------


Effective October 1, 2001, the Company has entered into a three-year  employment
agreement  with its chief  executive  officer that provides for a minimum annual
salary  of  $250,000  with  incentives  based  on the  Company's  attainment  of
specified  levels  of sales  and  earnings  as  defined  in the  agreement.  The
employment  agreement  expires  September  30,  2004 and shall be  automatically
renewed for  successive  periods of one year unless  either party gives  written
notice to terminate the agreement.

Note 9 - CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at various financial  institutions .At times
such  balances  exceed the  insured  limits of the  financial  institution.  The
Company has not  experienced any losses in such accounts and does not believe it
is exposed to any  significant  credit  risk on cash  balances.  As of March 31,
2003,  the Company had $264,000 on deposit,  in excess of the $100,000  which is
insured under federal law.



                                      -11-

<PAGE>

ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS
---------------------

Revenue for the six months ended March 31,2003 was  $22,235,501,  an increase of
$8,846,086  or 66.1% over the six months  ended March  31,2002.  The increase in
revenue was due to an unusually  large increase in the  distribution of products
to  wholesale  distributors.  The Company  does not know if they will be able to
sustain  this growth in future  periods.  Cost of sales for the six months ended
March 31,2003 was  $21,101,277,  an increase of $8,987,138 or 74.2% over the six
months  ended March  31,2002.  As a result the gross margin for the period ended
March 31,2003 was  $1,134,224  or 5.10%  compared to $1,275,276 or 9.52% for the
period  ended March  31,2002.  The  decrease in the gross  profit  margin were a
result of the increased  revenue being wholesale  products which have low profit
margins and reduced  revenue from the retail dental sales.  Medical supply sales
which have a higher gross profit margin than the wholesale  sales have increased
but have not yet made up for the  decrease  in the  dental  sales.  The  Company
expects  that the  increases in sales of medical  supplies  will make up for the
loss in dental sales and increase the Company's overall gross profit margin.

Selling  expenses  for the six months  ended  March  31,2003  were  $267,288,  a
decrease of $130,575 or 32.8%  compared to the six months  ended March  31,2002.
The Company has reduced shipping costs by $22,646;  commissions by $42,314;  and
advertising costs by $110,997. Advertising costs in the next three to six months
will  increase as the Company  brings out  several  new  catalogues.  Travel and
entertainment  expenses  increased  by  $33,420,  which is related  directly  to
increased contact with medical and wholesale purchasers.

General and  administrative  expenses  for the six months  ended  March  31,2003
increased  by $63,685 or 8.0% from the six months  ended  March  31,2002.  Total
compensation  including  payroll taxes increased by approximately , 32,000 which
included a bonus of $152,500 for one of the officers for attaining  sales levels
included in his employment  agreement.  Without this bonus,  employment expenses
would have decreased by  approximately  $120,500 which includes the reduction of
two  employees  and voluntary  salary  reductions  by the three  officers of the
Company  Other  increases  included   professional  and  financing  fees,  which
increased by $21,484,  primarily  for the  Company's  new  financing  agreement.
Insurance  increased by $8,992 primarily from the increases in medical expenses.
Other general and administrative expenses increased by approximately $8,500.

Interest expense for the six months ended March 31,2003 was $55,406,  a decrease
of $6,787 form the six month period ended March 31,2002.  This was  accomplished
by entering into a new financing  agreement  where all  collections  are applied
against the line of credit on a daily basis and proceeds from the line of credit
are only  taken when  needed to pay down  liabilities.  As a result the  average
daily  balance  outstanding  on the line of  credit  has been  reduced.  The new
financing  agreement  allows the Company  greater  flexibility in its ability to
finance increased sales and additional inventory.


                                      -12-



<PAGE>

FINANCIAL CONDITION
-------------------

As of March  31,2003,  The  Company had net working  capital of  $1,354,494,  an
increase of $11,872 from September  30,2002..  On October  29,2002,  the Company
entered into a new financing  agreement  which  increased its credit facility by
$1,000,000  to  $3,000,000  giving the Company  greater  flexibility  to finance
larger receivables and inventory allowing for increased sales.

For fiscal 2003, the Company has reduced its budget for both selling and general
and administrative  expenses by approximately  $255,000 eliminating  unnecessary
expenses and revising some of the  operations.  In addition the Company  expects
that  consulting and other  professional  fees will be reduced by  approximately
$150,000 which it estimated were non-recurring items. The above reductions would
provide the  Company  with income  from  operations  based on the current  sales
volume.

Based upon the above factors,  the Company believes that it has sufficient funds
for operations for the next fiscal year.






                                      -13-

<PAGE>



                           PART II - OTHER INFORMATION

                                APO HEALTH, INC.

ITEM  1  -  LEGAL  PROCEEDINGS
------------------------------

There is an action  pending  in the  Circuit/Superior  Court of  Marion  County,
Indiana  entitled  "Kenro,  Inc.,  on behalf of itself and all others  similarly
situated  against APO Health,  Inc., Cause No.  490120101CP000016."  The lawsuit
involves unsolicited broadcast faxes sent in the state and has been certified as
a class action suit.  The Company has  petitioned the court to certify its class
action  for  interlocutory   appeal.  The  Company  has  filed  a  suit  seeking
indemnification by or contribution from the vendors who sent the faxes on behalf
of the Company.  It is the Company's belief and contention that damages, if any,
which may be awarded to the  plaintiff  are  covered by  insurance  up to policy
limits.

