UNITED STATES
                       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, 2005

                                       OR

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

            From the transition period from __________ to ___________

                             Commissions file number


                                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)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 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

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act. Yes _____ No __X__

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of  common  stock,  as of the  latest  practicable  date:  As of May  10,  2005,
37,473,045 shares of Common Stock of the issuer were issued and outstanding.


<PAGE>

                                APO HEALTH, INC.

                            FORM 10-Q
                  QUARTER ENDED MARCH 31, 2005


                        TABLE OF CONTENTS
                        -----------------
<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<S>                                                                                               <C>
 PART I - Financial Information

          Item 1   Financial Statements.

                            Consolidated Balance Sheets as of
                            March 31, 2005 and September 30, 2004.                                 2

                            Consolidated Statements of Operations for the three and six
                            Months ended March 31, 2005 and 2004.                                  3

                            Consolidated Statements of Cash Flows for the
                            Six months ended March 31, 2005 and 2004.                              4

                            Notes to Consolidated Financial Statements.                          5 - 9

          Item 2            Management's Discussion and Analysis of Financial
                            Condition and Results of Operations                                 10 - 11

          Item 3            Quantitative and Qualitative Disclosures About
                            Market Risk                                                           12

          Item 4            Controls and Procedures                                               12

 PART II - Other Information

          Item 1            Legal Proceedings.                                                    12

          Item 2            Unregistered Sales of Equity Securities and Use of Proceeds.          13

          Item 3            Defaults upon Senior Securities.                                      13

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

          Item 5            Other Information.                                                    13

          Item 6            Exhibits                                                              13

 Signatures                                                                                       14
</TABLE>

                                       1
<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                                APO HEALTH, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                      March 31,         September 30,
                                                                        2005                 2004
                                                                 ---------------       ---------------
                                                                     (Unaudited)

                                     ASSETS
<S>                                                                     <C>                    <C>
Current Assets:
   Cash                                                          $      271,480        $      574,732
   Accounts Receivable, net of allowance
      for doubtful accounts of $360,000 and
     $380,000                                                           831,737             1,179,078
   Inventory                                                            652,572               583,040
   Other Current Assets                                                  98,626               186,274
                                                                 ---------------       ---------------
         Total Current Assets                                         1,854,415             2,523,124
                                                                 ---------------       ---------------
Property and Equipment, net of accumulated
   depreciation of $86,572 and $88,430                                    5,056                 8,124
Deposits                                                                  7,500                 7,500
                                                                 ---------------       ---------------
         Total Assets                                            $    1,866,971        $    2,538,748
                                                                 ===============       ===============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Bank Notes Payable                                            $      297,654        $      609,185
   Accounts Payable                                                     927,177             1,168,278
   Accrued Compensation                                                 100,818                89,224
   Customer Deposits                                                    288,629               259,675
                                                                 ---------------       ---------------
         Total Current Liabilities                                    1,614,278             2,126,362
                                                                 ---------------       ---------------
Stockholders' Equity:
   Common stock, $.0002 par value,
     125,000,000 shares authorized, 37,473,045
     and 35,673,045 shares issued and outstanding                         7,495                 7,135
   Paid-in Capital                                                    2,197,948             2,158,308
   Retained Earnings (Deficit)                                       (1,952,750)           (1,753,057)
                                                                 ---------------       ---------------
         Total Stockholders' Equity                                     252,693               412,386
                                                                 ---------------       ---------------
         Total Liabilities and Stockholders' Equity              $    1,866,971        $    2,538,478
                                                                 ===============       ===============
</TABLE>
                                       2
<PAGE>





                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       FOR THE THREE AND SIX MONTHS ENDED
                       MARCH 31, 2005 AND 2004 (UNAUDITED)
<TABLE>
<CAPTION>

