UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

|X|      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2004

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from ________ to________
         Commission file number 00030074

                                APO HEALTH, INC.
             (Exact name of registrant as specified in its charter)

          Nevada                                         86-0871787
(State or other jurisdiction of                        (IRS Employer
 incorporation or organization)                     Identification Number)

                 3590 Oceanside Rd. Oceanside, New York   11575
               (Address of principal executive offices) (Zip Code)

                                 (800) 365-2839
               (Registrant's telephone number including area code)

           Securities registered pursuant to Section 12(b) of the Act:

                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, Par Value $.0002 Per Share
                                (Title of Class)

     Indicate by check mark,  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the past 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes |X| No |_|

     Indicate by check mark, if  disclosure of delinquent  filers in response to
Item 405 of Regulation S-K is not contained  herein,  and will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. |X|

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes |_| No |X|

     The aggregate market value of the voting and non-voting  common equity held
by  non-affiliates  computed by  reference to the average bid and asked price of
such  common  equity,  as of the  last  business  day of the  registrant's  most
recently completed second fiscal quarter was $3,683,502.61.

     The number of shares  outstanding  of each of the  registrant's  classes of
common stock as of December 15, 2004 was 35,921,045 shares.

<PAGE>

                                APO HEALTH, INC.
                                    FORM 10-K
                      FISCAL YEAR ENDED SEPTEMBER 30, 2004
                                TABLE OF CONTENTS



                                                                           Page
  Part I
  Item 1.  Business                                                          1
  Item 2.  Properties                                                        3
  Item 3.  Legal Proceedings                                                 3
  Item 4.  Submission of Matters to a Vote of Security Holders               4

  Part II
  Item 5.  Market for Registrant's Common Equity, Related Stockholder
           Matters and Issuer Purchases of Equity Securities                 5
  Item 6.  Selected Financial Data                                           6
  Item 7.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations                     6
  Item 7A.  Quantitative and Qualitative Disclosures About Market Risk      10
  Item 8.  Financial Statements and Supplementary Data                      10
  Item 9.  Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosure                           10
  Item 9A.  Controls and Procedures                                         10
  Item 9B.  Other Information                                               10

  Part III
  Item 10.  Directors and Executive Officers of the Registrant              11
  Item 11.  Executive Compensation                                          13
  Item 12.  Security Ownership of Certain Beneficial
           Owners and Management                                            14
  Item 13.  Certain Relationships and Related Transactions                  14
  Item 14.  Principal Accounting Fees and Services                          14

  Part IV
  Item 15.  Exhibits, Financial Statement Schedules, and
           Reports on Form 8-K                                              15

  Signatures                                                                16


<PAGE>
                                     PART I

ITEM 1.  BUSINESS

History

     Pursuant to a Tax-Free  Reorganization  Agreement  effective June 13, 2001,
InternetFinancialCorp.com,   Inc.  ("IFAN"),  a  Nevada  corporation,   acquired
3,046,300  of the  3,209,563  outstanding  shares of common stock of APO Health,
Inc.,  which  represented  approximately  91% of the then  outstanding  share of
common stock. IFAN, an inactive company,  subsequently became the sole owner and
operator of the business and properties of APO Health,  Inc.,  (collectively the
"Company").

Business of the Company

     The present operations of the Company through its subsidiaries,  APO Health
Inc.,  a  New  York  corporation  and  Universal  Medical  Distributors,   Inc.,
("Universal")  a  distributor  and  supplier  of  disposable  medical,   dental,
veterinary supplies, health and beauty aids, and pharmaceuticals. These products
include  medical and dental  disposable  items such as syringes,  gauze,  gowns,
facemasks and instruments.

     Management has elected to maintain its low margin wholesale business and at
the same time  increase  its market share in school,  retail  medical and dental
areas.  To attain that goal, the Company has introduced its first  institutional
retail  catalogue and in January 2005,  the Company plans to introduce its first
physician  medical  catalogue.  The current  distribution of revenue is 91% from
wholesale accounts and 9% from retail accounts. The goal of the Company with the
introduction  of the two new  catalogues  is to increase the higher gross profit
retail division to 25% of total revenue.

Products and Services

     Currently, the Company distributes  approximately 5,000 different products.
New  products  are  constantly  added as the  needs of the  Company's  customers
increase. The Company obtains its products from vendors throughout the world and
does not manufacture any products except for its emergency dental kits. Although
the Company  does not have any  contractual  arrangements  with  suppliers,  the
Company believes that there are adequate  alternative  suppliers for any product
it sells.

Sales and Marketing

     The Company's products are sold directly by Company employees, through mail
order, and by one outside, independent sales representative. The Company's sales
organization  presently  consists of five  persons,  including  Dr.  Stahl,  the
Company's  Chief  Executive  Officer,  who  oversees  a  combination  of  direct
salespersons and the one independent sales representatives.

         The Company's marketing approach attempts to capitalize on its ability
to procure products throughout the world at favorable prices and to resell them
to its customers.

Potential Impact of Changing Economic Factors in the Health Care Markets

     The health care  industry has been  typified in recent years by strict cost
containment measures imposed by federal and state governments,  private insurers
and other "third party" payers of medical costs. In response to these pressures,
virtually  all  segments of the health care  market have become  extremely  cost
sensitive  and in many cases  hospitals  and other  health care  providers  have
become affiliated with purchasing consortiums,  which obtain large quantities of
products at the lowest possible cost.  These factors in combination  have had an
adverse impact upon smaller  suppliers and  manufacturers,  such as the Company,
which are either unable to supply the large quantities  sought by the purchasing
consortiums  or which  are  unable  to  respond  to the need for  lower  product
pricing.  Although  management  believes that its planned expansion program will
enable it to meet the demand for large quantity orders, and despite management's
belief that the dramatic increased demand for safety oriented


                                       1
<PAGE>
products,  such as the disposable  products offered by the Company,  will offset
these  factors,  there  can be no  assurance  that the  Company  will be able to
overcome the negative impact of these conditions in the health care marketplace.

Potential Impact of FDA and Government Regulation

     Some of the Company's  products may be regulated as medical  devices by the
federal Food and Drug  Administration  (the "FDA")  pursuant to the federal Food
and Drug  Cosmetics Act (the "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 the  Company'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 the
Company  in the  future.  The  Mandatory  Device  Reporting  ("MDR")  regulation
obligates manufacturers,  including distributors such as the Company, to provide
information to the FDA on injuries  alleged to have been associated with the use
of a product or certain  product  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 the Company's operations for an undetermined time.

Product Liability: Cost and Availability of Insurance

     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 the  Company's  products and
proposed products will be utilized in medical procedures where the Company could
be subject to claims for injuries  alleged to have  resulted from the use of its
products.  Recent  developments  in the  insurance  industry  have  reduced  the
availability and increased the cost of liability insurance coverage. At present,
the Company has no product liability insurance.

Lack of Patent Protection

     At present, the Company does not rely upon patent protection for any of its
products and such  protection  is not  believed to be  essential  by  management
because  of  the  character  of  its  products.  Furthermore,  there  is  little
likelihood  that  it  will  develop  patentable  products  or  processes  in the
foreseeable  future.  In the  absence  of  such  protection,  the  Company  will
primarily rely upon trade secrets and proprietary techniques,  where applicable,
to attain or maintain  any  commercial  advantage.  There is no  assurance  that
competitors  will  not  independently  develop  and  market,  or  obtain  patent
protection  for products  similar to those  designed or produced by the Company,
and thus negate any advantage of the Company with respect to any such  products.
Even if patent  protection  becomes  available to the  Company,  there can be no
assurance that such protection will be commercially beneficial.

