<PAGE>
                            WASHINGTON,  D.C.  20549

                                   FORM  10-K

               [ X ] ANNUAL SECURITIES  AND  EXCHANGE  COMMISSION
              REPORT  PURSUANT  TO  SECTION  13  OR  15(D)  OF  THE
                       SECURITIES  EXCHANGE  ACT  OF  1934

                 For the fiscal year ended  September 30,  2002

    [    ]  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 (1):

                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
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    .
          ----

                    (1) Registration is being filed herewith.

The  aggregate  market  value  of the voting stock held by non-affiliates of the
registrant  based on the closing bid price of such stock as of December 3, 2002,
amounted  to  $  601,020.

The  number  of shares outstanding of each of the registrant's classes of common
stock  as  of  December  3,2002  was  24,554,227  shares.



                                       -1-

<PAGE>




                       DOCUMENTS  INCLUDED  BY  REFERENCE:
          Registration  on  Form  S-2  filed  on  January  15,  2002
          Report  on  10Q  filed  on  February  14,  2002
          Report  on  Form  8-K/A  filed  February  14,  2002
          Report  on  Form  8-K/A  filed  February  27,  2002
          Report  on  10Q  filed  on  May  16,  2002
          Report  on  10Q  filed  on  August  14,  2002



         (The Remainder of This Page Has Been Left Intentionally Blank.)




                                       -2-

<PAGE>



                               APO  HEALTH,  INC.
                               ------------------


                                   FORM  10-K
                    FISCAL  YEAR  ENDED  SEPTEMBER  30,  2002


                               TABLE  OF  CONTENTS
                               -------------------


                                                                          PAGE
                                                                          ----


PART  I    Item  1      Business                                         4 - 6

           Item  2      Properties                                           6

           Item  3      Legal  Proceedings                                6 -7

           Item  4      Submission  of  Matters  to  a  Vote
                        of  Security  Holders                                7


PART  II   Item  5      Market  for  Registrant's  Common  Equity
                        and  Related Stockholder Matters                     8

           Item  6      Selected  Financial  Data                            9

           Item  7      Management's  Discussion  and  Analysis  of
                        Financial  Condition  and  Results of Operations  9-11

           Item  8      Financial  Statements  and  Supplementary  Data     11

           Item  9      Changes  in  and  Disagreements  with  Accountants
                        On Accounting and Financial Disclosure              11


PART  III  Item  10     Directors and Executive Officers of the Registrant  12

           Item 11      Executive Compensation                              13

           Item  12     Security  Ownership  of  Certain  Beneficial
                        Owners  and  Management                             13

           Item  13     Certain  Relationships  and  Related  Transactions  13
           Item  14     Exhibits,  Financial  Statement  Schedules  and
                        Reports  on  Form  8-K                              14


SIGNATURES                                                                  15



                                        3

<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  represent  approximately  91%. Whereupon, IFAN an inactive company
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. is a distributor,
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 the school and retail medical and dental
areas in .To attain that goal, APO has introduced its first institutional retail
catalogue  and  in  January ,2003 the Company will introduce its first physician
Medical  catalogue.  The  current  distribution of revenue is 80% from wholesale
accounts  and  20%  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  40%  of  revenue.


PRODUCTS  AND  SERVICES
Currently,  APO distributes approximately 10,000 different products New products
are  constantly  being  added  as  the customers needs increase. APO 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,  which  it  sells.


SALES  AND  MARKETING
The  Company's  products  are  sold  directly by Company employees, through mail
order  and  by  outside,  independent sales representatives. The Company's sales
organization  presently  consists  of  four  persons,  including  Dr. Stahl, the
Company's  Chief  Executive  Officer,  who  oversees  a  combination  of  direct
salespersons and independent sales representatives. Typically, independent sales
representatives  who  have  undertaken to sell the Company's products will agree
not  to sell similar or competitive products during the time when they represent
the  Company.

