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, 2006

                                       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 a large  accelerated  filer, or
an accelerated filer. See definition of "accelerated filer and large accelerated
filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [
] Accelerated filer [ ] Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act. Yes [ ] No [X]

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, 2006,  56,575,212
shares of Common Stock of the issuer were issued and outstanding.


<PAGE>


                                APO HEALTH, INC.
                                    FORM 10-Q
                          QUARTER ENDED MARCH 31, 2006

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                        Page
PART I - Financial Information

<S>               <C>                                                                   <C>
Item 1            Financial Statements.

                  Consolidated Balance Sheets as of
                  March 31, 2006 and September 30, 2005.                                  2

                  Consolidated Statements of Operations for the three and six
                  months ended March 31, 2006 and 2005.                                   3

                  Consolidated Statements of Cash Flows for the
                  six months ended March 31, 2006 and 2005.                               4

                  Notes to Consolidated Financial Statements.                        5 - 11

Item 2            Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.                              11 - 12

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 - 13

Item 1A  Risk Factors.                                                              13 - 16

Item 2            Unregistered Sales of Equity
                  Securities and Use of Proceeds.                                        16

Item 3            Defaults upon Senior Securities.                                       16

Item 4            Submission of Matters to a Vote of Security Holders.                   16

Item 5            Other Information.                                                     16

Item 6            Exhibits.                                                              16

Signatures                                                                               17
</TABLE>


                                        1

<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                                APO HEALTH, INC.
                           CONSOLIDATED BALANCE SHEETS




<TABLE>
<CAPTION>
                                                                    March 31,    September 30,
                                                                      2006           2005
                                                                  -----------    -----------
                                                                  (Unaudited)

                                     ASSETS
                                     ------
<S>                                                               <C>            <C>
Current Assets:
   Cash                                                           $   255,776    $   634,161
   Accounts Receivable, net of allowance for
   doubtful accounts of $400,000 and $405,397                         331,834        452,878
   Inventory                                                          473,964        228,008
   Other Current Assets                                                26,596         36,082
                                                                  -----------    -----------
     Total Current Assets                                           1,088,170      1,351,129
                                                                  -----------    -----------

Property and Equipment, net of accumulated
   Depreciation of $90,541 and $89,639                                  1,088          1,991
Deposits                                                                7,500          7,500
                                                                  -----------    -----------
     Total Assets                                                 $ 1,096,758    $ 1,360,620
                                                                  ===========    ===========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

Current Liabilities:
   Bank Notes Payable                                             $   112,915    $   457,369
   Accounts Payable                                                   946,447        783,069
   Accrued Compensation                                               104,473         42,473
   Customer Deposits                                                  238,213        214,280
                                                                  -----------    -----------
     Total Current Liabilities                                      1,407,048      1,497,191
                                                                  -----------    -----------
Stockholders' Equity (Deficit):
   Common stock, $.0002 par value,
     125,000,000 shares authorized, 43,587,712
     and 42,387,712 shares issued and outstanding                       8,718          8,478
   Paid-in Capital                                                  2,283,605      2,271,845
   Retained Earnings (Deficit)                                     (2,597,613)    (2,416,894)
                                                                  -----------    -----------
     Total Stockholders' Equity (Deficit)                            (305,290)      (136,571)
                                                                  -----------    -----------

     Total Liabilities and Stockholders' Equity (Deficit)         $ 1,096,758    $ 1,360,620
                                                                  ===========    ===========
</TABLE>


                                        2


<PAGE>


                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       FOR THE THREE AND SIX MONTHS ENDED
                       MARCH 31, 2006 AND 2005 (UNAUDITED)


<TABLE>
<CAPTION>
                                                 Three Months                     Six Months
                                         ----------------------------    ----------------------------
                                             2006            2005            2006            2005
                                         ------------    ------------    ------------    ------------
<S>                                      <C>             <C>             <C>             <C>
Revenue                                  $  1,891,053    $  3,893,623    $  3,994,968    $  8,606,580
Cost of Revenue                             1,526,333       3,443,829       3,348,637       7,769,390
                                         ------------    ------------    ------------    ------------
Gross Margin                                  364,720         449,794         646,331         837,190
                                         ------------    ------------    ------------    ------------

Operating Expenses
   Selling Expense                             51,171          89,718         117,188         212,929
   General and Administrative Expenses        302,575         419,443         692,348         796,400
                                         ------------    ------------    ------------    ------------
                                              353,746         509,161         809,536       1,009,329
                                         ------------    ------------    ------------    ------------

Income (Loss) from Operations                  10,974         (59,637)       (163,205)       (172,139)

Interest Expense                               (8,469)        (13,648)        (17,514)        (27,554)
                                         ------------    ------------    ------------    ------------

Net Income (Loss)                        $      2,505    $    (73,015)   $   (180,719)   $   (199,693)
                                         ============    ============    ============    ============

Basic and Diluted Earnings
   Per Common Share:                     $        .00    $       (.00)   $       (.00)   $       (.00)
                                         ============    ============    ============    ============
Weighted Average Common Shares
   Outstanding                             43,587,712      36,090,822      43,187,692      35,931,055
                                         ============    ============    ============    ============
</TABLE>


