<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 June 30, 2002

                                     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 August 10, 2002,  23,754,081 shares of Common Stock of the issuer were
issued.


                                       1

<PAGE>

                              APO  HEALTH,  INC.
                                 FORM  10-Q
                       QUARTER  ENDED  JUNE  30,  2002


                             TABLE  OF  CONTENTS
                             -------------------

                                                                  PAGE
PART  I -  FINANCIAL INFORMATION

ITEM  1   Financial Statements.

          Consolidated Balance Sheet as of
          June 30,2002 and September 30, 2001.                       3

          Consolidated Statement of Income for the three and nine
          months ended June 30, 2002 and 2001.                       4

          Consolidated Statement of Cash Flows for the three and
          nine months ended June 30 2002 and 2001.                   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


                                       2

<PAGE>

<PAGE>
                      PART  I  -  FINANCIAL  INFORMATION
                               APO  HEALTH,  INC.
                         CONSOLIDATED  BALANCE  SHEET
<TABLE>
<CAPTION>
                                                     June  30, 2002    September 30, 2001
                                                   ------------------  ------------------
                                                       (Unaudited)
<S>                                                <C>                 <C>
                                    ASSETS
                                    ------

CURRENT ASSETS:
   Cash                                                 $     544,524       $     179,167
   Accounts Receivable, net of allowance for
   doubtful accounts of $29,000 and $29,000                 2,154,403           1,768,501
   Other Receivables                                          250,000                   -
   Inventory                                                2,532,929           1,692,209
   Due from Officers                                           98,905              99,844
   Deferred Tax Assets                                         20,902              36,020
   Other Current Assets                                        48,335             165,935
                                                   ------------------  ------------------
     Total Current Assets                                   5,649,998           3,941,676
                                                   ------------------  ------------------
Property and Equipment, net of accumulated
   Depreciation of $128,832 and $76,606                       107,683              40,389
Goodwill, less accumulated amortization
   of $    -     and $53,802                                   72,891             125,537
Deposits                                                        7,500               7,500
                                                   ------------------  ------------------
     Total Assets                                       $   5,838,072       $   4,115,102
                                                   ------------------  ------------------

                   LIABILITIES  AND  STOCKHOLDERS'  EQUITY
                   ---------------------------------------
CURRENT LIABILITIES:
   Bank Notes Payable                                   $   1,760,000       $   1,736,224
   Accounts Payable                                         1,441,550           1,056,117
   Accrued Expenses                                            50,166              50,776
   Due to Officer                                                   -              45,509
   Income Taxes Payable                                        97,750                   -
   Customer Deposits                                          780,227                   -
   Other Current Liabilities                                  115,814                   -
                                                   ------------------  ------------------
     Total Current Liabilities                              4,245,507           2,888,626
                                                   ------------------  ------------------
STOCKHOLDERS' EQUITY:
Common stock, $.0002 par value,
   125,000,000 shares authorized, 23,754,081
   and 23,132,089 shares issued and outstanding                 4,744               4,626
  Paid-in Capital                                           1,621,494           1,452,530
  Retained Earnings (Deficit)                                 100,362            (230,680)
  Less Treasury Stock                                        (134,035)                  -
                                                   ------------------  ------------------
       Total Stockholders' Equity                             592,565           1,226,476
                                                   ------------------  ------------------

       Total Liabilities and Stockholders' Equity       $   5,838,072       $   4,115,102
                                                   ------------------  ------------------
</TABLE>


                                       3

<PAGE>
<TABLE>
<CAPTION>

                              APO  HEALTH,  INC.
                   CONSOLIDATED  STATEMENT  OF  OPERATIONS
                  FOR  THE  THREE  AND  NINE  MONTHS  ENDED
                    JUNE  30,  2002  AND  2000  (UNAUDITED)

                                             THREE MONTHS                          NINE MONTHS
                                           ----------------                      ---------------