The  Company's  marketing  approach  attempts to capitalize on its wide array of
product lines in order to offer mass merchandisers, buying consortiums, and drug
store  and supermarket chains a "package" approach to its private label program.
This not only provides customers with attractive and competitive pricing but, in
management's  opinion,  provides  the  Company  with  a competitive advantage by
offering  its  customers  the ease of administration and cost savings which come
with  using  a  single  supplier  for  many  of  their  product  needs.


                                        4

<PAGE>


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 are charged with obtaining
large  quantities  of needed 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  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,  as  some  cases,  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 products failures which could
cause  injury.  The  FDA  is  empowered  to take action against manufacturers of
regulated  products  including  both  civil  and criminal remedies, and may also
prohibit  or  suspend the marketing of products if circumstances so warrant. Any
such  action by the FDA could result in a disruption of 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  such  injuries  resulting  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
maintains  product liability insurance coverage in the amount of $1,000.000 with
an  umbrella  to  $4,000,000.  However, as a result of the continuing changes in
insurance  coverage  and premiums, no assurance can be given that such insurance
will  be  adequate  to  fully  protect the Company in the future or that product
liability  insurance  can  be  maintained  at  a  reasonable  cost.


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.

                                        5

<PAGE>


COMPETITION
The  dental and veterinary products supply businesses are intensely competitive.
At  present,  the  Company  estimates  that  there  are  over 20 companies whose
products compete with many of the Company's present and proposed products. These
companies  range  from  major  multinational  companies to enterprises which 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 material 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
increased  demand  for  production  that  would  most  likely  result  from  any
significant  disruption in the Company's traditional manufacturers and suppliers
of  its  products.


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, employ a
total  of  13  persons;  3  executive personnel; 4 sales persons; 4 clerical and
administrative  personnel;  and  2warehouse  employees.



ITEM  2     PROPERTIES
As  of  September 30, 1999, the Company's offices were located at 3390 Oceanside
Road, Oceanside, New York. The premises contain approximately 12,000 square feet
under  a  five-year  lease (the "Lease") which expires in December 31, 2004 (the
"Lease  Term").  These premises are occupied under a Lease between the landlord,
who is an unaffiliated third party, and an affiliated company PJS Trading, Inc.,
a  New  York  corporation  ("PJS")  owned  by Dr. Stahl and Mr. Steil, which was
originally  formed  by  them for the express purpose of entering into this Lease
agreement.  The Company occupies these premises under an oral agreement with PJS
and  Dr.  Stahl and Mr. Steil whereby the Company has agreed to discharge all of
the  Lease obligations with the landlord. The annual lease payment under the new
lease  is  approximately  $72,400  per year with increases for real estate taxes
over the base period. Neither PJS nor Dr. Stahl nor Mr. Steil 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  1,2002 the Company has subleased approximately
2000  square  feet  of  the  warehouse  space at approximately $18,000 per year.


ITEM  3     LEGAL  PROCEEDINGS
There  is  an  action  pending  in  the Circuit/Superior Court of Marion County,
Indiana  entitled  "Kenro,  Inc.,  on  behalf of itself and all others similarly
situated  against  APO  Health,  Inc., Cause No. 490120101CP000016." The lawsuit
involves unsolicited broadcast faxes sent in the state and has been certified as
a  class  action suit. The Company has petitioned the court to certify its class
action  for  interlocutory  appeal.  The  Company  has  filed  a  suit  seeking
indemnification by or contribution from the vendors who sent the faxes on behalf
of  the Company. It is the Company's belief and contention that damages, if any,
which  may  be  awarded  to  the plaintiff are covered by insurance up to policy
limits.