Competition

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

Dependence Upon Third Party Manufacturers/Suppliers

     The Company does not directly  manufacture any of the products it presently
sells.  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.  In general,  the Company  does not have  long-term  contracts  with its
manufacturers.  Although the Company 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
demand for production that could result from any  significant  disruption in the
current manufacturers and suppliers of the Company's products.

                                       2
<PAGE>
Foreign Manufacturing

     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, 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 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 the Company.

Employees

     The Company,  including  its two  subsidiaries,  APO Health and  Universal,
employs a total of 11 persons;  two  executive  personnel;  four sales  persons;
three clerical and administrative  personnel;  and two warehouse employees.  The
Company's   employees  are  not   represented  by  any   collective   bargaining
organization. The Company believes its relationship with its employees is good.

ITEM 2.  PROPERTIES

     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.

ITEM 3.  LEGAL PROCEEDINGS

     The Proctor & Gamble Company v. Xetal, et al, CaseNo.  04 Civ. 28250 (DRH),
which  matter is pending in the United  States  District  Court for the  Eastern
District of New York. This lawsuit is captioned "Xetal,  Inc., d/b/a APO Health,
Inc and Universal Medical  Distributors,  Inc." Xetal Inc. was the former parent
of both APO Health Inc. and Universal  Medical  Distributors,  Inc.  Xetal Inc.,
(now known as Sickbay Media  Services,  Inc.) has had no involvement or interest
in either the Company or Universal for four years.

     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 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. The
Company  purchased several shipments of these products abroad and unbeknownst to
the Company, some non P&G products were included in these shipments. The Company
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.

     In the  lawsuit,  P&G 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  in its
inquiry and has undertaken a voluntary recall of these products.  As a result of
the  Company's  continuing  cooperation  with  P&G and  the FDA and its  lack of
knowing  culpability,  its counsel  believes that this  proceeding will conclude
without any adverse  consequence  to the Company.

                                       3
<PAGE>
     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 U.S.
District Court for the Eastern  District of New York,  against them and a number
of other  parties.  Alcoa  claimed  that the  Company,  as well as  others,  was
involved  in the sale of  products  which were not  manufactured  by Alcoa.  The
Company  purchased several shipments of these products abroad and unbeknownst to
the Company,  some  non-Alcoa  products  were included in these  shipments.  The
Company has cooperated with Alcoa as well as the federal regulatory agencies and
has supplied 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.

     In the  lawsuit  Alcoa 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  in its
inquiry and has undertaken a voluntary recall of these products.  As a result of
the  Company'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.

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

     There was no matter  submitted  to a vote of  security  holders  during the
fourth quarter of the fiscal year covered by this report.

                                       4
<PAGE>
                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S  COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

         The Company's common stock is currently quoted on NASDAQ's OTC Bulletin
Board under the symbol "APOA." The high and low prices of the common stock for
the quarterly periods of the two years ended September 30, 2004 are as follows:

                                                           Common
                                                           ------
            Quarter Ended                           High              Low
            -------------                          -----             -----
            December 31, 2002                      $0.650           $0.015
            March 31, 2003                          0.080            0.031
            June 30, 2003                           0.060            0.260
            September 30, 2003                      0.090            0.053

            December 31, 2003                       0.050            0.040
            March 31, 2004                          0.180            0.050
            June 30, 2004                           0.150            0.090
            September 30, 2004                      0.090            0.050

         As of December 15, 2004, there were approximately 351 holders of record
of the Company's common stock.

Dividend Policy

     The Company has not adopted any policy  regarding  the payment of dividends
on its common  stock.  The Company does not intend to pay any cash  dividends on
its common stock in the foreseeable  future.  All cash resources are expected to
be invested in developing the Company's business. There are no restrictions that
materially limit the Company's ability to pay cash dividends.

Recent Sales of Unregistered Securities

     During the fiscal year ended September 30, 2004, the Company issued a total
of  2,567,000   shares  of  common  stock  for  consulting,   compensation   and
professional  services  valued at  $148,350.  These  issuances  were exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

                                       5
<PAGE>
     On April 1, 2004, the Company issued a total of 1,000,000 restricted shares
of common  stock with the Company  receiving  net  proceeds  of  $90,000.  Those
issuances were considered  exempt from registration by reason of Section 4(2) of
the Securities Act of 1933, as amended.

ITEM 6.  SELECTED FINANCIAL DATA

     The following  table sets forth selected  financial data as of and for each
of the years in the five year period ended September 30, 2004.  Periods prior to
2002 have been restated to give effect for discontinued operations.

Statement of Operations Data:
<TABLE>
<CAPTION>
                                            Fiscal Years Ended September 30,
                           ----------------------------------------------------------------------------------
                             2004             2003                2002             2001           2000
                             ----             ----                -----            ----           ----
<S>                       <C>              <C>                <C>            <C>             <C>
Revenue                   $35,918,887      $47,448,232        $31,998,836    $  24,143,949   $ 28,882,347
Gross Profit                1,163,017        1,978,024          2,198,162        2,524,717      2,763,830
Selling, General and
 Administrative Expenses    2,658,149        2,323,949          2,515,907        2,303,284      2,648,967
Net Income (loss)
From continuing
operations                 (1,045,132)        (517,256)          (247,521)        (157,899)      (199,257)
Discontinued operations                                           291,498           35,839         16,932
Net Income (Loss)          (1,048,828)        (517,256)            43,977         (122,060)      (240,900)
Earnings per common
From continuing operations      $(.03)           $(.02)             $(.01)           $(.01)         $(.02)
Discontinued operations             -                -              $ .01            $ .00          $ .00
Earnings per
 Common Share                   $(.03)           $(.02)              $.00            $(.01)         $(.02)
Weighted Average
 Shares Outstanding        34,338,680       27,003,847         23,864,383       21,532,814     13,217,660

Balance Sheet Data:

                                                     As of September 30,
                           ----------------------------------------------------------------------------------
                             2004             2003                2002             2001           2000
                             ----             ----                -----            ----           ----
Total  Assets              $2,538,748       $3,698,086         $4,774,786    $   4,115,102   $  4,423,752
Total  Liabilities          2,126,362        2,475,222          3,334,602        2,888,626      3,546,184
Stockholders' Equity          412,386        1,222,864          1,440,184        1,226,476        877,568
</TABLE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Forward-Looking Statements

     This annual report on Form 10-K 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 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.

                                       6
<PAGE>
Results of Operations

Comparison of Fiscal 2004 and 2003

     Revenues for the year ended September 30, 2004 was $35,918,887  compared to
$47,448,232  for the year ended  September  30,  2003.  This was a  decrease  of
$11,529,345 or 24.3%.  The decrease was entirely due to the decrease in sales of
products sold through the  Company's  wholesale  division.  The cost of products
that the Company had previously  imported from both Canada and Europe  increased
substantially  as the United States dollar declined against the Canadian dollar,
British  pound and the Euro.  Because of the price  increases  in United  States
dollar terms,  the Company was not able to pass along its increased costs to the
wholesalers,  and therefore,  the Company reduced or eliminated its purchases on
those products. As a result,  overall revenues for the Company declined.  Retail
sales by the Company were stable from 2003 to 2004.