However, on October 24, 2001, the Company was named as a defendant in Merchant's
& Business  Men's  Mutual  Insurance  Company  vs. APO  Health,  Inc.,  Case No.
01-605-091,  Supreme  Court  of the  State  of New  York,  County  of New  York.
Merchant's & Business Men's Mutual Insurance Company issued a Commercial Blanket
Excess  Liability  insurance  policy  to the  Company  for one  year  commencing
February 27, 2000 up and through February 27, 2001.  Merchant's & Business Men's
Mutual Insurance  Company alleges in its complaint that policy coverage with the
Company does not extend to the allegations set forth in the aforementioned Kenro
suit.  The Company,  however,  disagrees  and contends that the policy issued by
Merchant's & Business Men's Mutual Insurance Company obligates them to cover any
monetary  damages  that the  Company  may incur,  as a result of an  unfavorable
verdict in the Kenro suit.  There is an action  pending in the  Circuit/Superior
Court of Marion County,  Indiana  entitled Kenro,  Inc., on behalf of itself and
all others  similarly  situated  against APO Health,  Inc. The lawsuit  involves
unsolicited  broadcast faxes sent in the state and has been certified as a class
action suit.  The Company has  petitioned  the court to certify its class action
certification  order for  interlocutory  appeal.  If the  Company can defeat the
class certification,  then the plaintiff is limited to a single violation with a
maximum potential recovery of $1,500. If the class  certification  issue is lost
then the  Company's  exposure can range in the millions of dollars.  The Company
has filed a suit seeking indemnification by or contribution from the vendors who
sent the  faxes  on  behalf  of the  Company.  It is the  Company's  belief  and
contention  that  damages,  if any,  which may be awarded to the  plaintiff  are
covered by insurance up to policy limits.

However, on October 24, 2001, the Company was named as a defendant in Merchant's
& Business  Men's Mutual  Insurance  Company vs. APO Health,  Inc.  Merchant's &
Business  Men's Mutual  Insurance  Company  issued a Commercial  Blanket  Excess
Liability  insurance policy to the Company for one year commencing  February 27,
2000 up through February 27, 2001.  Merchant's & Business Men's Mutual Insurance
Company  alleges in its complaint that policy coverage with the Company does not
extend  to the  allegations  set forth in the  aforementioned  Kenro  suit.  The
Company, however,  disagrees and contends that the policy issued by Merchant's &
Business Men's Mutual Insurance Company obligates them to cover any damages that
the Company may incur, as a result of an unfavorable verdict in the Kenro suit.


                                      -14-


<PAGE>


ITEM  2  -  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS
None.


ITEM  3  -  DEFAULT  UPON  SENIOR  SECURITIES
None.


ITEM  4  -  SUBMISSION   OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
None.


ITEM  5  -  OTHER  INFORMATION
None.


ITEM  6  -  EXHIBITS  AND  REPORTS  ON  FORM  8-K
None.



                                      -15-



<PAGE>





                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                APO HEALTH, INC.



Date:    May  14, 2003           By:      /s/  Dr. Jan Stahl
                                          ------------------
                                          Dr. Jan Stahl, Chairman
                                          Chief Executive Officer
                                             And Secretary
                                          (Principal Executive Officer)



Date:    May  14, 2003           By:      /s/  Peter Steil
                                          ----------------
                                          Peter Steil, President
                                             and Treasurer
                                          (Principal Financial and
                                          Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.



Date:    May  14, 2003                By:      /s/  Dr. Jan Stahl
                                               ------------------
                                               Dr. Jan Stahl, Director



Date:    February  18, 2003           By:      /s/  Peter Steil
                                               ----------------
                                               Peter Steil, Director



Date:    February  18, 2003           By:      /s/  Kenneth Leventhal
                                               ----------------------
                                               Kenneth Leventhal, Director



                                      -16-

<PAGE>



                CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
              UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED


I, Dr. Jan Stahl, Chief Executive Officer of APO Health, Inc., certify that:

1.   I have reviewed this quarterly report on Form 10 Q of APO Health, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  Registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  Registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and  procedures  of a date  within 45 days of the filing  date of this
          quarterly report (the "Evaluation ate"); and

     (c)  presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent function):

     (a)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,   process   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and





                                      -17-

<PAGE>





6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.





Dated    May 14, 2003,        By:      /s/  Dr. Jan Stahl
                                       ----------------------------------
                                            Dr. Jan Stahl
                                            Chief Executive Officer and Director




                                      -18-

<PAGE>



                CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
              UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED


I, Dr. Peter Steil, Chief Financial Officer of APO Health, Inc., certify that:

1.   I have reviewed this annual report on Form 10 Q of APO Health, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

     1.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the Registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  Registrant
          and we have:

          (a)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the Registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and  procedures  of a date within 45 days of the filing
               date of this quarterly report (the "Evaluation ate"); and

          (c)  presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent function):

          (d)  all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process  summarize and report  financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          (e)  any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and


                                      -19-

<PAGE>


6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.





Dated    May 14, 2003,       By:       /s/  Peter Steil
                                       --------------------------------
                                            Peter Steil
                                            Chief Financial Officer and Director


                                      -20-

<PAGE>