                                        6

<PAGE>


However, On October 24, 2001, the Company was named as a defendant in Merchant's
&  Business  Men's  Mutual  Insurance  Company  vs.  APO  Health, Inc., Case No.
01-605-091,  Supreme  Court  of  the  State  of  New  York,  County of New York.
Merchant's & Business Men's Mutual Insurance Company issued a Commercial Blanket
Excess  Liability  insurance  policy  to  the  Company  for  one year commencing
February  27, 2000 up and through February 27, 2001. Merchant's & Business Men's
Mutual  Insurance Company alleges in its complaint that policy coverage with the
Company does not extend to the allegations set forth in the aforementioned Kenro
suit.  The  Company,  however,  disagrees and contends that the policy issued by
Merchant's & Business Men's Mutual Insurance Company obligates them to cover any
monetary  damages  that  the  Company  may  incur, as a result of an unfavorable
verdict  in  the  Kenro  suit.

On  July1,  2002,the  Court  granted  the  intervention  motion  of  the  Kenro
plaintiffs,  and,  as  a  matter  of  law,  denied Merchants' motion for summary
judgement  and  granted  the  Company's  cross-motion for summary judgement, and
finding  that  the claims asserted against the Company in the Kenro lawsuit fell
within the terms of the Merchants' policies. As a result, the Court ordered that
Merchants  has  a duty to defend and indemnify the Company in the Kenro lawsuit.
Additionally,  the Court found alternatively, that the disclaimer of coverage by
Merchants  was  untimely, so that Merchants would not be allowed to rely upon or
raise  any  coverage defenses. The Court also found that the Company is entitled
to be reimbursed for the legal fees that it incurred, and ordered that a hearing
be  conducted  to  determine  the  amount  that  Merchant  owed.


Merchants subsequently filed a motion for reargument of its unsuccessful summary
judgement  motion,  and  papers in opposition have been submitted by the Company
and the Kenro plaintiffs to the Court. The Company and the Kenro plaintiffs have
argued  that  the  Court should adhere to its original decision for a variety of
reasons.  Merchants  has also filed an appeal to the Appellate Division from the
Court's  July  1,2002 Order, and in the event the Court adheres to its decision,
it  is expected that Merchants will again notice an appeal, and move to have the
two  appeals  consolidated.


ITEM  4     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
None.

                                        7

<PAGE>


                                    PART  II
                                    --------



ITEM  5     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND
            RELATED  STOCKHOLDER  MATTERS

APO  common  stock  currently trades on NASDAQ's OTC Electronic "Bulletin Board"
and  is currently traded under the symbol "APOA" .The high and low prices of the
common  stock  for  the  quarterly  periods  for  the two years ending September
30,2001  are  as follows.(Prior to the reorganization on June 13,2001 the prices
reflect  those  of  Internet  Financial Corp. Com, Inc. trading under the symbol
"IFAN".)

<TABLE>
<CAPTION>


                                  Common
                                  ------
  Quarter  Ended                High   Low
  --------------                ----  ----
<S>                   <C>      <C>   <C>
  December 31, 2000             6.25  1.90
  March 31, 2001                3.00  1.80
  June 30, 2001                 3.50  2.62
  September 30, 2001            3.00  0.72

  December 31, 2001             1.01  0.45
  March 31, 2002                0.70  0.09
  June 30, 2002                 0.50  0.09
  September 30, 2002            0.15  0.05
</TABLE>


(a) Holders    The  number  of  holders  of  record of the Company's common
               stock  as  of  September  30,  2002  was  approximately 383.

(b) Dividends
               The  Company  has  not paid or declared any cash dividends on its
               common  stock  since  its  inception,  and  by  reason  of  its
               contemplated  financial  requirements, does not anticipate paying
               any  cash  dividends  on  its  common  stock  in the near future.


                                        8

<PAGE>


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, 2002.Periods prior to 2002
have  been  restated  to  give  effect  for  discontinued  operations.