                                        2002               2001               2002               2001
                                     -----------        -----------        -----------        -----------
<S>                                  <C>                <C>                <C>                <C>
Revenue                              $ 8,502,902        $ 6,311,250        $22,019,231        $18,501,492
Cost of Revenue                        7,906,604          5,308,241         20,061,043         16,263,597
                                     -----------        -----------        -----------        -----------
Gross Margin                             596,298          1,003,009          1,958,188          2,237,895
                                     -----------        -----------        -----------        -----------

Operating Expenses
   Selling Expense                       197,303            165,057            599,423            501,258
   General and Administrative Expenses   419,560            725,247          1,267,437          1,526,839
                                     -----------        -----------        -----------        -----------
                                         616,863            890,304          1,866,860          2,028,097
                                     -----------        -----------        -----------        -----------

Income from Operations                   (20,565)           112,705             91,328            209,798
Interest Expense                          33,933             35,971             96,126            129,018
                                     -----------        -----------        -----------        -----------
Income (loss) before Provision for
Income Taxes                             (54,498)            76,734             (4,798)            80,780
Provision for (Recovery of)
Income Taxes                             (21,035)            58,607             (2,685)            42,117
                                     -----------        -----------        -----------        -----------
Net Income Before Discontinued
Operations                               (33,463)            18,127             (2,113)            38,663
Discontinued Operations
Gain on Sale of Discontinued
Operations Net of Taxes                    2,812                  -            317,687                  -
Income (loss) from Discontinued
Operations Net of Taxes                     (370)             2,098             15,468             24,766
                                     -----------        -----------        -----------        -----------
Discontinued Operations                    2,442              2,098            333,155             24,766
                                     -----------        -----------        -----------        -----------

Net Income                           $   (31,021)       $    20,225        $   331,042        $    63,429
                                     -----------        -----------        -----------        -----------
Basic and Diluted Earnings
   Per Common Share:
From Continuing Operations           $      (.00)       $       .00        $       .00        $       .00
From Discontinued Operations                (.00)               .00                .01                .00
                                     -----------        -----------        -----------        -----------
Total                                $      (.00)       $       .00        $       .01        $       .00
                                     -----------        -----------        -----------        -----------
Weighted Average Common Shares
   Outstanding                        23,754,874         17,069,033         23,637,943         15,462,292
                                     -----------        -----------        -----------        -----------
</TABLE>


                                      4

<PAGE>

                              APO  HEALTH,  INC.
                   CONSOLIDATED  STATEMENT  OF  CASH  FLOWS
                         FOR  THE  NINE MONTHS  ENDED
                    JUNE  30,  2002  AND  2001  (UNAUDITED)


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


CASH FLOW FROM OPERATING ACTIVITIES:
Net Income                                    $   331,042     $    63,429
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
Depreciation and Amortization                      20,742          19,844
Deferred Taxes                                     15,118           1,814
Write-off Goodwill Discontinued Operations        125,537               -
Stock Issued for Services                           5,047         135,211
Changes In:
  Accounts Receivable                            (376,436)         59,756
  Other Receivables                              (250,000)              -
  Inventory                                      (840,720)         (3,767)
  Other Current Assets                            117,600         (21,867)
  Accounts Payable                                373,544        (406,841)
  Accrued Expenses                                 (5,759)       (119,322)
  Income Taxes Payable                             97,750          64,769
  Customer Deposits Payable                       780,227               -
  Other Current Liabilities                        17,096               -
                                              -----------     -----------

Cash Flows from Operating Activities              410,788        (206,974)
                                              -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment In Subsidiary                          (25,000)              -
Assets Acquired Net of Cash Investment            (17,891)              -
Net  Cash From Investing Activities               (42,891)              -
                                              -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from Officers, Net                       (44,570)        (27,739)
Proceeds from sale of Common Stock Net of
Offering Costs of $20,000                               -         280,000
Proceeds (Payment) on Bank Notes Payable, Net      42,030         (31,512)
                                              -----------     -----------
Cash Flows from Financing Activities               (2,540)        220,749
                                              -----------     -----------
Net Increase (Decrease) in Cash                   365,357          13,775
                                              -----------     -----------

CASH BALANCES:
Beginning of Period                               179,167          90,732
                                              -----------     -----------
End of Period                                 $   544,524     $   104,507
                                              -----------     -----------


                                      5

<PAGE>

                              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 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, 2001 filed with the Securities and
Exchange Commission.