                                                      Three Months                                  Six Months
                                                     -------------                                  ----------
                                               2005                    2004                 2005                 2004
                                         ---------------          ---------------      ---------------      ---------------
<S>                                           <C>                      <C>                  <C>                  <C>
Revenue                                  $    3,893,623           $   13,859,543       $    8,606,580       $   21,243,530
Cost of Revenue                               3,443,829               13,255,203            7,769,390           20,002,019
                                         ---------------          ---------------      ---------------      ---------------
Gross Margin                                    449,794                  604,340              837,190            1,241,511
                                         ---------------          ---------------      ---------------      ---------------
Operating Expenses
 Selling Expense                                 89,718                  210,766              212,929              374,611
 General and Administrative Expenses            419,443                  420,168              796,400              759,999
                                         ---------------          ---------------      ---------------      ---------------
                                                509,161                  630,934            1,009,329            1,134,610

Income (Loss) from Operations                   (59,637)                 (26,594)            (172,139)             106,901
                                         ---------------          ---------------      ---------------      ---------------
Other Income (Expense)
Recovery of Litigation Expense                        -                   92,755                    -               92,755
Interest Expense                                (13,648)                 (27,332)             (27,554)             (50,062)
                                         ---------------          ---------------      ---------------      ---------------
                                                (13,648)                  64,423              (27,554)              42,693
                                         ---------------          ---------------      ---------------      ---------------
Income (loss) before Provision for
Income Taxes                                    (73,015)                  37,829             (199,693)             149,594
Provision for Income Taxes                            -                       -                     -                    -
                                         ---------------          ---------------      ---------------      ---------------
Net Income                               $      (73,015)          $       37,289       $     (199,693)      $      149,594
                                         ===============          ===============      ===============      ===============
Basic and Diluted Earnings
   Per Common Share:
Total                                    $         (.00)          $          .00       $         (.01)      $          .00
                                         ===============          ===============      ===============      ===============
Weighted Average Common Shares
   Outstanding                               36,090,822               33,439,378           35,931,055           32,772,712
                                         ===============          ===============      ===============      ===============
</TABLE>

                                       3
<PAGE>
                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED
                       MARCH 31, 2005 AND 2004 (UNAUDITED)

<TABLE>
<CAPTION>

                                                                       2005                  2004
                                                                 ---------------       ---------------
<S>                                                                     <C>                  <C>
Cash Flow From Operating Activities:
Net Income                                                       $     (199,693)       $      149,594
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
Depreciation and Amortization                                             3,068                 4,940
Allowance For Doubtful Accounts                                         (20,000)                    -
Stock Issued for Services                                                40,000                     -
Changes In:
  Accounts Receivable                                                   367,341               232,701
  Inventory                                                             (69,532)           (1,272,239)
  Other Current Assets                                                   87,648                13,301
  Accounts Payable                                                     (241,101)              389,513
  Accrued Compensation                                                   11,594                  (788)
  Customer Deposits Payable                                              28,954               152,306
                                                                 ---------------       ---------------
Cash Flows Provided by (used for)
Operating Activities                                                      8,279              (330,672)
                                                                 ---------------       ---------------
Cash Flows From Investing Activities:
Notes Receivable                                                              -                 4,566
                                                                 ---------------       ---------------
Cash Flows Provided by Investing Activities                                   -                 4,566
                                                                 ---------------       ---------------

Cash Flows from Financing Activities:
Cash Overdraft                                                                -               186,651
                                                                 ---------------       ---------------
Proceeds (Payment) on Bank Notes Payable, Net                          (311,531)                3,089
                                                                 ---------------       ---------------
Cash Flows Provided by (used for)
Financing Activities                                                   (311,531)              189,740
                                                                 ---------------       ---------------
Net (Decrease) in Cash                                                 (303,252)             (136,366)

Cash Balances:
Beginning of Period                                                     574,732               405,153
                                                                 ---------------       ---------------
End of Period                                                    $      271,480        $      268,787
                                                                 ===============       ===============
</TABLE>

                                       4
<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 Company's  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 10-K containing the Company's audited financial  statements as of
and for the year ended September 30, 2004 filed with the Securities and Exchange
Commission.

The  results of  operations  for the six  months  ended  March 31,  2005 are not
necessarily  indicative  of results  expected for the entire  fiscal year ending
September 30, 2005.