     The  Company is in the  process of  preparing  a new  catalogue  of medical
supplies which will be distributed to schools,  doctors and medical clinics. The
Company anticipates that the catalogue will be completed prior to December 2004,
and that it will be  distributed  in January 2005.  The gross profit on products
included in the catalogue are expected to be from  approximately  20% to 40% and
management  expects the average margin to be approximately 25% on new sales from
the catalogue.

     The cost of revenues for the year ended September 30, 2004, was $34,305,870
compared  to  $45,470,208  for the year ended  September  30,  2003.  This was a
decrease  of  $11,164,338  or  24.5%.  Included  in the  cost  of  revenues  was
approximately $475,000 for products the Company purchased and had to be recalled
and destroyed  after it was determined that the products were  counterfeit.  The
gross profit margin for the year ended  September 30, 2004, was 4.5% compared to
4.2% for the year ended  September  30, 2003.  The increase in profit  margin is
directly  related to the Company's  decision to reduce purchases from Canada and
Europe where the Company would be unable to sell those products at a profit.

     Selling  expenses  for the year  ended  September  30,  2004 were  $551,230
compared  to  $576,250  for the year ended  September  30,  2004,  a decrease of
$25,020 or 4.3%.  Commission  expense  increased  from $72,390 to  $133,128,  an
increase of $63,738  representing  sales generated by outside sources to augment
the internal sales force. Freight costs increased from $242,730 to $296,637,  an
increase of $53,907 due to increases based on fuel  surcharges.  Advertising and
related costs were $79,575 for the year ended  September 30, 2004, a decrease of
$103,126  from  $182,701  for the year ended  September  30,  2003.  The Company
reduced spending in anticipation of the new catalogue it expects to be completed
in January  2005.  Advertising  and  related  costs are  expected to increase by
approximately  $75,000 in fiscal 2005. Travel and entertainment  expense for the
year ended September 30, 2004, declined by $35,200 from the year ended September
30, 2003.

     General and  administrative  expenses for the year ended September 30, 2004
were $2,106,919, an increase of $359,220 over the year ended September 30, 2003.
In the fourth  quarter of the fiscal year ended  September 30, 2004, the Company
recorded bad debt expense of $681,901  which  included  writing off advances and
increasing  the  allowance  for  doubtful   accounts  directly  related  to  the
counterfeit  products  that the  Company  purchased  and  resold..  Compensation
decreased by $185,165 in 2004 which was entirely  attributable  to the fact that
in 2003 there was a bonus of $156,732 to one of the officers of the Company. For
the year ended September 30, 2004 no bonuses were declared.  In 2003, consulting
fees related to possible  merger and acquisition  activities  were $250,200.  In
2004, total consulting fees decreased to $102,100, a decrease of $148,000. These
two items  accounted  for the  entire  decrease  in general  and  administrative
expenses   excluding  bad  debt   expense.   All  other  items  of  general  and
administrative expense exhibited minor increases or decreases.

     There was a final  settlement of litigation  against the Company in January
2004,  and as a result,  the Company  was  reimbursed  $92,755 by its  insurance
carrier for all legal expenses it had previously expended.

     Interest  expense for the year ended  September  30, 2004 was  $96,451,  an
increase of $3,985  from the year ended  September  30, 2003 .The  Company has a
financing agreement (see note 4 to the financial  statements) which provides for
a maximum line of credit of $1,000,000 where collections are applied against the
line of credit on a daily  basis and  proceeds  from the line of credit are only
taken when needed to pay down liabilities. As a result the average daily balance
outstanding  on the line of credit  increased  slightly from the prior year. The
financing  agreement  allows the Company  greater  flexibility in its ability to
finance increased sales and additional inventory.

                                       7
<PAGE>
Comparison of Fiscal 2003 and 2002

     Revenues for the year ended September 30, 2003 were $47,448,232 compared to
$31,998,836  for the year ended  September 30, 2002, an increase of  $15,449,396
(48.3%).  The increase in revenues is  attributable  to the Company's  wholesale
business as several  products that the Company  distributed  were in highdemand.
Gross margins for the year ended were $1,978,024  compared to $2,198,162 for the
year ended September 30, 2002, a decrease of $220,138 (10.0%).  The gross margin
for the year ended  September  30,  2003 was 4.2%  compared to 6.9% for the year
ended September 30, 2002. The margins declined as some of the wholesale products
were  generating  a gross  profit of only 1% to 1.5% because of rising costs for
those products without the ability to raise prices. In addition, the 24% decline
in the value of the United  States  dollar  against the Canadian  dollar and the
Euro has  affected  profit  substantially.  The  margins  on retail  sales  also
declined due to increases in product costs and increased  competition  which did
not allow the Company to raise prices.

     Operating   expenses   which   include   both   selling   and  general  and
administrative  expenses for the year ended September 30, 2003 were  $2,323,949,
compared  to  $2,515,907  for the year  ended  September  30,  2002.  This was a
decrease of $191,950  (7.6%).  Selling expenses for the year ended September 30,
2003, were $576,250, compared to $842,212 for the year ended September 30, 2002.
This was a decrease of $265,962 (31.5%).  Advertising costs including catalogues
and other  printed  materials  decreased by  approximately  $260,000 in the year
ended  September 30, 2003. The Company  eliminated its outside service that sent
verified   numbers  to  which  it  could  fax  advertising   materials,   saving
approximately  $8,000 per month or $96,000 annually.  All other selling expenses
had minor changes from year to year, decreasing by approximately $6,000.

     General and  administrative  expenses for the year ended September 30, 2003
were  $1,742,699,  compared to $1,673,695 for the year ended September 30, 2002.
This was an increase  of $74,004  (4.4%).  Consulting  expenses  increased  from
$81,642 to $250,200, an increase of $168,558. The Company was actively searching
for possible  combinations or  acquisitions  during the year ended September 30,
2003. The compensation for financial consultants was paid in common stock of the
Company which did not affect the  Company's  cash flow.  Professional  expenses,
including  legal  expenses,  were $46,220 in the year ended  September  30, 2003
compared  to  $142,405  for the year ended  September  30,  2002,  a decrease of
$96,185.  The Company's insurance carrier is defending a class action lawsuit in
the State of  Illinois;  therefore,  legal fees  incurred  by the  Company  have
declined  substantially.  Officer's  compensation  for fiscal 2003  increased to
$533,956 from $489,446 in fiscal 2002,  an increase of $44,510,  which  includes
bonuses of  $156,732 in fiscal 2003  compared  to $110,000 in fiscal  2002.  All
other expenses decreased by approximately  $18,369 with no significant change in
any one expense.

Liquidity and Capital Resources

     As of September 30, 2004,  the Company had working  capital of $396,262,  a
decrease of $828,099 from the Company's  working  capital at September 30, 2003.
The Company's loss from  continuing  operations of $1,048,828 for the year ended
September 30, 2004 was funded by the decrease in working capital and increase in
cash  flows from  operations  for the year ended  September  30,  2004 which was
$473,951.  At September 30, 2004 the Company has a $1,000,000 credit facility of
which  approximately  $400,000  is unused.  The  entire  loss for the year ended
September 30, 2004 was caused by counterfeit  goods the Company  unintentionally
acquired  which are  included  in cost of sales  ($475,000)  and  provision  for
doubtful  accounts and the  write-off of bad debts  ($680,000)  from the sale of
those products..  Based upon the above factors, the Company believes that it has
sufficient funds for operations for the next fiscal year.