The results of operations for the nine months ended June 30, 2002 are not
necessarily indicative of results to be expected for the entire fiscal year
ending September 30, 2002.

NOTE  1  -  SUMMARY OF 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 Company 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, Internet Financial Corp.com, Inc., ("IFAN"), a Nevada
corporation, which was 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.

On January 2, 2002, the Company acquired 100% of the outstanding stock of
Envirotech Air Quality Services, Inc. ("Envirotech") a Florida corporation
specializing in indoor air quality testing, sanitation, sterilization and
filtration. The purchase price was $25,000 plus the Company will issue 50,000
shares of its restricted common stock to the former shareholders of
Envirotech. In addition, the Company will issue 100,000 common stock purchase
warrants to the former shareholders of Envirotech exercisable for a period of
two years at a purchase price of $.75 per share.The excess of the cost of the
acquisition over the net assets acquired  gives rise to goodwill of $72,891.


                                      6

<PAGE>

                              APO  HEALTH,  INC.
                NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, cash equivalents include all
highly liquid investments with original maturities of three months or less.

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

PROPERTY AND EQUIPMENT
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 expenses as incurred.

INTANGIBLES
Goodwill represents the excess of the cost of companies acquired over the fair
value of their net assets at the dates of acquisition and was being amortized
using the straight-line method over 15 years. Effective to the issuance of
FASB No. 142, the Company discontinued amortizing goodwill.

IMPAIRMENT
The Company follows Statement of Financial Accounting Standards No. 144,
Impairment of Long-lived Assets, by reviewing such assets for the impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.

INCOME TAXES
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. Effective to the June 13, 2001 acquisition, the weighted average
number of shares of common stock have been retroactively restated to give
effect for the 5.94 to 1 stock split.

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


                                      7

<PAGE>

                              APO  HEALTH,  INC.
                NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS


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
--------------------------------------------------------

                                               2002            2001
                                            ---------       ---------
     Cash Paid During the Year for:
          Interest                          $  96,126       $ 129,018
          Income Taxes                              -          65,000

     Common Stock Issued for Consulting
       and Professional Fees                  139,083
     Common Stock Issued in Acquisition
      of Envirotech                            30,000
     Common Shares returned to Treasury       134,050

NOTE  3  -  DISCONTINUED OPERATIONS
-----------------------------------

On February 1,2002, the Company sold the veterinary division of Universal for
$550,000 including the customer lists and catalogs. In addition the Company
sold its inventory related to the veterinary business. The Company wrote off
the remaining goodwill associated with the veterinary business. The financial
statements have been restated to reflect the results from the discontinued
operations in prior periods.(See Note 6).

NOTE  4  -  BANK NOTES PAYABLE
------------------------------

On April 2, 2001, the Company renewed its credit facility with HSBC Bank USA
that provides for total borrowings that may not exceed $2,000,000. Bankers
acceptances and letters of credit, which relate to specific importation
transaction, may not exceed $500,000 each and own-note borrowing, which does
not relate to specific transactions, may not exceed $1,500,000. The credit
facility is collateralized by substantially all of the Company's assets and is
personally guaranteed by the Company's two majority stockholders. Interest of
prime +1% on the own-note borrowings is payable monthly and the bankers
acceptance fees of 200 basis points above the discount rate are paid at the
inception of the bankers acceptance. Borrowings on the credit facility are
payable.


                                      8

<PAGE>

                              APO  HEALTH,  INC.
                NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

NOTE 4-BANK NOTES PAYABLE (CONTINUED)
-------------------------------------

on demand, or upon maturity, which is up to 180 days after the initiation of a
bankers acceptance or March 31, 2001, for own-note borrowings, whichever is
earlier.

