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 December 31, 2004

                                       OR

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

            From the transition period from __________ to ___________

                        Commission file number 000-30074



                                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 by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the preceding 12 months (or for such shorter  period of time 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]

     As of February  8, 2005,  35,773,045  shares of Common  Stock of the issuer
were issued and outstanding.


<PAGE>



                                APO HEALTH, INC.
                                    FORM 10-Q
                         QUARTER ENDED DECEMBER 31, 2004


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                 Page
         PART I - Financial Information

<S>                                                                                              <C>
         Item 1            Financial Statements.

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

                           Consolidated Statements of Income for the three
                           months ended December 31, 2004 and 2003.                               3

                           Consolidated Statements of Cash Flows for the
                           three months ended December 31, 2004 and 2003.                         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                        11
                           Market Risk.

         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.

<TABLE>
<CAPTION>

                                APO HEALTH, INC.
                           CONSOLIDATED BALANCE SHEET

                                                                    December 31,             September 30,
                                                                      2004                       2004
                                                                  ---------------            --------------

                                                                     (Unaudited)
                                     ASSETS
<S>                                                                    <C>                        <C>
Current Assets:
   Cash                                                            $     339,487              $    574,732
   Accounts Receivable, net of allowance for
   doubtful accounts of $430,000 and $380,000                            805,174                 1,179,078
   Inventory                                                             545,936                   583,040
   Other Current Assets                                                  118,910                   186,274
                                                                   --------------            --------------
         Total Current Assets                                          1,809,507                 2,523,124
                                                                   --------------            --------------

Property and Equipment, net of accumulated
   Depreciation of $89,963 and $88,430                                     6,591                     8,124
Deposits                                                                   7,500                     7,500
                                                                   --------------            --------------
         Total Assets                                              $   1,823,598               $ 2,538,748
                                                                   ==============            ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Bank Notes Payable                                              $     238,675              $    609,185
   Accounts Payable                                                      899,088                 1,168,278
   Deferred Compensation                                                  89,223                    89,224
   Customer Deposits                                                     305,903                   259,675
                                                                   --------------             -------------
         Total Current Liabilities                                     1,532,889                 2,126,362
                                                                   --------------             -------------
Stockholders' Equity:
   Common stock, $.0002 par value,
     125,000,000 shares authorized, 35,773,045
     and 35,673,045 shares issued and outstanding                          7,155                     7,135
   Paid-in Capital                                                     2,164,288                 2,158,308
   Retained Earnings (Deficit)                                        (1,880,734)               (1,175,057)
                                                                   --------------             -------------
         Total Stockholders' Equity                                      290,709                   412,386
                                                                   --------------             -------------

         Total Liabilities and Stockholders' Equity                $   1,823,598               $ 2,538,748
                                                                   ==============             =============
</TABLE>

                                       2
<PAGE>

                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                           FOR THE THREE MONTHS ENDED
                     December 31, 2004 AND 2003 (UNAUDITED)

<TABLE>
<CAPTION>

                                                                              Three Months

                                                                       2004                       2003
                                                                   --------------            --------------

<S>                                                                      <C>                       <C>
Revenue                                                             $  4,711,957              $  7,389,987
Cost of Revenue                                                        4,325,561                 6,746,816
                                                                   --------------            --------------
Gross Margin                                                             386,396                   637,171
                                                                   --------------            --------------

Operating Expenses
   Selling Expense                                                       123,211                   163,845
   General and Administrative Expenses                                   376,957                   336,831
                                                                   --------------            --------------
                                                                         500,168                   503,676
                                                                   --------------            --------------

Income (loss) from Operations                                           (113,172)                  133,495

Interest Expense                                                          13,906                    22,730
                                                                   --------------            --------------

Income (loss) before Provision for
 Income Taxes                                                           (127,678)                  110,765
 Provision for (Recovery of)
Income Taxes                                                                   -                         -
                                                                   --------------            --------------

Net Income                                                          $   (127,678)              $   110,765
                                                                   ==============            ==============

Basic and Diluted Earnings
   Per Common Share:                                                       $(.00)                     $.00
                                                                   ==============            ==============
Weighted Average Common Shares
   Outstanding                                                        35,768,601                32,106,045
                                                                   ==============            ==============
</TABLE>

                                       3
<PAGE>

                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                           FOR THE THREE MONTHS ENDED
                     December 31, 2004 AND 2003 (UNAUDITED)