Off-Balance Sheet Arrangements

     The  Company  does not have any off  balance  sheet  arrangements  that are
reasonably likely to have a current or future effect on its financial condition,
revenues, results of operations, liquidity or capital expenditures.


                                       8
<PAGE>
Contractual Obligations

     As of  September  30,  2004,  the  Company  had the  following  contractual
obligations:

                                           Payments due by period
                              --------------------------------------------------
                                       Less than                      More than
                              Total     1 Year   1-3 Years  3-5 Years  5 Years
                              -----    ---------  --------- ---------   ------

Operating Lease Obligations  $387,175   $76,812   $141,796  $155,230   $13,337

Critical Accounting Policies

     Cash and cash  equivalents.  For purposes of the  statements of cash flows,
cash equivalents  include all highly liquid investments with original maturities
of three month or less.

     Revenue recognition occurs when products are shipped.

     Advertising  is expensed as  incurred.  For the years ended  September  30,
2004,  2003  and  2002  advertising  expense  was  $25,730,  $72,029,  $303,849,
respectively.

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

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

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

     Shipping  and  handling is expensed as  incurred.  Shipping and handling is
included in selling  expense was $296,637,  $242,730,  and$272,036 for the years
ended September 30, 2004, 2003 and 2002, respectively.

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

     Earnings Per Share. Basic net income per share has been calculated based on
the weighted  average  number of shares of common stock  outstanding  during the
period.  Diluted net income per share is computed by dividing  the net income by
the weighted average number of common shares outstanding plus potential dilutive
securities.  Effective to the June 13, 2001  acquisition,  the weighted  average
number of shares of common stock have been retroactively restated to give effect
for the 5.94 to 1 stock split.

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

     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.


                                       9
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Changes in United States interest rates would affect the interest earned on
our cash and cash  equivalents.  Based on our overall  interest rate exposure at
September 30, 2004, a near-term  change in interest  rates,  based on historical
movements, would not materially affect the fair value of interest rate sensitive
instruments.  Our debt  instruments  have  fixed  interest  rates and terms and,
therefore,  a  significant  change in  interest  rates would not have a material
adverse effect on our financial position or results of operations.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial  information  required by this Item is attached hereto at the
end of this report.

ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

     None.

ITEM 9A.  CONTROLS AND PROCEDURES

     Our management is responsible for  establishing  and  maintaining  adequate
internal  control  over our  financial  reporting.  As of the end of the  period
covered by this  report,  our  management  conducted  an  evaluation,  under the
supervision and with the  participation of our chief executive officer and chief
financial officer of our disclosure  controls and procedures (as defined in Rule
13a-15(e) and Rule 15d-15(e) of the Exchange Act).  Based upon this  evaluation,
our chief  executive  officer and chief  financial  officer  concluded  that our
disclosure  controls and  procedures  are  effective to ensure that  information
required to be  disclosed  by us in the reports that we file or submit 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 significant
change our internal controls or in other factors that could significantly affect
these controls subsequent to the date of the evaluation.


ITEM 9B.  OTHER INFORMATION

     None.

                                       10
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Set  forth  below  are the  names,  ages  and  business  experience  of the
executive  officers  and  directors  of the Company.  All  information  is as of
September 30, 2004.

     Name                 Age    Position

     Dr. Jan Stahl         56    Chairman, Chief Executive Officer, Acting Chief
                                 Financial Officer, Secretary, Director

     Kenneth Levanthal     49    Director

     Dr. Jan Stahl is a New York State licensed  dentist.  Dr. Stahl founded APO
Health,  the  Company's  wholly  owned  subsidiary,  in  1987,  and has been its
Chairman, Chief Executive Officer, Secretary and a Director since such time. Dr.
Stahl's  primary  responsibilities  for the Company are in the area of sales and
marketing.  Prior to founding the Company, Dr. Stahl was a practicing dentist in
the state of New York.

     Kenneth   Levanthal   founded   Universal   Medical   Distributors,    Inc.
("Universal"),  a  subsidiary  of the  Company,  in 1985 and has  served  as its
president since such time. Prior to founding  Universal,  Mr. Levanthal had been
employed as Executive  Vice  President of Medardo Corp., a division of Omnicare,
Inc., having been employed by Medardo Corp. since 1997, prior to its acquisition
by W.R. Grace & Co. (the parent company of Omnicare, Inc.). Omnicare consists of
various  health  care  companies  with  Medarco  specializing  in  the  sale  of
veterinary products.

                                       11
<PAGE>
Family Relationships

     There are no family relationships between or among the Company's directors,
executive  officers  or persons  nominated  or charged by the  Company to become
directors or executive officers.

Involvement in Legal Proceedings

     During the past five years, none of the following  occurred with respect to
the Company's directors or executive officers: (1) no petition under the federal
bankruptcy  laws or any  state  insolvency  law was  filed by or  against,  or a
receiver,  fiscal  agent or similar  officer  was  appointed  by a court for the
business or property of such persons;  (2) there has been no petition  under the
federal  bankruptcy laws or any state  insolvency law filed by or against,  or a
receiver,  fiscal agent or similar officer appointed by a court for the business
or property of any  partnership in which such persons were a general  partner at
or within  two years  before  the time of such  filing,  or any  corporation  or
business  association of which such persons were executive officers at or within
two years before the time of such filing;  (3) no such persons were convicted in
a criminal  proceeding or are a named subject of a pending  criminal  proceeding
(excluding  traffic  violations and other minor  offenses);  (4) no such persons
were the subject of any order,  judgment or decree,  not subsequently  reversed,
suspended or vacated, of any court of any competent jurisdiction, permanently or
temporarily   enjoining,   barring,   suspending  or  otherwise  limiting  their
involvement  in any type of business  practice,  or in  securities or banking or
other financial institution activities;  and (5) no such persons were found by a
court of competent jurisdiction in a civil action by the Securities and Exchange
Commission or by the Commodity  Futures Trading  Commission to have violated any
federal or state  securities or  commodities  law, and the judgment has not been
reversed, suspended or vacated.

Audit Committee Financial Expert

     The Company does not have an audit committee  financial  expert (as defined
in Item 401 of Regulation  S-K) serving on its Board of  Directors.  The Company
has not yet employed an audit committee financial expert on its Board due to the
inability to attract such a person.

Code of Ethics

     The Company has adopted a Code of Ethics and Business  Conduct that applies
to all of its  officers,  directors and  employees.  The Code of Ethics has been
filed with this annual  report as Exhibit 14.1.  Upon request,  the Company will
provide to any  person  without  charge a copy of its Code of  Ethics.  Any such
request should be made to Attn: Dr. Jan Stahl, APO Health,  Inc., 3590 Oceanside
Rd.,  Oceanside,  New  York  11575.  The  Company's  telephone  number  is (800)
365-2839.  The Company is in the process of building a section of its website at
www.apohealth.com  where  its Code of Ethics  will be  available  to  investors.