Own-note borrowings was $1,500,000 as of June 30, 2002; acceptances totaled
$260,000.. ,. The credit facility has been extended through March 31, 2003


NOTE  5  -  RELATED PARTIES
---------------------------

Advances due to/from officers are non-interest bearing and due on demand.


NOTE  6  -  INCOME TAXES
------------------------

Income taxes (benefit) consist of the following:
                                            2002              2001
                                         ----------        ----------
     Continuing Operations               $   (2,685)       $   42,117
     Discontinued Operations                182,901            26,980
                                         $  180,216        $   69,097

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

                                            2002              2001
                                         ----------        ----------
     Computed at the federal
        statutory rate of 34%            $  173,828        $   45,058
     State income tax                        46,013            10,602
     Operating loss carryforward            (46,112)                -
     Other adjustments                        6,487.           13,437
                                         ----------        ----------
                                         $  180,216        $   69,097
                                         ----------        ----------
The components of deferred taxes are as follows:

                                            2002              2001
                                         ----------        ----------
     Deferred tax assets
        Allowance for doubtful accounts  $   10,730        $   11,000
        Depreciation                         10,172             8,500
        Net operating loss carryover              -            16,395
        Miscellaneous                             -.              125
                                         ----------        ----------
                                         $   20,902        $   36,020
                                         ----------        ----------


                                       9

<PAGE>

                              APO  HEALTH,  INC.
                NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

NOTE  7  -  COMMON STOCK ISSUANCES
----------------------------------

On November 28, 2001, the Company issued 463,610 shares of common stock, par
value $.0002, registered on Form S-8, to three consultants and an attorney for
the Company. The shares were valued at $.30 per share based on services to be
provided by the consultants and attorney.

On January1,2002 the Company issued 50,000 restricted shares of its common
stock in the acquisition of Envirotech.

In March 2002 several agreements with outside consultants were cancelled and
739,000 shares of common stock were returned ,which the Company is holding as
Treasury Stock. The Company recorded this transaction at the value of shares
originally issued.

NOTE  8  -  LEASE
-----------------

The Company leases approximately 11,800 square feet in New York on a
month-to-month basis with an affiliated company owned by two officers of the
Company. The affiliates lease underlying the New York lease expires on
December 31, 2004. Lease payments made by the Company approximate lease
payments by the affiliated company.

Future minimum lease payments are as follows:

     Year ended September 31,
     ------------------------
               2002                     $     8,750
               2003                          72,450
               2004                          74,900
               2005                          17,500
                                        -----------
                    Total               $   173,500
                                        -----------


NOTE  9  -  COMMITMENTS AND CONTINGENCIES
-----------------------------------------

There is an action pending in the Circuit/Superior Court of Marion County,
Indiana entitled Kenro, Inc., on behalf of itself and all other 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.


                                      10

<PAGE>

                              APO  HEALTH,  INC.
                NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS



LITIGATION (CONTINUED)
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.

EMPLOYMENT AGREEMENT
Effective October 1, 2001, the Company 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 bank accounts at several banks. As of March 31, 2002,
the Company had $344,524on deposit, in excess of the $100,000 limitation per
account insured under federal law.