                                        3

<PAGE>


                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED
                       March 31, 2006 AND 2005 (UNAUDITED)



                                                          2006           2005
                                                       ---------      ---------
Cash Flow from Operating Activities:
Net (Loss)                                             $(180,719)     $(199,693)
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
Depreciation and Amortization                                903          3,068
Stock Issued for Services                                 12,000         40,000
Allowance for Doubtful Accounts                           (5,397)       (20,000)
Changes In:
  Accounts Receivable                                    126,441        367,341
  Inventory                                             (245,956)       (69,532)
  Other Current Assets                                     9,486         87,948
  Accounts Payable                                       163,378       (241,101)
  Accrued compensation                                    62,000         11,594
  Customer Deposits Payable                               23,933         28,954
                                                       ---------      ---------
Cash Flows from Operating Activities                     (33,931)         8,279
                                                       ---------      ---------

Cash Flows from Financing Activities:
Proceeds (Payment) on Bank Notes Payable, Net           (344,454)      (311,531)
                                                       ---------      ---------
Cash Flows from Financing Activities                    (344,454)      (311,531)
                                                       ---------      ---------

Net (Decrease) in Cash                                  (378,385)      (303,252)

Cash Balances:
Beginning of Period                                      634,161        574,732
                                                       ---------      ---------
End of Period                                          $ 255,776      $ 271,480
                                                       =========      =========


                                        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 APO
Health,  Inc.'s Form 10K containing the audited  financial  statements as of and
for the year ended  September 30, 2005,  filed with the  Securities and Exchange
Commission.

The  results of  operations  for the six  months  ended  March 31,  2006 are not
necessarily  indicative  of results to be  expected  for the entire  fiscal year
ending September 30, 2006.

Note 1 - SUMMARY OF ACCOUNTING POLICIES

Nature of business  and basis of  consolidation-  APO Health,  Inc.,  a New York
corporation, ("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 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 ("APO Nevada").

All significant  intercompany  balances and transactions have been eliminated in
consolidation.

Operating deficit and economic conditions
Adverse  economic  conditions  have limited the ability of the Company to market
its products at amounts  sufficient to recover its operating and  administrative
costs. As a result,  the Company  incurred losses of $663,837,  $1,048,828,  and
$517,526 for the three years ended  September 30, 2005, and an operating loss of
$180,719  for the six months  ended March 31,  2006.  APO is in violation of the
working capital and tangible net worth  covenants of its lending  agreement (see
note 4). As more fully  described  in note 8, APO is a defendant in two lawsuits
with  Proctor & Gamble and Alcoa,  involved in the sale of products of those two
companies,  by APO,  which  Proctor  and  Gamble  and  Alcoa  claim to have been
counterfeit  products.  It is not  possible to predict at this time the ultimate
outcome of the  litigation  or the  extent,  if any,  of the  effect on APO.  In
addition, the trustee in bankruptcy of a former customer, is seeking return of a
payment  which it deems to be a  preferential  distribution.  The above  factors
cause  substantial  doubt of the  Company's  and APO's  ability to continue as a
going concern.

In view of these  matters,  realization  of a major portion of the assets in the
accompanying  balance sheet is dependent upon the Company's  ability to meet its
financing requirements,  and the success of its operations.  Management believes
that  actions  presently  being  taken to revise  the  Company's  operating  and
financial  requirements  may not  provide  the  opportunity  for the  Company to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments  that might be necessary should the Company be unable to continue as
a going concern.

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 - Revenue recognition occurs when products are shipped.

Advertising - Advertising is expensed as incurred.  Advertising  expense for the
six months ended March 31, 2006, and 2005 was $1,125 and $9,227, respectively.

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

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


                                        5

<PAGE>


                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - SUMMARY OF ACCOUNTING POLICIES (continued)

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

Shipping and  handling - Shipping  and handling  costs are expensed as incurred.
Shipping  and  handling  expense  included  in selling  expense  was $59,824 and
$113,794 for the six months ended March 31, 2006 and 2005 respectively.

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

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

Fair value  financial  instruments - The Company's  carrying amount of financial
instruments which include cash,  accounts  receivable,  bank notes payable,  and
accounts payable approximate fair value.

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


                                                             2006         2005
                                                             ----         ----
      Cash paid during the period for interest             $17,514       $27,554
      Non cash transactions:
               Stock issued for services                   $12,000       $40,000


Note 3- OTHER CURRENT ASSETS

Other current assets consist of the following:


                                                             2006         2005
                                                             ----         ----
      Prepaid Expenses                                     $26,596       $36,082

Note 4 - BANK NOTES PAYABLE

On October 29, 2002,  APO entered into a financing  agreement  with  Rosenthal &
Rosenthal,  Inc. The  financing  agreement  provides  APO 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.  On March 2, 2005 the  financing  agreement was amended
reducing the maximum credit facility to $500,000. On February 1, 2006, Rosenthal
& Rosenthal  further  reduced  the credit  limit to a maximum of  $300,000.  The
credit facility is  collateralized  by substantially  all of APO's assets and 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% (9.25% as of September  30,  2005).
Under  terms  of the  agreement,  the  lender  may  call  the  loan if APO is in
violation of any restrictive covenant. At March 31, 2006, APO is in violation of
its net worth and working  capital  covenants.  Rosenthal  &  Rosenthal  has not
waived the violations,  and accordingly,  the entire amount of the obligation is
callable.  The credit facility matured on October 31, 2005 and has been extended
through  May 31,  2006  under  substantially  the  same  terms  as the  original
agreement  APO and the lender have agreed to continue  the credit  facility on a
month to month basis.