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. 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 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.

Cash and cash  equivalents.  For purposes of the statements of cash flows,  cash
equivalents  include  all highly  liquid  investments  purchased  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 estimated useful life. The cost of maintenance and
repairs is expensed as incurred.

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.




                                       5
<PAGE>
                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.
<TABLE>
<CAPTION>

Note 2 - SUPPLEMENTAL CASH FLOW STATEMENT DISCLOSURES

                                                                       2005                  2004
                                                                 ---------------       ---------------
<S>                                                                      <C>                  <C>
Cash paid during the year for:
        Interest                                                 $       27,554            $   50,062

Non-cash transaction:
      Common Stock Issued for Professional Fees                  $       40,000

Note 3 - BANK NOTES PAYABLE

On October  29,  2002,  the Company  entered  into a  financing  agreement  with
Rosenthal & Rosenthal,  Inc. The financing agreement provided the Company with a
maximum credit facility not to exceed  $3,000,000.  The credit facility has been
amended by mutual  consent and reduced  the maximum  amount of credit  under the
facility to $500,000. 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% (8.25% as of March 31, 2005).  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.  The credit facility
provides that the Company maintain certain financial covenants.

Bank Notes Payable are as follows                                   March 31             September 30
                                                                     2005                   2004
                                                                 ---------------       ---------------
Own note borrowing                                               $      238,675        $      609,185
                                                                 ===============       ===============
Note 4 - INCOME TAXES

Income taxes (benefit) consist of the following:
                                                                     2004                   2003
                                                                 ---------------       ---------------
         Current                                                 $            -        $            -
         Utilization of net operating loss                                    -                     -
         Deferred                                                             -                     -
         Total                                                   $            -        $            -
</TABLE>


                                       6
<PAGE>

                                 APO HEALTH INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

                                                                     2004                     2003
                                                                 ---------------       ---------------
<S>                                                                    <C>                    <C>
         Computed at federal statutory rate of 34%               $            -        $            -
         State income tax                                                     -                     -
         Utilization of net operating loss                                    -                     -
                                                                 ---------------       ---------------
         Total                                                   $            -        $            -
                                                                 ---------------       ---------------
The components of deferred taxes are as follows:
                                                                    March 31,           September 30,
                                                                      2005                  2004
                                                                 ---------------       ---------------
         Deferred tax assets
            Allowance for doubtful accounts                      $      156,000        $      152,000
            Depreciation                                                 19,200                21,250
            Deferred Compensation                                        40,000                50,400
            Net operating loss carryover                                534,000               404,025
            Valuation allowance                                        (749,200)             (627,675)
                                                                 ---------------       ---------------
         Total Deferred tax asset                                $            -        $            -
                                                                 ===============       ===============
</TABLE>

The Company has a net operating  loss carryover of  approximately  $1,139,000 to
offset future  taxable  income.  The carryover  expires at various times through
2024. The Company has offset the deferred tax asset by a valuation  allowance of
$749,200, since it cannot be determined more likely than not whether the Company
will be able to utilize such net operating loss carryover.

Note 5 - COMMON STOCK

On March 8, 2005 and March 29,  2005,  the Company  issued a total of  1,700,000
shares of common stock to  professionals  and consultants for services  rendered
valued at $34,000.

In  October,  2004,  the  Company  issued  100,000  shares of common  stock to a
professional for services rendered valued at $6,000.

On January 29, 2004, the Company  entered into an Investment  Banking  agreement
with Sloan  Securities  Corp.  ("SSC") to provide  financing  and  advisory  and
investment  banking  services  for a  period  of one  year  from the date of the
agreement.  In  consideration  for  these  services,  the  Company  issued to an
affiliate  of SSC  2,000,000  share of  restricted  common  stock in the Company
valued at $120,000.  In January of 2004, the Company  authorized the creation of
3,500,000 bonus  compensation  warrants  exercisable at $0.025 per share, for an
exercise period of three years, to be issued to designated  recipients  approved
by the Board. On January 9, 2004, the Board authorized the issuance of 2,300,000
of  compensation  warrants to various  officers and  professionals  for services
rendered.