<TABLE>
<CAPTION>

                                                                        2004                      2003
                                                                   --------------            --------------

<S>                                                                      <C>                       <C>
Cash Flow from Operating Activities:
Net Income (Loss)                                                  $    (127,678)            $      12,616
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
Depreciation and Amortization                                              1,533                     7,872
Stock Issued for Services                                                  6,000                   151,477
Allowance for Doubtful Accounts                                           50,000                    20,000
Changes In:
  Accounts Receivable                                                    323,904                (2,669,109)
  Other Receivables                                                            -                   168,350
  Inventory                                                               37,104                   619,010
  Other Current Assets                                                    67,364                   (62,516)
  Accounts Payable                                                      (269,190)                2,188,803
  Accrued Expenses                                                             -                   151,274
  Customer Deposits Payable                                               46,228                  (488,012)
                                                                   --------------            --------------
Cash Flows from Operating Activities                                     135,265                    99,765
                                                                   --------------            --------------

Cash Flows from Financing Activities:
Advances from Officers, Net                                                    -                   (15,000)
Proceeds (Payment) on Bank Notes Payable, Net                           (370,510)                 (562,814)
                                                                   --------------            --------------
Cash Flows from Financing Activities                                    (370,510)                 (525,704)
                                                                   --------------            --------------

Net (Decrease) in Cash                                                  (235,245)                 (425,939)

Cash Balances:
Beginning of Period                                                      574,732                   520,618
                                                                   --------------            --------------
End of Period                                                      $     339,487             $      94,679
                                                                   ==============            ==============
</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.  Further,  in the
opinion of  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 three months ended  December 31, 2004 are not
necessarily  indicative  of results to be  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  and  medical
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 with original  maturities of
three months 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.

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 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
<TABLE>
<CAPTION>

                                                                       2004                       2003
                                                                    ------------               -----------
<S>                                                                      <C>                      <C>
Cash paid during the year for:
        Interest                                                     $    13,906                $   22,730

Non-cash transaction:
      Common Stock Issued for  Professional Fees                     $     6,000
</TABLE>

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.  On  September 1, 2004 the
credit  facility was amended by mutual consent and reduced the maximum amount of
credit under the facility to $1,000,000.  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% (7.75% as of December  31,  2004).
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.
<TABLE>
<CAPTION>

Bank Notes Payable are as follows                                     December 31               September 30
                                                                          2004                     2004
                                                                          ----                     ----
<S>                                                                <C>                       <C>
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:
                                                                     December 31,             September 30,
                                                                          2004                     2004
                                                                   --------------            --------------
         Deferred tax assets
            Allowance for doubtful accounts                        $     172,000             $     152,000
            Depreciation                                                  20,000                    21,250
            Deferred Compensation                                         50,400                    50,400
            Net operating loss carryover                                 430,425                   404,025
            Valuation allowance                                         (672,825)                  (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
$672,825, 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

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  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 warrants 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 5 - COMMON STOCK (continued)

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

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  $50,261,  $59,429 and $73,881 for each of the three years
ended September 30, 2004.

Future minimum lease payments are as follows:
For the years ended September 30,
                  2005                                         $  70,411
                  2006                                            70,571
                  2007                                            71,225
                  2008                                            75,825
                  2009                                            79,405
             After  2009                                          13,337
                                                                --------
                  Total                                         $380,774
                                                                --------

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 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

                                       8
<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 - COMMITMENTS AND CONTINGENCIES (continued)

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 Food and 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 them 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.

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 31,
2004,  the Company had  $321,805 on deposit,  in excess of the  $100,000 in each
bank, which is insured under federal law.

                                       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 December 31, 2004 was $4,477,957,  a decrease
of $2,627,030, or 36.2%, from $7,389,987 for the three months ended December 31,
2003.  There were several  factors which  contributed to the decline in revenue.
(1) The Company no longer conducted  business with several  wholesale  customers
that were sold products  that were  subsequently  determined to be  counterfeit.
Sales to these  customers for the quarter ended December 31, 2003 were in excess
of $1,300,000. (2) A second factor which contributed to the reduction in revenue
was the cost of products  that the Company had  previously  imported from Canada
and Europe increased  substantially because of the United States dollars decline
against  those  currencies.  The  Company  was  unable  to pass  along any price
increase,  and,  therefore  reduced or  eliminated  purchases  of many  imported
products

The Company is in the process of preparing a new catalogue for medical supplies.
The  distribution  of the  catalogue  has been  delayed into the second or third
quarter of fiscal 2005. The Company  anticipates  that with the  distribution of
this new catalogue,  sales of medical supplies will increase.  The gross profits
on  products  included  in the  catalogue  are a  minimum  of 20% to 25% and any
increase in revenue will increase the overall profit margins of the Company.