                                        6

<PAGE>


                                 APO HEALTH INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - INCOME TAXES

Income taxes (benefit) consist of the following:



                                                 2006                  2005
                                             ------------          -------------
      Current                                $       --            $        --
      Deferred                                       --                     --
                                             ------------          -------------
      Total                                  $       --            $        --
                                             ------------          -------------

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


                                                 2006                  2005
                                             -------------         -------------
      Computed at the federal statutory
               Rate of 34%                   $        --           $        --
      State income tax (benefit)                      --                    --
      Valuation allowance adjustment                  --                    --
      Other adjustments                               --                    --
                                             -------------         -------------
      Total                                  $        --           $        --
                                             =============         =============

The components of deferred taxes are as follows:


                                                   2006                 2005
                                              ------------         -------------
      Deferred tax assets
          Allowance for doubtful accounts     $    160,000         $    156,000
          Depreciation                              18,000               19,200
          Deferred compensation                     41,800               40,000
          Net operating loss carryover             696,000              534,000
          Valuation allowance                     (915,800)            (749,200)
                                              ------------         ------------
      Total deferred tax assets               $       --           $       --
                                              ------------         ------------


The Company has a net operating  loss carryover of  approximately  $1,740,000 to
offset future  taxable  income.  The carryover  loss expires  through 2025.  The
Company has offset the deferred  tax asset by a valuation of $915,800,  since it
cannot be  determined  more likely than not whether the Company  will be able to
utilize such net  operating  loss  carryover.  During the period ended March 31,
2006, the valuation allowance increased by $91,500.


                                        7

<PAGE>


                                 APO HEALTH INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - COMMON STOCK ISSUANCES

In December 2005, the Company issued a total of 1,200,000 shares of common stock
for professional services valued at $12,000.

During the fiscal year ended  September 30, 2005,  the Company issued a total of
2,548,000 shares of common stock for consulting and professional services valued
at $64,880.

On April 1, 2005, the Company issued 4,166,667 shares of restricted common stock
to Dr. Jan Stahl,  chief  executive  officer of the Company on the conversion of
$50,000 of deferred compensation.

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 exercised.

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.  To date none of these  warrants have
been exercised.

Note 7 - 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,
2005, 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 $17,027 and $22,290 for the six months ended March 31, 2006
and 2005..

Future minimum lease payments are as follows:


For the years ended September 30,

                    2006                $   35,285
                    2007                    71,225
                    2008                    75,825
                    2009                    79,405
                    2010                    13,337


                                        8

<PAGE>


                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - COMMITMENTS AND CONTINGENCIES

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

Legal Proceedings

On or about July 7, 2004, APO 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
the Company, 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 the APO some non P&G
products may have been 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.  The  lawsuit is seeking,
among other  relief,  a request for a temporary and  permanent  injunction  from
selling such products.  Recently,  the complaint was amended to include a number
of additional  parties,  including Dr. Jan Stahl, chief executive officer of the
Company.  The co-defendants in the suit have asserted  cross-complaints  against
APO for an unspecified amount to be determined at trial based upon their receipt
and subsequent resale of these products.

On or about  December 3, 2004, APO 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, Alcoa claims that counterfeit  products were included in
these  shipments.  The lawsuit is seeking,  among other relief,  a request for a
temporary and permanent  injunction  from selling such products.  Recently,  the
complaint  was  amended  to  include  a  number  of  additional   parties.   The
co-defendants  in the suit have  asserted  cross-complaints  against  APO for an
unspecified  amount to be  determined  at trial  based  upon their  receipt  and
subsequent resale of these products.

In both the P&G and Alcoa law suits,  the plaintiff's  have sought  compensatory
damages in an amount to be proven at the time of trial.  Each plaintiff has also
requested an award of punitive  damages in the sum of $10,000,000.  At this time
outside  counsel  believes that the plaintiffs at trial will be unable to render
their punitive damages.  Outside counsel indicates that the litigation is in the
early stages of discovery  and is unable to render  their  expert  opinion.  The
Company  believes it has  meritorious  defenses and is vigorously  defending its
position.

One of APO's former  customers,  Allou  Distributors Inc. has recently filed for
bankruptcy  protection.  The bankruptcy trustee is seeking the return of $70,000
which he deems is a preferential distribution for payment of merchandise sold to
Allou  Distributors  Inc.  APO  believes  the  claim is  without  merit and will
vigorously defend its position.

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 present, the Company is not insured for product
liability claims.