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. To date none of these shares have been issued.

On July 22, 2002 the Company issued a common stock purchase  warrant for 260,000
shares of common stock  exercisable at $.10 per share and on September 27, 2002,
a common stock  purchase  warrant for 1,875,000  shares  exercisable at $.04 per
share, both expiring on August 31, 2007.


                                       7
<PAGE>
                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 6 - LEASES

The Company's offices are located at 3590 Oceanside Road,  Oceanside,  New York.
The premises  contain  approximately  9,800 square feet under a five-year  lease
(the "Lease") which expired on November 30, 2004 (the "Lease  Term").  The Lease
Term has been extended for an additional  five years through  November 30, 2009.
These  premises  are  occupied  under a Lease  between the  landlord,  who is an
unaffiliated  third party, and an affiliated  company PJS Trading,  Corp., a New
York  corporation  ("PJS") owned by Dr. Stahl formed for the express  purpose of
entering  into the Lease.  The Company  occupies  these  premises  under an oral
agreement with PJS and Dr. Stahl whereby the Company has agreed to discharge all
of the Lease  obligations with the landlord.  The annual lease payment under the
new lease starts at  approximately  $77,300 per year and increases to $80,000 in
the fifth year with  additional  increases  for real estate taxes over the Lease
Term.  Neither PJS nor Dr. Stahl derives any profit from the Lease nor will they
during the balance of the Lease Term.  Management  of the Company  believes  the
current facility is adequate for its current  operations.  Effective December 1,
2004, the Company has subleased for a one year period approximately 2,000 square
feet of the warehouse space at  approximately  $30,000 per year.  Rental expense
net of subleases  was $22,290 and $26,156 for the six month  periods ended March
31, 2005 and 2004, respectively.

Future minimum lease payments are as follows:
For the years ended September 30,
                  2005                                    $       38,650
                  2006                                            70,571
                  2007                                            71,225
                  2008                                            75,825
                  2009                                            79,405
         After    2009                                            13,337
                                                          ---------------
                  Total                                   $      349,013
                                                          ---------------
Note 7 - COMMITMENTS AND CONTINGENCIES

Litigation

On or about July 7, 2004,  APO Health,  Inc.  was served with  process in a suit
commenced by The Proctor & Gamble  Company  ("P&G") in the US District Court for
the Eastern District of New York, against it


                                       8
<PAGE>
                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and a number of other  parties.  P&G  claimed  that APO,  as well as others were
involved in the sale of Pantene and Head and Shoulders  products  which were not
manufactured  by P&G. APO purchased  several  shipments of these products abroad
and unbeknownst to APO, some non P&G products were included in these  shipments.
APO has cooperated with P&G as well as the Federal  regulatory  agencies and has
supplied P&G with all of its documentation in order to assist P&G in its efforts
to remove these products from the  marketplace and to allow it to trace back the
source of these improper products. The lawsuit is seeking, among other relief, a
request for a temporary and permanent injunction from selling such products. The
Company  continues to cooperate with and assist the Federal Drug  Administration
("FDA") in its inquiry and has undertaken a voluntary  recall of these products.
As a result of APO's continuing cooperation with P&G and the FDA and its lack of
knowing  culpability,  its counsel  believes that this proceeding will terminate
without any adverse consequence to the Company.

On or about  December 3, 2004,  APO Health,  Inc.  and Dr. Jan Stahl were served
with process in a suit commenced by Alcoa, Inc. (Alcoa) in the US District Court
for the Eastern District of New York,  against it and a number of other parties.
Alcoa  claimed that APO, as well as others were involved in the sale of products
which were not manufactured by Alcoa. APO purchased  several  shipments of these
products abroad and unbeknownst to APO, some non Alcoa products were included in
these shipments. APO is cooperating with Alcoa as well as the Federal regulatory
agencies and is supplying Alcoa with all of its documentation in order to assist
Alcoa in its efforts to remove these products from the  marketplace and to allow
it to trace back the source of these improper products.  The lawsuit is seeking,
among other  relief,  a request for a temporary and  permanent  injunction  from
selling such  products.  The Company  continues to cooperate with and assist the
FDA in its inquiry and has undertaken a voluntary recall of these products. As a
result of APO's  continuing  cooperation  with Alcoa and the FDA and its lack of
knowing  culpability,  its counsel  believes that this proceeding will terminate
without any adverse consequence to the Company.