Statement  of  Operations  Data:
<TABLE>
<CAPTION>


                                                            Fiscal  Year  Ended  September  30,
                                          ------------------------------------------------------------------
                                              2002          2001          2000         1999         1998
                                          ------------  ------------  ------------  -----------  -----------
<S>                                       <C>           <C>           <C>           <C>          <C>
Revenue                                   $31,998,836   $24,143,949   $28,882,347   $30,747,128  $31,720,600
Gross Profit                                2,198,162     2,524,717     2,763,830     2,579,870    2,922,257
Selling, General and
 Administrative Expenses                    2,515,907     2,303,284     2,648,967     2,432,167    2,534,022
Net Income (loss)
From continuing
operations                                   (247,521)     (157,899)    ( 199,257)        5,104      255,152
Discontinued operations                       291,498        35,839        16,932       266,120       92,071
Extraordinary item                                  -             -             -             -            -
Net Income (Loss)                              43,977      (122,060)     (240,900)      271,224      347,223
Earnings per common
From continuing operations                $      (.01)  $      (.01)  $      (.02)  $       .00  $       .05
Discontinued operations                   $       .01   $       .00   $       .00   $       .05  $       .01
Extraordinary item                        $       .00   $       .00   $      (.00)  $       .00  $       .00
Earnings per
 Common Share                             $       .00   $      (.01)  $      (.02)  $       .05  $       .06
Weighted Average
 Shares Outstanding                        23,864,383    21,532,814    13,217,660     5,261,432    5,513,882
</TABLE>
<TABLE>
<CAPTION>

Balance  Sheet  Data:
                                                            As  of  September  30,
                                          ------------------------------------------------------------------
                                              2002          2001          2000         1999         1998
                                          ------------  ------------  ------------  -----------  -----------
<S>                                       <C>           <C>           <C>           <C>          <C>
Total  Assets                             $4,774,786    $4,115,102    $4,423,752    $4,259,980    $4,203,089
Total  Liabilities                         3,334,602     2,888,626     3,546,184     3,609,204     3,823,357
Stockholders' Equity                       1,440,184     1,226,476       877,568       650,776       379,732
</TABLE>






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

The  results  of  operations for the fiscal years ended September 30, 2002, 2001
and  2000  have  been  adjusted  to  reflect  the  disposition of the veterinary
division  in  February  2002  which  are  reported  as  discontinued operations.

RESULTS  OF  OPERATIONS
-----------------------

COMPARISON  OF  FISCAL  2002  AND  2001
---------------------------------------

Net  sales  for  fiscal  2002 were $31,998,836 compared to $24,143,949 in fiscal
2001, an increase of $7,854,887 or 32.5%. The increase was entirely attributable
to  the  Company's  wholesale  business.  Retail  dental  sales  declined  by
approximately  25%  while  the  retail  medical  sales  had  minimal  growth.



                                        9

<PAGE>


Gross  margins  for fiscal 2002 were $2,198,162 compared to $2,524,717 in fiscal
2001,  a decrease of $326,555 or 12.9%.Gross margins were 6.87 % of net sales in
2002  compared  to  10.46%  in  2001.  The  decline  in  gross  margins  can  be
attributable  to  two  factors.  The  first  factor  is  that  the margin in the
wholesale  division  is substantially lower than that of the retail division and
even  though  sales  increased  by  32.5% the margin on those increased sale was
between  4%  and 5% including one product with sales of approximately $4,000,000
that generated a gross profit of 1.5%. Retail dental sales decreased during 2002
due  to more competition in the field and this competition forced the Company to
lower  prices,  which  reduced  the  gross  profit  margin  on  those  sales  by
approximately  3%.

Operating  expenses  which  includes  both  selling  expenses  and  general  and
administrative  expenses for  fiscal 2002 were $2,515,907 compared to $2,303,284
in  fiscal  2001,an  increase  of $212,623 or 9.23%. Selling expenses for fiscal
2002 were $842,212 compared to $744,652 in fiscal 2001,an increase of $97,560 or
13.10%. Advertising costs including the cost of catalogues and mailing accounted
for  approximately  $73,000 of the increases while shipping cost increased by an
additional  $32,000.  Other  selling  expenses  including commissions and travel
showed  small  decreases  .