                                        9

<PAGE>


                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 - CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at various financial institutions.  At times
such  balances  exceed the  insured  limits of the  financial  institution.  The
Company has not  experienced any losses in such accounts and does not believe it
is exposed to any  significant  credit  risk on cash  balances.  As of March 31,
2006,  the Company  had  approximately  $190,555  on  deposit,  in excess of the
$100,000 in each bank, which is insured under federal law.

The  concentration  of credit  risk due to  receivables  is  minimal  due to the
Company's  diverse  customer base  throughout the United States.  For the period
ending March 31, 2006, the following customers had in excess of 10% of the total
sales:


                                            2006

                        Customer A          12%

                        Customer B          11%


No single vendor accounts for more than 10% of purchases.

Foreign manufacturing is subject to a number of risks, including  transportation
delays and interruptions,  political and economic disruptions, the imposition of
tariffs and similar  import/export  controls and changes in government policies.
Although,  to this date, the Company has not  experienced  any material  adverse
effects due to such risks,  there can be no assurance  that such events will not
occur in the future with result of possible  increases in product  costs and /or
delays in product delivery which would, in all likelihood, result in the loss of
revenues and goodwill by the Company.

Note 10- SUBSEQUENT EVENTS

On April 7,  2006,  upon  unanimous  consent  of the Board of  Directors  of the
Company and approval by holders of a majority of shares in the Company  approved
that the  articles  of  incorporation  be  amended  to  increase  the  number of
authorized  shares in the Company  from  125,000,000  to  25,000,000,000  and to
authorize 15,000,000 preferred shares.

On April 7,  2006  the  Company  issued  a debt  conversion  agreement  with six
individuals who converted the aggregate accrued  outstanding fees for consulting
services  totaling  $51,950 into 13,000,000  shares of common stock at $.004 per
share.

On April 21, 2006,  APO entered into a definitive  Agreement  and Plan of Merger
(the  "Merger  Agreement")  with APO Health  Acquisition  Corp,  Inc.,  a Nevada
corporation  and  wholly-owned  subsidiary  of APO  Nevada  and  Jupiter  Global
Holdings, Corp., a Nevada corporation ("Jupiter"). The Merger Agreement provides
that  upon the terms  and  subject  to the  conditions  set forth in the  Merger
Agreement,  APO Acquisition will merge with and into Jupiter, with Jupiter being
the surviving  corporation  (the  "Surviving  Corporation")  and a  wholly-owned
subsidiary of APO Nevada.


                                       10

<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.  All
statements  other than  statements of historical fact made in this annual 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 six months  ended March 31, 2006 was  $3,994,968,  a decrease of
$4,611,612,  or 53.6%,  from $8,606,580 for the six months ended March 31, 2005.
The decrease in revenue has been  categorized  into two areas.  First,  sales in
2005 to customers  that were either no longer in business in 2006 or who were no
longer buying from the Company and are using  alternative  sources  decreased by
approximately  $1,500,000.  The Company purchased many different  products which
were imported from both Canada and Europe.  In fiscal 2006, the Company  reduced
the amount of imports from those areas as the United States dollar  decreased in
value against the Canadian dollar, British pound and the Euro, and also the loss
of major suppliers resulted in a reduction of sales of approximatley $3,000,000.

Cost of revenue  for the six  months  ended  March 31,  2006 was  $3,348,637,  a
decrease of $4,420,753, or 56.9%, from $7,769,390 for the six months ended March
31,  2005.  The  decrease  in cost of  sales  is  approximately  the same as the
percentage  in revenue.  The gross  profit  percentage  for the six months ended
March 31,  2006 was 16.2%  compared  to 9.7% for the six months  ended March 31,
2005. Wholesale revenue accounted for approximately 75% of total revenue for the
six months  ended March 31,  2005 and had a gross  profit of  approximately  6%.
Retail sales during the same period  accounted  for 25% of the total revenue and
had a gross profit of  approximately  20-20%.For  the six months ended March 31,
2006 wholesale  revenue  accounted for approximately 60% of total revenue with a
gross profit of  approximately  7.5% and retail sales  accounted  for 40% of the
total  revenue  with a gross  profit  of  approximately  25-30%.  These  factors
accounted for the overall increase in gross profit percentage.

Selling  expenses  for the six months  ended  March 31,  2006 were  $117,188,  a
decrease of $95,741  from the six months ended March 31,  2005.  Shipping  costs
decreased by $53,970 and commissions  decreased by $28,036 for the quarter ended
March  31,  2006  due  to  the  decrease  in  revenue  to  wholesale  customers.
Advertising  and related costs declined by  approximately  $8,000 as the Company
reduced its mailing of  advertising  materials.  There were minor  increases and
decreases in other selling  expenses with an overall decrease which was directly
related to the decrease in revenue.

General and administrative expenses for the six months ended March 31, 2006 were
$692,348,  a decrease of $104,052  from  $796,400 for the six months ended March
31, 2005.  Total  compensation,  including  payroll taxes and employee  benefits
increased  by  $6,843.  The  increase  in  compensation  reflects  an accrual of
salaries  that had been  reduced  during  the  period  to  preserve  cash  flow.
Consulting  fees  decreased  by $35,000 to $5,000 in the period  ended March 31,
2006. For the period ended March 31, 2005  consulting  expense  represented  the
balance of a one year contract that expired in January 2005. The Company reduced
its  allowance for bad debts by $20,000 in the period ended March 31, 2005 after
writing off $151,214 of uncollectible receivables.  There was no comparable cost
in  2005.  Professional  fees for the six  months  ended  March  31,  2006  were
$181,173,  an increase of $83,134 over the six months ended March 31, 2005.  The
entire  amount of the  increase  is  attributed  to legal fees  incurred  in the
lawsuits with Proctor & Gamble and Alcoa.