                                      11

<PAGE>

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


RESULTS OF OPERATIONS
---------------------
The results of operations for the three and six months ended March 31, 2001
have been restated to reflect the sale of the veterinary division of
Universal.
Revenue for the nine months ended June 30, 2002 increased by $3,517,739 or
19.1% over the nine months ended June 30, 2001. The increase was due to an
increase in the sales to wholesalers and distributors while retail sales were
flat. As a result, the gross profit margin declined from 12.1% to 8.9%. For
the three months ended June 30, 2002, revenue increased by $2,191,652 or 33.5%
over the three months ended June 30,2001.The gross profit margin for the three
months ended, June 30,2002 was 7.0% compared to 15.9% for the three
monthsended June 30, 2001. Several factors contributed to the decline in the
gross profit margin in 2002 compared to 2001. The Company purchases goods from
sales in Europe and the dollar declined approximately 12% in 2002 causing the
cost of goods purchased to become more expensive in dollars .Due to the
competitive nature of the market the Company was unable to pass along the
increased cost of these products. The Company sold the veterinary division
which had higher gross profit margins than the wholesale business, but is
using the proceeds from the sale to expand its retail and institutional
medical division which should generate gross profits that will replace those
of the veterinary division. The Company expects the medical division revenues
to exceed those of the veterinary division that was sold.
Operating expenses including selling and general and administrative expenses
for the nine months ended June 30, 2002 were $1,866,860 a decrease of $161,237
or 7.9% compared to  the nine months ended June 30, 2001. Selling expenses
during the nine month period increased by approximately $98,000 or 19.6%.
Shipping expense increased by $30,000 , advertising increased by $34,000 and
commission increased by approximately $16,000 accounting for the majority
ofthe increase in selling expenses. General and Administrative expenses
decreased by approximately $259,000 in the nine months ended June 30, 2002
from the corresponding period in 2001. In 2001,bonuses to officers were
$86,400 to the reflect the value of stock issued to them. In 2002 there was a
bonus of $19,500, the net effect of these bonuses being a decrease of
approximately $67,000 in 2002. Other factors that contributed to the decrease
in general and administrative expense in 2002 were reductions in salaries and
other compensation of approximately $77,000, a reduction in office expenses of
$12,000, and a decrease in professional fees including accounting, consulting
, and legal fees of approximately $118,000.Accounting and legal fees would
have declined by an additional $35,000 which were the costs associated with
the Company's defense in its lawsuit and costs associated with by the Company
trying to increase its borrowing facilities. In 2001, the Company acquired a
public company and included in general and administrative were the cost
associated with becoming a reporting company and filing all necessary forms
with the Securities and Exchange Commission.


                                     12

<PAGE>

Interest expense for the nine months ended June 30, 2002 was $96,126, a
decrease of $32,892 compared to the nine months ended June 30, 2001. The
Company paid down a $500,000 term loan during the year ended March 31, 2002
and the interest rate on the line of credit decreased as the prime rate
decreased over the last twelve months.
On February 1, 2002,the Company sold the veterinary division of Universal
resulting in an after tax gain of $317,687 net of income taxes after giving
effect to a write-off of goodwill of $125,537.

FINANCIAL CONDITION
-------------------
As of June 30, 2002, the Company had current working capital of $1,404,501. In
addition, the Company has available approximately $240,000 in unused credit
facilities, including bankers acceptances and letters of credit. The Company
has issued a total of 3,703,634 common stock purchase warrants exercisable at
prices ranging from $.25 to $2.00 per share and 250,000 common stock purchase
warrants to Dr. Jan Stahl exercisable at $.25 per share. If these warrants are
exercised, the net proceeds to the Company would be in excess of $4,500,000.
These proceeds could be used for acquisitions and or major capital expansion.
At the current time, the Company has no immediate plans for a material
acquisition or major capital expenditures and, therefore, has sufficient
working capital for its current operations.


                                      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.


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.


                                      14

<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:     August  14, 2002              By:  /s/  Dr. Jan Stahl
                                             ------------------
                                        Dr. Jan Stahl, Chairman
                                        Chief Executive Officer
                                           And Secretary
                                        (Principal Executive Officer)



Date:     August  14, 2002              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:     August  14, 2002              By:  /s/  Dr. Jan Stahl
                                             ------------------
                                             Dr. Jan Stahl, Director



Date:     August  14, 2002              By:  /s/  Peter Steil
                                             ----------------
                                             Peter Steil, Director



Date:     August  14, 2002              By:  /s/  Kenneth Leventhal
                                             ----------------------
                                             Kenneth Leventhal, Director


                                      15