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  expired on September 30, 2004, and shall be automatically
renewed for  successive  periods of one year unless  either party gives  written
notice to terminate the agreement.

Product Liability

Certain of the  Company's  products  and proposed  products  will be utilized in
medical  procedures  where the Company  could be subject to claims from injuries
resulting  from  use of  the  Company's  products.  Recent  developments  in the
insurance  industry  have reduced the  availability  and  increased  the cost of
liability insurance  coverage.  At the present time, the Company is self-insured
for product liability claims.

Note 8 - 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,
2005,  the Company had  $310,987 on deposit,  in excess of the  $100,000 in each
bank, which is insured under federal law.

Note 9 - SUBSEQUENT EVENT

Subsequent  to March  31,  2005,  the Chief  Executive  Officer  of the  Company
converted $50,000 of deferred compensation into common stock.

                                       9
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

Forward-Looking Statements

     This  quarterly  report on Form 10-Q  contains  forward-looking  statements
within the meaning of the Private Securities Litigation Reform Act of 1995. This
Act  provides  a "safe  harbor"  for  forward-looking  statements  to  encourage
companies to provide  prospective  information  about themselves so long as they
identify these statements as forward looking and provide  meaningful  cautionary
statements  identifying  important  factors that could cause  actual  results to
differ from the  projected  results.  All  statements  other than  statements of
historical  fact made in this report are forward  looking.  In  particular,  the
statements herein regarding  industry prospects and future results of operations
or financial position are forward-looking statements. Forward-looking statements
reflect  management's  current  expectations and are inherently  uncertain.  The
Company's   actual   results   may  differ   significantly   from   management's
expectations.

Results of Operations

     Revenue  for the three  months  ended  March  31,  2005 was  $3,893,623,  a
decrease of  $9,965,920  or 71.9%,  compared to the three months ended March 31,
2004. Revenue for the six months ended March 31, 2005 was $8,606,580, a decrease
of $12,636,950,  or 59.5%,  compared to the six months ended March 31, 2004. The
Company lost two of its largest wholesale customers which totaled  approximately
$2,500,000 during the six month period ended March 31, 2005 due to the Alcoa and
Proctor & Gamble litigation.  In addition,  revenue was reduced by approximately
$7,800,000  which is attributable  to a reduction in the sale of health,  beauty
aids and other pharmaceutical products acquired from European vendors as margins
on these products  decreased due to the decline in the value of the U.S.  Dollar
against both the Euro and the British  Pound.  Where  product was  available for
sale but the margins were such that the Company  would not be able to generate a
profit, the Company declined to sell those products.

     As a result  of the  decrease  in  wholesale  revenue,  cost of goods  sold
associated with those sales also declined proportionately. Cost of sales for the
three months ended March 31, 2005 was $3,443,829,  a decrease of $9,811,374,  or
74.0%  compared to the three months ended March 31, 2004.  The cost of sales for
the six months ended March 31, 2005 was  $7,769,390,  a decrease of $12,232,629,
or 61.2%, compared to the six months ended March 31, 2004.

     Gross  profit  for the  three  months  ended  March 31,  2005 was  $449,794
compared to $609,340 for the three months ended March 31, 2004. The gross profit
for the six months ended March 31, 2005 was $837,190  compared to $1,241,511 for
the six months ended March 31, 2004.  Gross profit as a percentage  of sales was
11.6% for the three months  ended March 31, 2005  compared to 4.4% for the three
months ended March 31, 2004.  Gross profit as a percentage of sales was 9.7% for
the six months  ended March 31, 2005  compared to 5.8% for the six months  ended
March 31, 2004.  The  increased  in gross  profit as a percentage  of sales is a
result of the  Company's  change in strategy  away from  selling  very low gross
profit items. The Company is in the process of preparing a new medical catalogue
for medical  supplies.  It  anticipates  that this new catalogue will aid in the
increase of the sale of medical  supplies which have higher gross profit margins
than many of the other  products and increase the overall gross profit margin of
the Company.