Interest expense for the six months ended March 31, 2006 was $17,514, a decrease
of $10,040  from the six month  period  ended March 31,  2005.  The  decrease in
interest  expense is due to a reduction of the credit  facility with Rosenthal &
Rosenthal, Inc which reduced the monthly minimum interest expense.

LIQUIDITY AND FINANCIAL CONDITION

As of March 31, 2006, the Company had a working capital  deficit of $318,878,  a
decrease of $172,816 from the working capital at September 30, 2005. The Company
's losses from continuing  operations of $180,719 for the six months ended March
31, 2006 was funded by the decrease in working  capital and increase in accounts
payable  and  accrued  expenses  of  $225,378.  At  March  31,  2006 the APO had
available a $300,000 credit facility with Rosenthal & Rosenthal,  Inc., of which
$112,915  was  outstanding  at March 31,  2006  (see Note 4 to the  accompanying
financial  statements).  The credit facility is  collateralized  by all of APO's
assets and is personally guaranteed by Dr. Jan Stahl, Chief Executive Officer of
the Company. Under terms of the credit facility, the lender may call the loan if
APO is in violation of certain restrictive covenants.  At March 31, 2006, APO is
in  violation  of its net worth  and  working  capital  covenants.  Rosenthal  &
Rosenthal has not waived the violations,  and accordingly,  the entire amount of
the obligation is callable.  The credit facility matured on October 31, 2005 and
was extended through December 31, 2005 under substantially the same terms as the
original  agreement.  APO and the  lender  have  agreed to  continue  the credit
facility on a month to month basis through May 31, 2006.


                                       11

<PAGE>


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, our 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 March 31, 2006, the Company had $190,555 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: (1) accumulated and  communicated to the Company's  management,
including its principal  executive officer and principal  financial officer,  as
appropriate to allow timely decisions  regarding  required  disclosure;  and (2)
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 s internal  control over  financial
reporting.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On or about July 7, 2004, APO 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
are alleged to be included in these  shipments.  APO 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. Recently, the complaint was
amended  to include a number of  additional  parties,  including  Dr. Jan Stahl,
chief  executive  officer of the  Company.  The  co-defendants  in the suit have
asserted cross-complaints against APO for an unspecified amount to be determined
at trial based upon their receipt and subsequent resale of these products.

On or about December 3, 2004, APO was 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 the Company
New York, 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, Alcoa claims that counterfeit  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.  Recently, the complaint
was amended to include a number of additional parties,  including Dr. Jan Stahl,
chief  executive  officer of the  Company.  The  co-defendants  in the suit have
asserted cross-complaints against APO for an unspecified amount to be determined
at trial based upon their receipt and subsequent resale of these products.

In both the P&G and Alcoa  lawsuits,  the  plaintiffs  have sought  compensatory
damages in an amount to be proven at the time of trial.  Each plaintiff has also
requested an award of punitive damages in the sum of $10,000,000.

One of APO's former  customers,  Allou  Distributors Inc. has recently filed for
bankruptcy  protection.  The bankruptcy trustee is seeking the return of $70,000
which he deems is a preferential distribution for payment of merchandise sold to
Allou  Distributors  Inc.  APO  believes  the  claim is  without  merit and will
vigorously defend its position.


                                       12

<PAGE>


ITEM 1A. RISK FACTORS.

The Company's  business  involves a high degree of risk. Before deciding whether
to invest in the  Company's  securities  potential  investors  should  carefully
consider the risks and  uncertainties  described below and the other information
in this report and in the  Company's  annual  report on Form 10-K for the fiscal
year ended  September 30, 2005 which was filed with the  Securities and Exchange
Commission on January 13, 2006. Each of the following risks could materially and
adversely affect the Company's  business,  financial  condition,  and results of
operations.  This could cause the trading price of the Company's common stock to
decline, with the loss of part or all of your investment.

APO'S  FINANCIAL  STATUS  CREATES  SUBSTANTIAL  DOUBT  WHETHER THE COMPANY  WILL
CONTINUE  AS A GOING  CONCERN  FOR  MORE  THAN 12  MONTHS  FROM THE DATE OF THIS
REPORT.  IF APO DOES NOT CONTINUE AS A GOING  CONCERN,  INVESTORS MAY LOSE THEIR
ENTIRE INVESTMENT.