Cost of revenue for the three months ended December 31, 2004 were $4,432,561,  a
decrease of  $2,421,225,  or 35.9%,  from  $6,746,816 for the three months ended
December  31,  2003.  The  decrease in cost of sales is  proportionate  with the
decrease in revenue  described above. The gross profit  percentage for the three
months ended  December  31, 2004 was 8.2%  compared to 8.6% for the three months
ended  December  31,  2003.  The lower gross  profit  percentage  is a result of
increased costs that the Company was unable to pass on to customers.

Selling  expenses for the three months ended December 31, 2004 were $123,211,  a
decrease of $40,634 from the three months ended  December 31, 2003.  Commissions
decreased by  approximately  $17,000 for the quarter ended December 31, 2004 due
to the decrease in revenue from  wholesale  customers.  Advertising  and related
costs declined by  approximately  $19,000 as the Company  reduced its mailing of
advertising materials. There were minor increases and decreases in other selling
expenses that resulted in an overall  decrease which was directly related to the
decrease in revenue.

                                       10
<PAGE>
General and administrative expenses for the three months ended December 31, 2004
were  $376,957,  an increase of $40,126 from $336,831 for the three months ended
December 31, 2003.  Total  compensation,  including  payroll  taxes and employee
benefits, decreased by $27,100 as the Company reduced salaries for its executive
officers and other salaried individuals to reduce costs.  Consulting fees, under
an agreement entered into in January 2004, were $30,000. There was no comparable
cost in 2003.  The  consulting  agreement  expired in January 2005.  The Company
reserved an  additional  $50,000 to its  allowance  for bad debts in the quarter
ended December 31, 2004. There was no comparable cost in 2003.  Banking fees and
credit card  processing fees decreased in the quarter ended December 31, 2004 by
approximately  $12,000  as it  reduced  the  available  line of credit  with its
lender.  There  were minor  increases  or  decreases  in all other  general  and
administrative expenses.

Interest  expense for the three  months ended  December 31, 2004 was $13,905,  a
decrease of $8,824 from the  three-month  period ended  December  31, 2003.  The
decrease in interest  expense is due to a reduction of the credit  facility with
Rosenthal & Rosenthal, Inc. which reduced the Company's monthly minimum interest
expense.

Liquidity and Capital Resources

As of December 31,  2004,  the Company had net working  capital of  $276,618,  a
decrease of $120,144  from  September  30, 2004.  The Company has  approximately
$750,000  of  financing  available  under  a  $1,000,000  credit  facility  with
Rosenthal & Rosenthal, Inc. to finance additional receivables and inventory. The
term of the credit facility expires on October 31, 2005 and may be extended on a
year to year basis thereafter unless it is terminated.

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

During the past year,  because of the decrease in the exchange  rate of the U.S.
dollar  against the Euro and Canadian  dollar,  the Company has not been able to
purchase merchandise at favorable prices from distributors in Europe and Canada.
In  addition,  other  product  lines are no longer  accessible  to the  Company.
Consequently, the Company's sales of products has decreased.

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.

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.

     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 December  31,  2004,  the Company had  $321,805 on deposit,  in
excess of the $100,000 in each bank, which is insured under federal law.

                                       11
<PAGE>

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,  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 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 Food and  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 them 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  suppying  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.


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

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

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.

          31.1      Certification by Dr. Jan Stahl,  Chief Executive Officer and
                    Chief  Financial  Officer,  pursuant  to Section  302 of the
                    Sarbanes-Oxley Act of 2002.
          32.1      Certification by Dr. Jan Stahl,  Chief Executive Officer and
                    Chief  Financial  Officer,  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: February 14, 2005                   By:       /s/ Dr. Jan Stahl
                                                    -------------------
                                          Dr. Jan Stahl, Chief Executive
                                          Officer, Chief Financial Officer,
                                          Secretary and Chairman
                                          (Principal Executive Officer and
                                          Principal Financial Officer)