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 December 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 February  1, 2004,  32,106,045  shares of Common  Stock of the issuer were
issued.

<PAGE>

                                APO HEALTH, INC.

                                    FORM 10-Q
                         QUARTER ENDED DECEMBER 31, 2003

                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----
PART I - Financial Information

   Item 1  Financial Statements.

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

           Consolidated Statement of Income for the three
           months ended December 31, 2003 and 2002.                         4

           Consolidated Statement of Cash Flows for the
           three months ended December 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


                                      - 2 -

<PAGE>

                         PART I - FINANCIAL INFORMATION

                                APO HEALTH, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                       December 31,   September 30,
                                                          2003            2003
                                                       -----------     -----------
                                                       (Unaudited)
<S>                                                    <C>             <C>
                        ASSETS
Current Assets:
   Cash                                                $    28,473     $   405,153
   Accounts Receivable, net of allowance
      for doubtful accounts of $50,000 and $50,000       2,033,903       1,702,741
   Inventory                                             1,790,934       1,396,205
   Note receivable                                           3,796           4,566
   Due from Officers                                       108,905         108,905
   Other Current Assets                                     60,464          55,013
                                                       -----------     -----------
         Total Current Assets                            4,026,475       3,672,583

Property and Equipment, net of accumulated
   depreciation of $76,096 and $98,992                      15,533          18,003
Deposits                                                     7,500           7,500
                                                       -----------     -----------
         Total Assets                                  $ 4,049,508     $ 3,698,086
                                                       ===========     ===========

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Bank Notes Payable                                  $ 1,388,118     $ 1,008,123
   Accounts Payable                                        529,745         924,029
   Deferred Compensation                                   250,440         248,483
   Customer Deposits                                       547,576         294,587
                                                       -----------     -----------
         Total Current Liabilities                       2,715,879       2,475,222
                                                       -----------     -----------

Stockholders' Equity:
Common stock, $.0002 par value,
     125,000,000 shares authorized, 32,106,045
     and 32,106,045 shares issued and outstanding            6,325           6,325
   Paid-in Capital                                       1,920,768       1,920,768
   Retained Earnings (Deficit)                            (593,464)       (704,229)
                                                       -----------     -----------
         Total Stockholders' Equity                      1,333,629       1,222,864
                                                       -----------     -----------
         Total Liabilities and Stockholders' Equity    $ 4,049,508     $ 3,698,086
                                                       ===========     ===========
</TABLE>


                                      - 3 -

<PAGE>

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

                                                      2003              2002
                                                 ------------      ------------
Revenue                                          $  7,389,987      $ 11,664,766
Cost of Revenue                                     6,746,816        11,105,136
                                                 ------------      ------------
Gross Margin                                          637,171           559,630
                                                 ------------      ------------

Operating Expenses
   Selling Expense                                    163,845           156,099
   General and Administrative Expenses                339,831           326,860
                                                 ------------      ------------
                                                      503,676           482,959
                                                                   ------------

Income from Operations                                133,495            76,671
Interest Expense                                      (22,730)          (27,126)
                                                 ------------      ------------
Income before Provision for Income Taxes              110,765            49,545
Provision for Income Taxes                                 --            19,818
                                                 ------------      ------------

Net Income                                       $    110,765      $     29,727
                                                 ============      ============

Basic and diluted
Earnings per common share                        $       .003      $       .001
                                                 ============      ============

Weighted Average Common Shares
   Outstanding                                     32,106,045        24,554,227
                                                 ============      ============


                                      - 4 -

<PAGE>

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

                                                        2003            2002
                                                    -----------     -----------
Cash Flow From Operating Activities:
Net Income                                          $   110,765     $    29,727
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
   Depreciation and Amortization                          2,470           2,624
   Deferred Taxes                                            --          19,818
Changes In:
   Accounts Receivable                                 (331,162)     (1,028,167)
   Inventory                                           (394,729)        538,667
   Other Current Assets                                  (5,451)          7,263
   Accounts Payable                                    (394,284)        354,611
   Accrued Expenses                                       1,957         (85,485)
   Customer Deposits                                    252,989        (431,330)
                                                    -----------     -----------

Cash Flows from Operating Activities                   (757,445)       (592,272)
                                                    -----------     -----------

Cash Flows from Investing Activities:
Reduction in Notes Payable                                  770          99,458
                                                    -----------     -----------

Cash Flows from Financing Activities                        770          99,458
                                                    -----------     -----------

Cash Flows from Financing Activities:
Proceeds (Payment) on Bank Notes Payable, Net           379,995         430,776
                                                    -----------     -----------
Cash Flows from Financing Activities                    379,995         430,776
                                                    -----------     -----------

         Net Increase (Decrease) in Cash               (376,880)        (62,048)
                                                    -----------     -----------

Cash Balances:
Beginning of Period                                     405,153         520,618
                                                    -----------     -----------

End of Period                                       $    28,473     $   458,570
                                                    ===========     ===========


                                      - 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, 2003 filed with the Securities and Exchange
Commission.