The Company reported a net loss totaling $180,719 for the six months ended March
31, 2006 and net losses  totaling  $663,837,  $1,048,828  and  $517,526  for the
fiscal years ended September 30, 2005, 2004 and 2003, respectively.  As of March
31,  2006 the  Company  had a  stockholders  deficit of  $305,290  and a working
capital  deficit of  $318,878.  Adverse  economic  conditions  have  limited the
ability of the Company to market its products at amounts  sufficient  to recover
its operating and administrative  costs. APO is in violation of the tangible net
worth covenant of its credit facility with Rosenthal & Rosenthal, Inc. (See Note
4 to the accompanying financial statements). As further described under Part II,
Item 1 of this  report,  the  Company's  wholly  owned  subsidiary  the APO is a
defendant in two lawsuits  commenced by The Proctor & Gamble  Company and Alcoa,
Inc., based on the sale of products of those two companies, which unbeknownst to
APO were counterfeit products. In view of these matters,  realization of a major
portion of the assets in the accompanying  balance sheet is dependent upon APO's
ability to meet its financing  requirements,  and the success of its operations.
Management believes that actions presently being taken to revise APO's operating
and  financial  requirements  provide the  opportunity  for APO to continue as a
going  concern.  The  accompanying  financial  statements  do  not  include  any
adjustments  that might be necessary should the Company be unable to continue as
a going concern.  While APO believes it has sufficient capital resources to fund
operations  for the  next 12  months,  APO may  require  additional  capital  to
continue operations beyond such period. The Company may raise additional working
capital  either  through  private  placements,   public  offerings  and/or  bank
financing.  There are no assurances  that APO will be able to achieve a level of
revenues  adequate to generate  sufficient  cash flow from  operations or obtain
additional  financing through private  placements,  public offerings and/or bank
financing necessary to support its working capital  requirements.  To the extent
that funds generated from any private  placements,  public offerings and/or bank
financing are  insufficient,  the Company will have to raise additional  working
capital. No assurance can be given that additional  financing will be available,
or if available, will be on acceptable terms. If adequate working capital is not
available  APO  will be  forced  to  discontinue  operations,  which  may  cause
investors  to lose the entire  amount of their  investment.  In the event APO is
forced  to  discontinue  operations,  the  Company  may  divest  itself  of  its
subsidiaries, APO and Universal and attempt to locate and negotiate with another
company for the purpose of a business  combination of the two companies in order
to obtain another business opportunity for the Company's shareholders.

THE COMPANYS  WHOLLY OWNED  OPERATING  SUBSIDIARY APO NEW YORK IS A DEFENDANT IN
TWO LITIGATION PROCEEDINGS,  WHICH HAS CAUSED APO TO LOSE CUSTOMERS RESULTING IN
A SIGNIFICANT LOSS OF REVENUE.  THESE PROCEEDINGS MAY CAUSE APO NEW YORK TO LOSE
OTHER CUSTOMERS  WHICH WOULD FURTHER WORSEN APO'S FINANCIAL  CONDITION AND COULD
FORCE APO NEW YORK TO DISCONTINUE OPERATIONS.

As further described under Part II, Item 1 of this report,  the Company's wholly
owned subsidiary, APO, is a defendant in two lawsuits commenced by The Proctor &
Gamble Company ("P&G") and Alcoa, Inc. ("Alcoa"),  based on the sale of products
of those two companies, which unbeknownst to APO, were counterfeit products. APO
purchased  several  shipments of products  abroad and  unbeknownst  to APO, some
non-P&G  and  non-Alcoa  products  were  included  in  these  shipments.  APO is
cooperating with P&G and Alcoa as well as the federal regulatory agencies and is
supplying P&G and Alcoa with all of its documentation in order to assist P&G and
Alcoa in their  efforts to remove these  products  from the  marketplace  and to
allow  them to trace back the source of these  improper  products.


                                       13

<PAGE>


APO MAY INCUR MATERIAL PRODUCT LIABILITY COSTS.

Providers of medical  products to hospitals  and other health care  institutions
may encounter liability for damages to patients in the event that their products
prove to be defective.  Certain of APO's products and proposed  products will be
utilized  in  medical  procedures  where APO could be subject to claims for such
injuries  resulting from the use of its products.  All of the products APO sells
are  produced  by  third-party  manufacturers.  As  a  distributor  of  products
manufactured by third parties,  APO may be liable for various product  liability
claims for products APO does not manufacture  even though the APO has no control
over the  manufacturing  procedures  used in connection  with the  production of
these third-party products. At present APO has no product liability insurance.

COMPLIANCE WITH GOVERNMENTAL  REGULATIONS MAY IMPOSE ADDITIONAL COSTS, WHICH MAY
ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Some of APO's products may be regulated as medical  devices by the U.S. Food and
Drug  Administration  (the "FDA") pursuant to the federal Food and Drug Cosmetic
Act and are,  or may be,  subject  to  regulation  by other  federal  and  state
governmental  agencies.  The FDA has  comprehensive  authority  to regulate  the
development,   production,   distribution  and  promotion  of  medical  devices.
Furthermore,  certain states impose additional  requirements on the distribution
of medical  devices.  The FDA may require  pre-market  approval of some of APO's
proposed products, requiring extensive testing and a lengthy review process. The
cost of  complying  with  present  and future  regulations  may be  significant.
Furthermore,  the regulatory  approval  process and attendant costs may delay or
prevent the marketing of products  developed by APO in the future. The Mandatory
Device Reporting regulation  obligates  manufactures  including,  in some cases,
distributors  such as APO to provide  information to the FDA on injuries alleged
to have been associated with the use of a product or certain  products  failures
which  could  cause  injury.  The  FDA  is  empowered  to  take  action  against
manufacturers of regulated  products including both civil and criminal remedies,
and may also prohibit or suspend the marketing of products if  circumstances  so
warrant.  Any such  action by the FDA  could  result  in a  disruption  of APO's
operations  for an  undetermined  time.  Compliance  with any of these  laws and
regulations may impose additional costs on APO which may negatively affect APO's
financial condition.