Compliance with Section 16(a) of the Exchange Act

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive  officers and persons who beneficially own more than ten
percent of a registered  class of the Company's  equity  securities to file with
the SEC  initial  reports of  ownership  and reports of change in  ownership  of
common stock and other equity securities of the Company. Officers, directors and
greater than ten percent stockholders are required by SEC regulations to furnish
the Company  with copies of all Section  16(a) forms they file.  Based solely on
the  review of copies of such  reports  furnished  to the  Company  and  written
representations  that no other reports were required,  the Company believes that
during the  fiscal  year ended  September  30,  2004,  its  executive  officers,
directors and all persons who own more than ten percent of a registered class of
the  Company's  equity  securities   complied  with  all  Section  16(a)  filing
requirements.


                                       12
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

     The  following   table  sets  forth   information   concerning   the  total
compensation the Company has paid or that has accrued on behalf of the Company's
chief executive  officer and other executive  officers with annual  compensation
exceeding  $100,000 during the fiscal years ending  September 30, 2004, 2003 and
2002.
<TABLE>
<CAPTION>

                                             Summary Compensation Table
                                             --------------------------                           Long-Term
                                                                                                 Compensation
                                                                                   ---------------------------- ------------
                                                     Annual Compensation                     Awards               Payouts
                                                     ---------------------------   ---------------------------- ------------
                                                                                                 Securities
                                                                         Other                     Under                   All
                                                                         Annual    Restricted     -lying                  Other
             Name and                                                   Compen-      Stock        Options/       LTIP     Compen-
        Principal Position          Year   Salary ($)   Bonus ($)    sation ($)   Award(s) ($)    SARs (#)    Payouts ($) sation ($)
----------------------------------- ----- ----------- ------------- ----------- --------------- ------------ ------------ ----------
<S>                                 <C>     <C>          <C>               <C>          <C>           <C>           <C>         <C>
Jan Stahl, Chief Executive          2004    $250,000     $   0            -0-          -0-           -0-           -0-         -0-
     Officer (1)                    2003    $222,150     $156,723         -0-        34,666          -0-           -0-         -0-
                                                            (2)
                                    2002    $246,446      $77,000         -0-          -0-           -0-           -0-         -0-
</TABLE>

(1) It should be noted that the  figures  listed as "salary"  include  both base
salary and earned commissions,  but do not include annual bonus amounts, if any,
which are listed separately under the "bonus" column.

(2) Dr.  Stahl has waived his rights to $180,000 of his bonus for the benefit of
the Company.

Executive Employment Agreements

     Dr.  Jan  Stahl had an employment agreement that  expired  on September 30,
2004. The agreement has been automatically extended for a period of one year.

Benefit Plans

     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 is  authorized up to a maximum  aggregate of 3,000,000  shares of common
stock available for any Bonus Compensation Warrants.

     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.  That issuance was considered
exempt from registration by reason of Section 4(2)  of  the  Securities  Act  of
1933.

Board Compensation

     The Company does not have any formal or informal arrangements or agreements
to  compensate  its  directors  for  services  they  provide  as  members of the
Company's Board of Directors.


                                       13
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table  sets  forth,  as  of  September  30,  2004,  certain
information regarding the beneficial ownership of the Company's common stock.
<TABLE>
<CAPTION>

                                      Number of Shares Owned                    Percentage
      Name                          of Record and Beneficially         Common Stock Outstanding (1)
      ----                          --------------------------         ----------------------------
<S>                                              <C>                                  <C>
Dr. Jan Stahl
3141 Ann Street
Baldwin, NY 11510                            11,112,512                          30.94%

Kenneth Levanthal
24 Meadowbrook Road
Huntington Station, NY  11746                   796,000                           2.21%

All Directors and Officers
As a Group                                   11,908,512                          33.15%
</TABLE>

(1) Based upon a total of 35,921,045 shares as of December 15, 2004

Securities Authorized for Issuance Under Equity Compensation Plans

         None

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company's offices are occupied by the Company 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.  Jan  Stahl.  The
Company  occupies the  premises  under an oral  agreement  with PJS and Dr Stahl
whereby  the  Company  discharges  all the  obligations  of the  lease  with the
landlord.

     Except as set forth above, the Company has not entered into any transaction
during the last two years and it has not proposed any  transaction  to which the
Company was or is to be a party, in which any of the following persons had or is
to have a direct or indirect material interest:

         -        Any director or executive officer of the Company;
         -        Any nominee for election as a director;
         -        Any  security  holder  named  in the  "Security  Ownership  of
                  Certain Beneficial Owners and Management" section above; and
         -        Any member of the immediate family (including spouse, parents,
                  children, siblings, and in-laws) of any such person.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit fees

     The  aggregate  fees  billed  for  professional  services  rendered  by the
Company's  principal  accountants  for  the  audit  of the  Company's  financial
statements,  for  the  reviews  of  the  financial  statements  included  in the
Company's annual report on Form 10-K, and for other services  normally  provided
in  connection  with  statutory  filings  were $27,500 and $22,500 for the years
ended September 30, 2004 and 2003, respectively.

All Other Fees

     The Company did not incur any fees for other professional services rendered
by its principal accountants during the years ended June 30, 2004 and 2003.

                                       14
<PAGE>

                                     PART IV

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

Financial  statements and financial  statement  schedules that have been omitted
are not required.

(a)  The following documents are filed as part of this report.

1.       Financial Statements                                            Page

         Report of Independent Registered Public Accounting Firm.         F-1

         Balance Sheets as of September 30, 2004 and 2003.                F-2

         Statements of Operations for the years ended
         September 30, 2004, 2003, and 2002.                              F-3

         Statements of Changes in Stockholders' Equity
         For the years ended September 30, 2004, 2003 and 2002.           F-4

         Statements of Cash Flows for the years ended
         September 30, 2004, 2003 and 2002.                               F-5

         Notes to Consolidated Financial Statements.                    F-6-F-11

2.       Financial Schedule

         Valuation and Qualifying Accounts
         For the years ended September 30, 2004, 2003 and 2002            F-12

(b) Exhibits.

Exhibit
Number                              Description
------------------ -- ----------------------------------------------------------

2.1       Tax-Free   Reorganization    Agreement   between   the   Company   and
          InternetFinancialCorp.com, Inc., effective June 13, 2001, incorporated
          by  reference  to Form 8-K/A filed with the  Securities  and  Exchange
          Commission on July 23, 2001.
3.1       Restated Articles of Incorporation,  incorporated by reference to Form
          8-K filed with the Securities  and Exchange  Commission on October 12,
          2001.
3.2       Certificate of Amendment to Articles of  Incorporation,  changing name
          to Interfinancialcorp.com, Inc., incorporated by reference to Form 8-K
          filed with the Securities and Exchange Commission on October 12, 2001.
3.3       Certificate of Amendment to Articles of  Incorporation,  changing name
          to APO Health, Inc.,  incorporated by reference to Form 8-K filed with
          the Securities and Exchange Commission on October 12, 2001.
3.4       By-laws of the Company,  incorporated  by  reference  to  registration
          statement on Form 10 (File No.  000-30074)  filed with the  Securities
          and Exchange Commission on February 19, 1999.
14.1      Code of Ethics and Business Conduct
21.1      List of Subsidiaries
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.

(c) Reports on Form 8-K.