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<PAGE>
     Selling expenses for the three months ended March 31, 2005 were $89,718,  a
decrease of $121,048, or 57.4%, compared to selling expenses of $210,766 for the
three  months ended March 31,  2004.  Selling  expenses for the six months ended
March 31, 2005 were  $212,929,  a decrease of  $161,682,  or 43.2%,  compared to
$374,611 for the six months ended March 31, 2004. As a direct  relationship with
the decrease in wholesale  revenue,  the Company  reduced costs  associated with
that  revenue as  follows:  freight  costs  decreased  by  $45,986,  commissions
decreased  by  $58,206,   and   advertising   and  related  costs  decreased  by
approximately  $29,687.  Other selling costs decreased by approximately  $27,803
Advertising  costs will increase when the Company  completes and distributes its
new medical supply catalogue.

     General and  administrative  expenses  for the three months ended March 31,
2005 were $419,443 compared to general and  administrative  expenses of $420,168
for the three months ended March 31, 2004. General and  administrative  expenses
for the six months ended March 31, 2005 were  $796,400 an increase of $36,401 or
4.2%  compared  to the six  months  ended  March  31,  2004.  There  were  three
categories  where general and  administrative  expenses  increased  from the six
months ended March 31, 2004. Bad debt expenses increased by $4,004 as additional
reserves  were taken due to write off of  receivables  against the  allowance of
approximately  $121,000 with an increase in the reserve of $125,000,  consulting
increased by $58,000 (the consulting  agreement ended in January 2004) and legal
expenses related to the Alcoa and Proctor & Gamble  litigation was approximately
$68,000.   These  three   categories   accounted   for  increases  of  $160,004.
Compensation and related employee  expenses  decreased by $59,244 as the Company
reduced the number of full time  personnel  by two persons.  Other  professional
fees decreased by approximately $22,000 and bank fees decreased by approximately
$15,000 as the Company reduced the availability on the line of credit. All other
general and administrative expenses decreased by approximately $30,000.

     Interest  expense  for the three  months  ended  March 31, 2005 was $13,648
compared to interest  expense of $27,332  for the three  months  ended March 31,
2004.  Interest  expense for the six months ended March 31, 2005 was $27,554,  a
decrease of $22,508 from the six month period ended March 31, 2004.  The Company
has reduced the average amount of borrowing on its line of credit with Rosenthal
& Rosenthal, Inc. by approximately 50%.

Financial Condition, Liquidity and Capital Resources

     As of March 31, 2005,  The Company had net working  capital of $280,137,  a
decrease of $116,625 from  September 30, 2004 as a result of the net loss during
the period.  At March 31, 2005,  the Company had a $500,000  credit  facility of
which approximately $205,000 not being used.

     Exclusive of the increase in bad debt expense,  legal  expenses  related to
the Alcoa and  Proctor & Gamble  litigations  and the  expiration  of a one year
consulting  agreement in January 2004, the Company reduced selling,  general and
administrative  expenses by  approximately  $290,000 during the six months ended
March 31, 2005.  +The Company has also  increased  the gross profit  margin from
5.8% to 9.7%.

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

Off-Balance Sheet Arrangements

     The  Company  does not have any  off-balance  sheet  arrangements  that are
likely to have a current or future effect on the Company's financial  condition,
revenues or expenses, results of operations or capital resources.


                                       11
<PAGE>
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Exchange Rate Risk.  The products  distributed  by the Company are, for the
most part,  manufactured  by third parties in the United  States,  the Far East,
Mexico  and  Canada.  As a result,  the  Company's  financial  results  could be
affected by factors such as changes in foreign  currency  exchange rates or weak
economic conditions in foreign markets. The Company has virtually eliminated its
purchases  from Europe as the cost of products have increased  substantially  as
the value of the U.S.  Dollar has declined  substantially  against both the Euro
and the British Pound.