The results of operations  for the three months ended  December 31, 2003 are not
necessarily  indicative  of results  expected  for the entire  fiscal year ended
September 30, 2004.

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
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,
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.

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


                                       -6-

<PAGE>

                                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.

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              2002
                                                    ----------        ----------
Cash paid during the year for:
         Interest                                   $   22,730        $   27,126
         Income taxes                                       --                --

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.

Bank Notes Payable of the following:

                                                   December 31,    September 30,
                                                       2003            2003
                                                   ------------    -------------

Own Note Borrowing                                  $1,388,118      $1,008,123


                                       -7-

<PAGE>

                                 APO HEALTH INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - INCOME TAXES

Income taxes (benefit) consist of the following:

                                                           2003           2002
                                                          -------        -------
         Current                                          $    --        $    --
         Deferred                                              --         19,818
                                                          -------        -------
         Total                                            $19,818        $12,637
                                                          =======        =======

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

                                                             2003         2002
                                                           --------     --------
         Computed at federal statutory rate of 34%         $ 37,653     $ 16,845
         State income tax                                     6,645        2,973
         Valuation allowance adjustment                     (44,298)          --
         Other adjustments                                       --           --
                                                           --------     --------
         Total                                             $     --     $ 19,818
                                                           ========     ========

The components of deferred taxes are as follows:

<TABLE>
<CAPTION>
                                                        December 31,  September 30,
                                                            2003          2003
                                                        ------------  -------------
<S>                                                       <C>          <C>
         Deferred tax assets
            Allowance for doubtful accounts               $ 20,000     $ 20,000
            Depreciation                                    12,000       12,000
            Net operating loss carryover, less
         Valuation allowance of $176,900 and $221,200           --           --
         Reversal of valuation allowance                   (32,000)     (32,000)
                                                          --------     --------
         Total deferred tax assets                              --           --
         Less Current Portion
                                                          --------     --------
         Non current deferred tax asset                          $            $
                                                          ========     ========
</TABLE>

The Company has a net  operating  loss  carryover of  approximately  $265,000 to
offset future taxable income. The carryover expires 2018. The Company has offset
the deferred tax asset by a valuation allowance of $176,900,  since it cannot be
determined more likely than not whether the Company will be able to utilize such
net operating loss carryover.


                                       -8-

<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - 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. 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.

Stock Options

In April,  2001,  investors in a private placement  received warrants to acquire
1,500,000  shares of Common stock at $1.00 per share.  These warrants  expire on
April 24, 2004. To date none of these warrants have been exercised.

In June,  2001,  consultants  received  warrants to acquire  1,350,000 shares of
Common stock at prices  ranging from $1.00 to $2.00 that expire on September 14,
2004. To date none of these warrants have been exercised.

In June,  2001. a consultant  received  warrants to acquire  1,000,000 shares of
Common stock at prices  ranging from $1.00 to $2.00 that expire on June 5, 2006.
To date none of these warrants have been exercised.

Note 6 - LEASES

The  Company  leases  12,000  square  feet  in  New  York.  The  lease  is  on a
month-to-month  basis with an affiliated company 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.  On December 1, 2002 the Company  entered into a sublease
agreement  to lease  approximately  2,000 square feet of its  warehouse  through
November 30, 2005.

Future minimum lease payments are as follows:

   Year ended December 31, 2004                                  $74,900


                                       -9-

<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note  7 -  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., 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.

On  July1,   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.

On January 28, 2004,  the Company  announced that it had reached an out of court
settlement in the unsolicited  broadcast fax class action lawsuit by Kenro, Inc.
Details of the  settlement  will be approved by the court which must approve the
settlement before it becomes final.  Mediation in this matter was ordered by the
court.


                                      -10-

<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Litigation (continued)

The Company's  attorneys  agreed to settle the litigation for up to $4.5 million
which will be placed in a settlement fund created and completely  covered by the
Company's  insurer.  Once approved by the court,  notice of  settlement  will be
faxed to a list of fax numbers  belonging to the class action  plaintiffs.  As a
result of the  settlement,  if approved,  the Company will have no out of pocket
expenses related to the creation or management of the Settlement Fund.