         None.

                                       15
<PAGE>
                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                               APO HEALTH, INC.



Date: December 28, 2004               By:/S/ Dr. Jan Stahl
                                      ---------------------------
                                      Dr. Jan Stahl
                                      Chairman, Chief Executive Officer, Acting
                                      Chief Financial Officer, Principal
                                      Accounting
                                      Officer and Secretary

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.



       Signature                           Title              Date


  /S/ Dr. Jan Stahl                       Director         December 28, 2004
  -------------------
      Dr. Jan Stahl


  /S/ Kenneth Levanthal                   Director         December 28, 2004
      ------------------
      Kenneth Levanthal


                                       16
<PAGE>




            REPRORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders APO Health, Inc.

Oceanside, New York

We have  audited the  accompanying  consolidated  balance  sheets of APO Health,
Inc.,  and   subsidiaries  as  of  September  30,  2004  and  2003  the  related
consolidated  statements of operations,  stockholders' equity and cash flows for
each of the three years ended September 30, 2004. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted  our audits in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of APO Health, Inc. and
subsidiaries  as of  September  30,  2004 and  2003,  and the  results  of their
operations and their cash flows for each of the three years ended  September 30,
2004, in conformity with accounting  principles generally accepted in the United
States.

Our audits were made to form an opinion on the basic financial  statements taken
as a whole.  The  supplemental  schedules  listed in the index to the  financial
statements and schedules are presented to comply with the rules and  regulations
under the  Securities  and Exchange Act of 1934 and are not otherwise a required
part of the basic financial statements.  The supplemental  schedules for each of
the three years ended  September 30, 2004,  have been  subjected to the auditing
procedures  applied  in the  audits of the basic  financial  statements.  In our
opinion,  the  supplemental  schedules  referred to above  fairly  states in all
material  respects  the  financial  data  required  to be set forth  therein  in
relation to the basic financial statements taken as a whole.

/s/ Linder & Linder
Linder & Linder
Certified Public Accountants
Dix Hills, New York
November 29, 2004, except Note 10, as to
<PAGE>

                                       F-1

                                APO HEALTH, INC.
                           CONSOLIDATED BALANCE SHEETS
                           September 30, 2004 and 2003
<TABLE>
<CAPTION>


                                     ASSETS
                                    --------                      2004                      2003
                                                             ------------               ------------
<S>                                   <C>                          <C>                      <C>
Current Assets
   Cash                                                       $   574,732                $   405,153
   Accounts receivable, net of allowance for
     doubtful accounts of $380,000 and $50,000                  1,179,078                  1,702,741
   Inventory                                                      583,040                  1,396,205
   Notes receivables                                                    -                      4,566
   Due from officers                                                    -                    108,905
   Other current assets                                           186,274                     55,013
                                                             ------------               ------------
         Total Current Assets                                   2,523,124                  3,672,583

Property and Equipment, net of accumulated
     Depreciation of $88,430 and $88,496                            8,124                     18,003
Deposits                                                            7,500                      7,500
                                                             ------------               ------------
         Total Assets                                          $2,538,748                 $3,698,086
                                                             ============               ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Bank notes payable                                         $   609,185                 $1,008,123
   Accounts payable                                             1,168,278                    924,029
   Accrued compensation                                            89,224                    248,483
   Customer deposits                                              259,675                    294,587
                                                             ------------               ------------
         Total Current Liabilities                              2,126,362                  2,475,222
                                                             ------------               ------------
Stockholders' Equity
   Preferred stock, $.01 par value, 2,000,000
     Shares authorized,  0  shares issued
   Common stock,  $.0002 par value, 125,000,000
     Shares authorized, 35,673,045 and 32,106,045
     Shares issued and outstanding                                  7,135                      6,422
   Paid in capital                                              2,158,308                  1,920,671
   Retained earnings (deficit)                                 (1,753,057)                  (704,229)
                                                             ------------               ------------
         Total Stockholders' Equity                               412,386                  1,222,864
                                                             ------------               ------------
         Total Liabilities and Stockholders' Equity            $2,538,748                 $3,698,086
                                                             ============               ============
</TABLE>

See Accompanying Auditor' Report and Notes to Financial Statements.

<PAGE>

                                       F-2


                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED SEPTEMBER 30, 2004, 2003 AND 2002

<TABLE>
<CAPTION>
                                                 2004                       2003                      2002
                                            --------------         --------------              --------------

<S>                                           <C>                    <C>                         <C>
Revenues                                    $  35,918,887          $  47,448,232               $  31,998,836
Cost of revenues                               34,305,870             45,470,208                  29,800,674
                                            --------------         --------------              --------------
Gross Margin                                    1,613,017              1,978,024                   2,198,162

Operating Expenses
   Selling                                        551,230                576,250                     842,212
   General and administrative                   2,106,919              1,747,699                   1,673,695
                                            --------------         --------------              --------------
                                                2,658,149              2,323,949                   2,515,907
                                            --------------         --------------              --------------

(Loss) from operations                         (1,045,132)              (345,925)                   (317,745)
                                            --------------         --------------              --------------
   Other Income (Expenses)
   Recovery of Litigation Costs                    92,755                      -                           -
   Interest expense                               (96,451)               (92,466)                    (94,790)
                                            --------------         --------------              --------------
Total other expenses                               (3,696)               (92,466)                    (94,790)
                                            --------------         --------------              --------------

(Loss) before provision for
   income   taxes                              (1,048,828)              (438,371)                   (412,535)
Provision for (recovery) of income tax                  -                 79,155                    (165,014)
                                            --------------         --------------              --------------

(Loss) from
  continuing operations                        (1,048,828)              (517,526)                   (247,521)

Discontinued operations net of taxes of
$  0 , $ 0 , and $195,059                               -                      -                     291,498
                                            --------------         --------------              --------------

Net Income (Loss)                           $  (1,048,828)         $    (517,526)              $      43,977
                                            ==============         ==============              ==============

Earnings per common share and earnings
Per common share assuming dilution
   From continuing operations               $        (.03)         $        (.02)              $        (.01)
   Discontinued operations                            .00                    .00                         .01
                                            --------------         --------------              --------------

Net income (loss)per common shares          $        (.03)         $        (.02)              $         .00
                                            ==============         ==============              ==============

Weighted average common
Outstanding                                    34,338,680             27,003,847                  23,864,383
                                            ==============         ==============              ==============
</TABLE>
See Accompanying Auditors' Report and Notes to Financial Statements.