THE DENTAL,  MEDICAL AND  VETERINARY  PRODUCTS  SUPPLY  BUSINESSES ARE INTENSELY
COMPETITIVE.  APO  HAS  MANY  WELL-ESTABLISHED  COMPETITORS  WITH  SUBSTANTIALLY
GREATER  FINANCIAL AND OTHER  RESOURCES THAN THE COMPANY.  THESE FACTORS MAKE IT
DIFFICULT  FOR APO TO COMPETE IN ITS  INDUSTRY  AND MAY  ADVERSELY  AFFECT APO'S
RESULTS OF OPERATIONS.

The  medical,  dental and  veterinary  products  supply  business  is  intensely
competitive.  At present,  APO estimates that there are over 40 companies  whose
products  compete  with  many of APO's  present  and  proposed  products.  These
companies  range from major  multinational  companies  to  enterprises  that are
smaller in size and  financial  ability than APO APO's  present and  prospective
competitors  also include the numerous  manufacturers  and suppliers of reusable
medical  products and  manufacturers of raw materials used by APO. Many of APO's
competitors  have far  greater  financial  resources,  larger  staffs,  and more
established  market  recognition in both the domestic and international  markets
than APO. These factors make it difficult for APO to compete in its industry and
may adversely affect APO's results of operations.

IF APO'S  SUPPLIERS ARE UNABLE TO DELIVER  PRODUCT,  THE COMPANY'S  REVENUES AND
ULTIMATELY PROFITS WILL BE REDUCED.

APO is highly dependent on third party vendors to manufacture and distribute its
products.  APO does not  directly  manufacture  any of the products it presently
sells. The products  distributed by APO are, for the most part,  manufactured by
third parties in the United States, the Far East, Mexico and Canada. In general,
APO does not have  long-term  contracts  with its  manufacturers.  Although  APO
believes  alternative  sources for  virtually  all of its  products  are readily
available,  there  can be no  assurance  that the  available  supply  from  such
alternative  sources  would  be  adequate  to  meet  the  increased  demand  for
production  that would most likely  result from any  significant  disruption  in
APO's traditional  manufacturers and suppliers. If APO's suppliers are unable to
deliver product, APO's revenues and ultimately profits will be reduced.

APOIS  SUBJECT TO RISKS  SPECIFIC  TO FOREIGN  MANUFACTURING  WHICH  COULD CAUSE
INCREASES IN PRODUCT COSTS AND DELAYS IN PRODUCT  DELIVERY WHICH WOULD RESULT IN
LOSS OF REVENUES AND GOODWILL.

Foreign manufacturing is subject to a number of risks, including  transportation
delays and interruptions,  political and economic disruptions, the imposition of
tariffs and similar import/export controls and changes in governmental policies.
Although,  to date, APO has not experienced any material  adverse effects due to
such  risks,  there can be no  assurance  that such events will not occur in the
future with the result of possible  increases in product  costs and/or delays in
product delivery which would, in all likelihood,  result in the loss of revenues
and goodwill by APO.


                                       14


<PAGE>


THE LOSS OF THE SERVICES OF THE COMPANY'S CHIEF EXECUTIVE OFFICER, DR. JAN
STAHL, COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS.

The Company's  success depends to a large degree on the skills of Dr. Jan Stahl,
who is presently one of two executive  officers.  The other executive officer is
Kenneth Levanthal who serves as the Company's Corporate  Secretary.  The loss of
Dr. Stahl's  services could have a materially  adverse effect upon the Company's
ability  to  successfully  carry on its  business.  Furthermore,  the  Company's
operations require the services of additional skilled personnel. There can be no
assurance  that the Company will be able to attract  persons with the  requisite
skills and training to meet the Company's needs or, even if suitable persons are
found that they will be available on terms acceptable to the Company.

THE COMPANY'S HISTORIC STOCK PRICE HAS BEEN VOLATILE AND THE FUTURE MARKET PRICE
FOR THE  COMPANY'S  COMMON STOCK IS LIKELY TO CONTINUE TO BE VOLATILE.  FURTHER,
THE LIMITED  MARKET FOR THE  COMPANY'S  COMMON  STOCK MAKES THE STOCK PRICE MORE
VOLATILE.  THIS MAY MAKE IT DIFFICULT FOR YOU TO SELL THE COMPANY'S COMMON STOCK
FOR A POSITIVE RETURN ON YOUR INVESTMENT.