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 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 December 30,
2003,  the Company had  $123,000 on deposit,  in excess of the  $100,000 in each
bank, 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 three months ended December 31, 2003 was $7,389,987  compared to
$11,664,776  for the three months ended  December  31,  2002.  This  decrease of
$4,274,779  or 36.6%  was a result  of a large  decrease  in sales to  wholesale
distributors.  The Company  reduced sales of items which were  generating  gross
margins of 1.0% to 1.5 % as it searched for new sources for these products which
would generate a higher gross margin.

Cost of revenue for the three  months  ended  December  31, 2003 was  $6,746,816
compared to $11,105,136 for the three months ended December 31, 2002. This was a
decrease  in cost of  revenue of  $4,358,320  or 39.9%.  As a result,  the gross
margins increased to 8.6% from 4.8%, an improvement of approximately  80.0%. The
Company  reduced its reliance on low gross profit margin items and  concentrated
more on its retail  dental  supply  sales and  medical  supply  sales which have
higher gross profit  margins.  The Company  expects medical sales to rise at the
end of the next quarter when it releases its new  catalogue at the end of March,
2004 or the beginning of April, 2004.

Selling  expenses  for the three months  ended  December 31, 2003 were  $163,845
compared to $156,099 for the three months ended  December 31, 2002,  an increase
of $7,746 or 5.0%. Categories of selling expenses, which showed increases,  were
shipping  ($14,189),  commissions  ($29,133),  and telephone  expense  ($2,950).
Categories  of  selling   expenses  which  showed   decreases  were  advertising
($19,855),  postage and mailing ($9,327) and travel and entertainment  ($9,313).
The large  increase in commissions  were a result of sales  generated by outside
sources.  The advertising  expense decrease was due to the elimination of faxing
to  customers  and that the new  medical  catalogue  has not yet been  released.
Postage and mailing  decreased  because the new  catalogue was not yet available
for distribution.  The Company also reduced travel and entertainment  expense as
the sales  personnel  spent more effort on the phone  rather than  meeting  with
customers.

General and administrative expenses for the three months ended December 31, 2003
were $339,831 compared to $326,860 for the three months ended December 31, 2002,
an increase of $12,971 or 4.0%. Total  compensation  including payroll taxes and
medical  benefits  increased by $8,916 which was the largest increase in general
and administrative  expenses.  Costs associated with the new filing requirements
of the Sarbanes-Oxley Act of 2002 increased professional and accounting expenses
by  approximately  $7,500.  All other  categories of general and  administrative
expenses had minor increases or decreases.

Interest  expense  for the three  months  ended  December  31,  2003 was $22,730
compared  to $27,126 to the three  month  period  ended  December  31,  2002,  a
decrease  of $4,396 as the  average  daily  balance  outstanding  on its line of
credit decreased from the prior years period.


                                      -12-

<PAGE>

Liquidity and Capital Resources

As of December 31, 2003, the Company had net working capital of $1,3910,596,  an
increase of $113,235  from  September  30,  2003,  as a result of the net income
generated during the period.  At December 31, 2003, the Company had a $3,000,000
credit  facility of which  approximately  $1,620,000  was unused which gives the
Company the ability to finance additional revenue and inventory.

For fiscal 2004, the Company has reduced its budget for both selling and general
and administrative  expenses by approximately  $250,000 eliminating  unnecessary
expenses and revising some of the operations.  In addition,  the Company expects
that  consulting  fees which were  non-recurring  items will be eliminated.  The
above  reductions  will  increase the Company's  profitability  based on 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.

On  July1,   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.

On January 28, 2004,  the Company  announced that it had reached an out of court
settlement in the unsolicited  broadcast fax class action lawsuit by Kenro, Inc.
Details of the  settlement  will be approved by the court which must approve the
settlement before it becomes final.  Mediation in this matter was ordered by the
court.

<PAGE>

The Company's  attorneys  agreed to settle the litigation for up to $4.5 million
which will be placed in a settlement fund created and completely  covered by the
Company's  insurer.  Once approved by the court,  notice of  settlement  will be
faxed to a list of fax numbers  belonging to the class action  plaintiffs.  As a
result of the  settlement,  if approved,  the Company will have no out of pocket
expenses related to the creation or management of the Settlement Fund.

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: February 5, 2004                  By: /s/  Dr. Jan Stahl
                                           -------------------------------------
                                           Dr. Jan Stahl, Chairman
                                           Chief Executive Officer
                                           And Secretary
                                           (Principal Executive 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: February 5, 2004                  By: /s/  Dr. Jan Stahl
                                           -------------------------------------
                                           Dr. Jan Stahl, Director


Date: February 5, 2004                  By: /s/  Kenneth Leventhal
                                           -------------------------------------
                                           Kenneth Leventhal, Director


                                      -15-