                                       F-3
<PAGE>

                                APO HEALTH, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
             FOR THE YEARS ENDED SEPTEMBER 30, 2004, 2003, AND 2002
<TABLE>
<CAPTION>

                                                                                    Retained
                                   Common Stock                 Paid-In             Earnings
                                      Shares      Amount        Capital             (Deficit)          Totals
                                      ------      ------        -------            ------------     ------------
<S>                                   <C>          <C>               <C>                 <C>             <C>
Balances
September 30, 2001                23,132,089   $    4,626        $1,452,530        $  (230,680)     $ 1,226,476

Conversion of loan payable           125,000           25            49,975                              50,000
Acquisition of subsidiary             50,000           10            29,990                              30,000
Issuance of stock
For services                       1,247,138          243            89,488                              89,731
Net income                                                                              43,977           43,977
                                 ------------  ------------     ------------       ------------     ------------


Balances
September  30, 2002               24,554,227        4,904         1,621,983           (186,703)       1,440,184

Issuance of stock
For services                       7,551,818        1,518           298,688                             300,206
Net (loss)                                                                            (517,526)        (517,526)
                                 ------------  ------------     ------------       ------------     ------------

Balance
September 30, 2003                32,106,045        6,422         1,920,671           (704,229)       1,222,864

Issuance of stock
For services                       2,567,000          513           147,837                             148,350

Private placement                  1,000,000          200            89,800                              90,000

Net (loss)                                                                          (1,048,828)      (1,048,828)
                                 ------------  ------------     ------------       ------------     ------------


Balance
September 30,2004                 35,673,045    $   7,135        $2,158,308        $(1,753,057)     $   412,386
                                =============  ============     ============       ============     ============
</TABLE>

See Accompanying Auditors' Report and Notes to Financial Statements.

                                       F-4
<PAGE>

                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED SEPTEMBER 30, 2004, 2003, AND 2002
<TABLE>
<CAPTION>

                                                                  2004              2003             2002
                                                              ------------      ------------     ------------
<S>                                                                <C>                <C>              <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)                                             $(1,048,828)      $ (517,526)      $    43,977
Adjustments to reconcile net income (loss)to
   net cash flows from operating activities
         Depreciation and amortization                              9,879           10,496            11,890
         Bad debts                                                330,000           20,000             2,515
         Deferred taxes                                                             73,563            37,543
         Stock issued for services                                148,350          300,206            89,731
         Write off goodwill                                                                          125,537
Changes in:
         Accounts receivable                                      193,663         (211,446)          256,569
         Inventory                                                813,165          846,404          (550,400)
         Other current assets                                    (131,261)         (36,716)          147,638
         Accounts payable                                         244,249         (194,259)           62,171
         Deferred compensation                                    (50,354)          67,765           149,942
         Customers deposits payable                               (34,912)        (371,009)          665,596
                                                              ------------      ------------     ------------
Cash Flows provided by (used in
             Operating Activities                                 473,951          (12,522)          967,623
                                                              ------------      ------------     ------------

CASH  FLOWS  FROM  INVESTING  ACTIVITIES
Notes receivables                                                   4,566          253,934          (258,500)

Advances from officer, net                                              -          (15,000)          (31,448)
                                                              ------------      ------------     ------------
             Cash Flows provided by
              (used in) Investing Activities                        4,566          238,934          (289,948)
                                                              ------------      ------------     ------------

CASH  FLOWS  FROM  FINANCING  ACTIVITIES

Proceeds from bank notes payable, net                            (398,938)        (341,877)         (336,224)
Proceeds from sale of stock                                        90,000
                                                              ------------      ------------     ------------

              Cash Flows (used in)                               (308,938)        (341,877)         (336,224)
                                                              ------------      ------------     ------------
                 Financing Activities

Net increase (decrease) in cash                                   165,579         (115,645)          341,541

Cash Balances
   Beginning of Year                                              405,153          520,618           179,167
                                                              ------------      ------------     ------------

   End of Year                                                $   574,732        $ 405,153         $ 520,618
                                                              ============      ============     ============
</TABLE>

      See Accompanying Auditors' Report and Notes to Financial Statements.


                                       F-5
<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - SUMMARY OF ACCOUNTING POLICIES

Nature of business  and basis of  consolidation.  APO Health,  Inc.  ("APO") was
incorporated under the laws of the state of New York in August 1978. The APO and
its wholly-owned subsidiary,  Universal Medical Distributors, Inc. ("Universal")
distribute  disposable  medical  products  principally  to dental,  medical  and
veterinary  professionals  and wholesalers in the United States,  principally on
the East  Coast.  Effective  June  13,  2001,  InternetFinancialCorp.com,  Inc.,
("IFAN"),  a Nevada  corporation,  which 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.

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

Cash and cash  equivalents.  For purposes of the statements of cash flows,  cash
equivalents  include all highly liquid  investments with original  maturities of
three month or less.

Revenue recognition occurs when products are shipped.

Advertising  is expensed as incurred.  For the years ended  September  30, 2004,
2003 and 2002 advertising expense was $25,730, $72,029, $303,849, respectively.

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

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

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

Shipping and handling is expensed as incurred. Shipping and handling is included
in selling  expense  was  $296,637,  $242,730,  and$272,036  for the years ended
September 30, 2004, 2003 and 2002, respectively.

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

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

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.

                                       F-6

<PAGE>


                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 2 - SUPPLEMENTAL CASH FLOW STATEMENT DISCLOSURES

                                                     2004       2003      2002

Cash paid during the year for:
                  Interest                        $96,451    $92,477   $91,790
Non cash transactions:
                  Note payable paid for by
                  the issuance of stock                                $50,000
                  Reduction of Officers loan
                  With offset to deferred
                  Compensation                   $109,905

Note 3- OTHER CURRENT ASSETS

Other current assets consist of the following:
                                                      2004        2003
                                                      ----        ----
Prepaid Expenses                                 $  96,274     $55,013
Consulting fees                                     40,000
Advance to stockholder                              50,000
                                                  --------     -------
Total current assets                              $186,274     $55,013

The Company  advanced to one of the stockholders of the Company which is payable
on demand and non interest bearing.  Subsequent to the year end, the stockholder
repaid the advance in full

Note 4 - 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% (7.50% as of September  30,  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.  At September  30,  2004,  the Company was in violation of
certain  covenants  including  its net  worth and  working  capital  which  were
subsequently waived by the lending institution.

Bank Notes Payable at September 30, 2004 and 2003 consist of the following:

                                                    2004          2003
                                                    ----          ----
Own Note Borrowing                             $ 609,185    $1,008,123


Note 5 - INCOME TAXES

Income taxes (benefit) consist of the following:
                                                   2004     2003        2002
                                                   ----     ----        ----
Current                                           $   -   $ 5,592     $ (7,498)
Deferred                                              -    73,563       37,543
Total                                             $   -   $79,155     $ 30,045


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

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

                                                     2004       2003      2002
Computed at the federal statutory
         Rate of 34%                               $    -     $    -   $ 25,168
State income tax (benefit)                              -          -      4,441
Valuation allowance adjustment                          -     73,563    (22,300)
Other adjustments                                       -      5,592     22,736
                                                   --------  --------  ---------
Total                                              $    -    $79,155   $ 30,045
                                                   ========  ========  =========

 The components of deferred taxes are as follows:
                                                        2004             2003
Deferred tax assets
         Allowance for doubtful accounts              $152,000        $ 20,000
         Depreciation                                   21,250          12,000
         Deferred compensation                          50,400         102,400
         Net operating loss carryover                  404,025          62,280
         Valuation allowance                          (627,675)       (196,680)
                                                      ---------       ---------
Total deferred tax assets                             $      -        $      -
                                                      ---------       ---------

The Company has a net  operating  loss  carryover of  approximately  $854,100 to
offset future taxable  income.  The carryover  losses expires  through 2024. The
Company has offset the deferred  tax asset by a valuation of $627,675,  since it
cannot be  determined  more likely than not whether the Company  will be able to
utilize such net operating loss  carryover.  During the year ended September 30,
2004, the valuation allowance increased by $430,995.