     Credit  Risk.  The Company  maintains  cash  balances at various  financial
institutions. At times, such balances exceed the insured limits of the financial
institution.  To date,  the  Company  has not  experienced  any  losses  in such
accounts. As of March 31,2005, the Company had $310,987 on deposit, in excess of
the $100,000 in each bank, which is insured under federal law.

ITEM 4.  CONTROLS AND PROCEDURES.

     As of the end of the period covered by this report,  the Company  conducted
an evaluation, under the supervision and with the participation of its principal
executive officer and principal financial officer,  of the Company's  disclosure
controls and  procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the
Exchange Act). Based upon this  evaluation,  the Company's  principal  executive
officer and principal financial officer concluded that the Company's  disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  by the  Company in the  reports  that it files or  submits  under the
Exchange Act is recorded,  processed,  summarized and reported,  within the time
periods  specified in the Commission's  rules and forms.  There was no change in
the  Company's  internal  controls or in other  factors  that could affect these
controls during the Company's last fiscal quarter that has materially  affected,
or is reasonably  likely to materially  affect,  the Company's  internal control
over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     On or about  July 7, 2004,  a suit was  commenced  by the  Proctor & Gamble
Company ("P&G") in the United States District Court for the Eastern  District of
New  York,  naming  APO  Health,  Inc.  [(New  York)  "APO-NY"],  the  Company's
subsidiary, together with others as parties defendant. P&G claims that APO-NY as
well as others were involved in the sale of  counterfeit  Head and Shoulders and
Pantene  products.  APO-NY  denies  any  improper  conduct  nor  involvement  in
importing of counterfeit  products;  no documentation has been produced to date,
indicating  that any of the Pantene or Head and Shoulders  products which APO-NY
imported  were other than  genuine.  The  Company  has been  actively  defending
against  this  claim  while  cooperating  with  both P&G as well as the  federal
regulatory  agencies and has supplied P&G with all of its documentation in order
to  assist  P&G in its  efforts  to remove  any  counterfeit  products  from the
marketplace.  This  lawsuit is  seeking,  among  other  relief,  a request for a
permanent  injunction  from selling  counterfeit  Pantene and Head and Shoulders
products. The suit also seeks damages.

     On or  about  December  3,  2004,  APO-NY  as well as Dr.  Jan  Stahl,  the
Company's  President,  were  served  with  process  in a suit  by  Alcoa,  Inc.,
("Alcoa"),  also in the United States District Court for the Eastern District of
New York. In that suit, Alcoa alleges that APO-NY as well as others imported and
sold  counterfeit  Reynolds Wrap Aluminum  foil.  The Company and Dr. Stahl have
denied these claims and are actively defending against these charges.  This suit
seeks,  among other  relief,  a request for a  permanent  injunction  as well as
damages.  APO has not  received  any  documentation  which  would  show that the
Reynolds Wrap which it purchased was not genuine. APO and Dr. Stahl are actively
defending this action.


                                       12
<PAGE>
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

ITEM  4. SUBMISSION  OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

ITEM 5.  OTHER INFORMATION.

         None.

ITEM 6.  EXHIBITS.

Exhibit
Number                            Description
--------- ----------------------------------------------------------------------
31.1      Certification by Chief Executive Officer and Chief Financial  Officer,
          required by Rule  13a-14(a) or Rule  15d-14(a)  of the  Exchange  Act,
          promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1      Certification by Chief Executive Officer and 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,
          promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                       13
<PAGE>
                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                       APO HEALTH, INC.

Date:    May 23, 2005                  By:  /s/ Jan Stahl
                                            --------------
                                       Dr. Jan Stahl, Chairman
                                       Chief Executive Officer, Principal
                                       Financial Officer, Principal Accounting
                                       Officer and Secretary


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