The public  market for the  Company's  common stock has  historically  been very
volatile.  During the past two fiscal years ended September 30, 2005 and the six
months ended March 31, 2006, the market price for the Company's common stock has
ranged from $0.01 to $0.18.  Any future  market price for the  Company's  common
stock is likely to continue to be very volatile.  This price volatility may make
it more  difficult  for you to sell  shares  when  you want at  prices  you find
attractive.  The  Company's  litigation  proceedings  with The  Proctor & Gamble
Company and Alcoa,  Inc. may have contributed to the volatility in the Company's
stock price. In addition,  the stock market in general has  experienced  extreme
price and volume fluctuations that have often been unrelated or disproportionate
to the  operating  performance  of  companies.  Broad  market  factors  and  the
investing public's negative  perception of the Company's business may reduce the
Company's  stock  price,  regardless  of the  Company's  operating  performance.
Further,  the market for the  Company's  common stock is limited and the Company
cannot assure you that a larger market will ever be developed or maintained.  As
of February 15, 2006, the average daily trading  volume of the Company's  common
stock  over the past three  months was  approximately  46,620  shares.  The last
reported sales price for the Company's common stock as of February 15, 2006, was
$0.0071  per  share.  Market  fluctuations  and  volatility,  as well as general
economic, market and political conditions,  could reduce the market price of the
Company's  common stock.  As a result,  this may make it difficult or impossible
for you to sell  the  Company's  common  stock  for a  positive  return  on your
investment.

THE  COMPANY'S  COMMON  STOCK IS SUBJECT TO THE "PENNY  STOCK" RULES OF THE SEC,
WHICH MAKES TRANSACTIONS IN THE COMPANY'S COMMON STOCK CUMBERSOME AND MAY REDUCE
THE VALUE OF AN INVESTMENT IN THE COMPANY.

The Securities and Exchange Commission has adopted Rule 3a51-1 which establishes
the definition of a "penny stock," for the purposes relevant to the Company,  as
any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share,  subject to certain  exceptions.
For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:

That a broker or dealer approve a person's account for transactions in penny
stocks; and

The  broker or dealer  receive  from the  investor  a written  agreement  to the
transaction,  setting  forth the  identity and quantity of the penny stock to be
purchased  in order to  approve a person's  account  for  transactions  in penny
stocks,

The  broker  or  dealer  must:  obtain  financial   information  and  investment
experience  objectives of the person;  and make a reasonable  determination that
the transactions in penny stocks are suitable for that person and the person has
sufficient  knowledge  and  experience  in  financial  matters  to be capable of
evaluating the risks of transactions in penny stocks.

The broker or dealer  must also  deliver,  prior to any  transaction  in a penny
stock, a disclosure  schedule  prescribed by the SEC relating to the penny stock
market,  which,  in highlight  form: sets forth the basis on which the broker or
dealer made the suitability determination; and

That the broker or dealer received a signed, written agreement from the investor
prior to the transaction.

Generally,  brokers may be less willing to execute  transactions  in  securities
subject  to the  "penny  stock"  rules.  This  may  make it more  difficult  for
investors  to dispose of the  Company's  common stock and cause a decline in the
market value of the stock.


                                       15

<PAGE>


Disclosure  also has to be made about the risks of  investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative,  current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock  transactions.  Finally,  monthly  statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During  December 2005, the Company issued a total of 1,200,000  shares of common
stock as  consideration  for  professional  services valued at $12,000.00.  This
transaction was exempt from registration  requirements  pursuant to Section 4(2)
of the Securities Act of 1933, as amended.

On April 7,  2006  the  Company  issued  a debt  conversion  agreement  with six
individuals who converted the aggregate accrued  outstanding fees for consulting
services totaling  $56,450,  into 14,112,500 shares of common stock at $.004 per
share.  In this  transaction  6,250,000  shares  are  exempt  from  registration
requirements pursuant to Section 4(2) of the Securities Act of 1933, as amended.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

At March 31, 2006 APO had available a $300,000  credit facility with Rosenthal &
Rosenthal,  Inc.,  of  which  $112,915  was  outstanding  (see  Note  4  to  the
accompanying financial statements). The credit facility is collateralized by all
of the APO's  assets  and is  personally  guaranteed  by Dr.  Jan  Stahl,  Chief
Executive Officer of the Company. Under terms of the credit facility, the lender
may call the loan if APO is in violation of certain  restrictive  covenants.  At
March  31,  2006  APO is in  violation  of its net  worth  and  working  capital
covenants. Rosenthal & Rosenthal has not waived the violations, and accordingly,
the entire amount of the obligation is callable.  The credit facility matured on
October 31, 2005 and was extended through December 31, 2005 under  substantially
the same terms as the  original  agreement.  APO and the lender  have  agreed to
continue  the credit  facility on a month to month basis.  APO had  requested an
extension of the credit facility through March 31, 2006.

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 Principal
        Financial Officer,  pursuant to Section 302 of the Sarbanes-Oxley Act of
        2002.

32.1    Certification  by Dr. Jan Stahl,  Chief Executive  Officer and Principal
        Financial Officer,  pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002.


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<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 10, 2006                       By: /s/ Jan Stahl
                                         ---------------------------------
                                         Dr. Jan Stahl, Chief Executive
                                         Officer, Acting  Principal
                                         Accounting Officer



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