Note 6 - DISCONTINUED OPERATIONS

In February 2002, the Company sold the veterinary  division of Universal Medical
Distributors,  Inc.,  including  customer lists and catalogues for $550,000.  In
addition the Company sold its inventory related to the veterinary division.  The
Company  wrote  off  the  remaining  goodwill  associated  with  the  veterinary
division, which resulted in a pretax gain on the sale of $436,205. The financial
statements  for 2001 and 2000 have been  restated  to reflect  the  discontinued
operations  of this  division.  In  connection  with the sale of the  veterinary
division,  the Company  received a total of $500,000 in cash (which includes the
sale of inventory) and received a note in the amount of $250,000 for the balance
which was due on January 31, 2003.

In January,  2002, the Company acquired  Envirotech Air Quality  Services,  Inc.
("Envirotech") for $25,000 in cash and 50,000 restricted shares of common stock.
The Company sold "Envirotech" in August 2002 for $52,900,  and recorded a pretax
loss from  discontinued  operations of $22,930.  In connection with the sale the
Company received  $44,400 in cash and a note in the amount of $8,500  receivable
over a period of 19 months with interest at the rate of 18% per annum.

Note 7 - COMMON STOCK ISSUANCES

During the fiscal year ended  September 30, 2004,  the Company issued a total of
2,567,000  shares of common stock for consulting,  compensation and professional
services valued at $148,350.

On April 1, 2004,  the Company issued a total of 1,000,000  restricted  share of
common stock with the Company receiving net proceeds of $90,000.

During the fiscal year ended  September 30, 2003,  the Company issued a total of
7,551,818  shares  of  common  stock  for  consulting,  compensation  and  other
professional services valued at $300,206 which includes compensation to officers
in the approximate amount of $46,700.


                                       F-8
<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the fiscal year ended  September 30,  2002,the  Company issued a total of
1,247,138 shares of common stock for consulting and other professional  services
valued at $89,731.  In addition,  the company  issued  125,000  shares of common
stock for the  conversion of a $50,000 note payable and $50,000 shares of common
stock as part of the acquisition of "Envirotech" valued at $30,000.

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.

Pro Forma Disclosure

The Company has adopted the disclosure  only provision of SFAS 123,  "Accounting
for Stock Based  Compensation".  Under SFAS 123 employee  warrants are valued at
the grant date using the  Black-Scholes  valuation model. Had compensation  cost
for the Company's  warrants been determined as prescribed by SFAS 123, pro forma
net income  (loss) and  earnings  per share for 2002 would have been  changed as
follows:

                                                               2002
                                                              -------
Net income (loss) as reported                                 $43,977
Pro forma compensation                                        (52,253)
Net Income (loss) pro forma                                   $(8,276)
Diluted earnings (loss) per share                               $(.00)

The estimated per share fair value of the warrants granted in July and September
2002 were $.032 and $.025,  respectively using the Black-Scholes  option pricing
model with the following assumptions:

                                                                2002
                                                               ------
Dividend yield                                                     -
Volatility                                                      76.44
Interest rate                                                   3.25%
Option life in months                                             59

Note 8 - 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.

                                       F-9
<PAGE>
                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Future minimum lease payments are as follows:
For the years ended September 30,

                  2005                               $  76,812
                  2006                                  70,571
                  2007                                  71,225
                  2008                                  75,825
                  2009                                  79,405
           After  2009                                  13,337
                                                      --------
                  Total                               $387,175
                                                      ========

Note 9 - PROFIT SHARING PLAN

The Company  established a profit sharing plan in 1992. All full-time  employees
as defined  within the plan are eligible to  participate.  Contributions  to the
plan are  discretionary and are determined at the Company's year end. The amount
contributed or accrued to the profit sharing plan for the years ended  September
30, 2004, 2003, and 2002, were $0, $0, and $0, respectively.

Note 10 - 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  expires  September  30,  2004 and shall be  automatically
renewed for  successive  periods of one year unless  either party gives  written
notice to terminate the agreement.

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 law suit is seeking, among other relief, a request for a temporary
and permanent  injunction from selling such products.  The Company  continues to
cooperate with and assist the Federal Drug Administration ("FDA") in its inquiry
and has undertaken a voluntary  recall of these  products.  As a result of APO's
continuing cooperation with P&G and the FDA and its lack of knowing culpability,
its counsel  believes that this  proceeding  will terminate  without any adverse
consequence to the Company.

On or about  December 3, 2004,  APO Health,  Inc.  and Dr. Jan Stahl were served
with process in a suit commenced by Alcoa, Inc. (Alcoa) in the US District Court
for the Eastern District of New York,  against it and a number of other parties.
Alcoa  claimed that APO, as well as others were involved in the sale of products
which were not manufactured by Alcoa. APO purchased  several  shipments of these
products abroad and unbeknownst to APO, some non Alcoa products were included in
these shipments. APO is cooperating with Alcoa as well as the Federal regulatory
agencies and is 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 law suit is seeking,  among  other  relief,  a request  for a temporary  and
permanent  injunction  from  selling  such  products.  The Company  continues to
cooperate with and assist the Federal Drug Administration 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.

                                      F-10
<PAGE>
                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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  self-insured  for
product liability claims.

Note 11 - 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 September 30,
2004,  the Company  had  approximately  $411,200  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.  For the years  ended  September  30,  2004,  2003 and 2002 the  following
customers had in excess of 10% of the total sales. No single vendor accounts for
greater than 10% of purchases.

                              2004              2003             2002
                              ----              ----             ----
Customer A                     40%               38%              25%
Customer B                                       12%              11%


Note 12 - Computation of Earnings Per Share
Basic earnings per share is calculated using the average number of common shares
outstanding.  Diluted  earnings  per share is  computed  on the basis of average
number of common shares outstanding plus the effect of outstanding stock options
using the "treasury stock method".

                                               Year Ended September 30,
                                               ------------------------
                                              2004        2003         2002
                                              ----        ----         ----
Net income (loss) available for common
  Shareholders, basic and diluted        $(1,048,828)  $(517,526)    $ 43,977

Weighted average common shares
  Outstanding-basic                       34,338,680   27,003,847   23,864,383

Net effect of dilutive stock options          *            *            *

Basic earnings (loss) per share            $(.03)      $ (.02)        $ .00

* antidilutive


                                      F-11
<PAGE>

                                APO HEALTH, INC.
                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
             FOR THE YEARS ENDED SEPTEMBER 30, 2004, 2003, AND 2002
<TABLE>
<CAPTION>
                                            Balance
Year Ended                                  Beginning of                                           Balance
September 30,         Account               Period           Additions         Reduction        End of Period
-------------         -------               ------           ---------         ---------        -------------
<C>                 <S>                      <S>               <S>               <S>               <S>
2002              Allowance for
                   Doubtful accounts        $29,000           $1,000                              $  30,000

                  Allowance for
                   Deferred taxes           $22,300                             $(22,300)         $       -

2003              Allowance for
                   Doubtful accounts        $30,000           $20,000                             $  50,000

                  Allowance for
                   Deferred taxes           $   -0-          $221,200           $(24,200)         $ 197,000

2004              Allowance for
                   Doubtful accounts        $50,000          $330,000                             $ 380,000

                  Allowance for
                   Deferred taxes           $197,000         $431,000                             $ 628,000

</TABLE>


                                     F-12