General  and  administrative  costs  in  fiscal 2002 were $1,673,695 compared to
$1,558,632  in  fiscal  2001,  an  increase  of  $115,063  or  7.38%.  Officers
compensation  in fiscal 2002 increased to $489,446 from $425,600 in fiscal 2001,
an  increase  of  $63,846  which  includes  an incentive based bonus of $110,000
compared  to a stock bonus of $86,100 in fiscal 2001.In fiscal 2001, the Company
recorded  a  reversal of a fiscal 2000 profit sharing contribution which reduced
fiscal  2001  general and administrative expenses by $50,000. There was no entry
for  profit  sharing  in  fiscal  2002.  In  fiscal  2002,  the Company incurred
consulting  expenses  of $81,642 compared to $9,236 for fiscal 2001, an increase
of  $72,406.  The majority of the consulting expenses incurred by the Company in
2002  was  for  reviewing  possible  acquisition  and  financing  the  proposed
acquisitions,  none  of which were consummated. For fiscal 2003, the Company has
determined  that  it  will  not  actively  seek  acquisitions  and that expenses
incurred  in  2002  for  consulting  will  be  non-recurring. Professional fees,
primarily  legal  expenses  in  fiscal 2002 were $142,405 compared to $46,777 in
fiscal  2001,  an  increase  of  $95,628.  The  increase  was  attributed to the
Company's  defense of a class action lawsuit instituted in the State of Indiana.
The Company's insurance carrier is now defending the Company against the lawsuit
,  therefore  the Company does not expect incur fees it incurred in fiscal 2002.

Interest expense for the fiscal year was $94,780 compared to $153,698 for fiscal
2001.  The  decrease  in  interest  expense  of $58,908 resulted from a $386,224
decrease  in  principal  outstanding  during  the year and declines in the prime
rate.

In  February 2002, the Company sold the veterinary division of Universal Medical
Distributors  for  $750,000.  Cost  and  expenses  related to the sale including
inventory  and  goodwill previously acquired. The Company recorded a gain on the
disposal  of  this  division  of  $281,201  net  of  related  income  taxes.


COMPARISON  OF  FISCAL  2001  AND  2000
---------------------------------------
Net  sales  for  fiscal 2001 were $24.14 million compared with $28.88 million in
fiscal  2000,  a decrease of 16.4%. The decrease in sales was primarily a result
of  decreases  in  the wholesale business. Retail dental, medical and veterinary
sales  increased  by  approximately 15%, while sales to wholesalers decreased by
approximately  21%.

Gross  margin  for  fiscal 2001 was $2.52 million compared with $2.76 million in
fiscal  2000,  but as a percentage of sales the gross margin increased to 10.47%
in  fiscal  2001  compared to 9.56% in fiscal 2000. The increase in gross margin
reflects  a  greater percentage of retail sales, which has a higher gross profit
margin  then  wholesale.

Operating  expenses  include  selling  expenses  and  general and administrative
expenses. Selling expenses for fiscal 2001 were $744,652 compared to $757,710 in
fiscal  2000,  a  decrease  of  1.7%.  The  Company reduced advertising costs by
$42,594  in  fiscal  2001  from  fiscal  2000, a decrease of 17.8%, but this was
offset  by an increase of $25,200 in shipping expense in fiscal 2001 from fiscal
2000,  an  increase  of  11.6%.  The  increase  in  shipping  expense was due to
surcharges  by  carriers  for  increased  fuel  costs.


                                       10
<PAGE>

General  and  administrative  cost  in fiscal 2001 were $1,558,632 compared with
$1,891,257  in fiscal 2000, a decrease of 17.6%. Officers compensation in fiscal
2001  was  $425,600 compared to $592,900 in fiscal 2000, a decrease of 28.2%. In
fiscal  2000  officers'  compensation  included  stock  bonus  of  approximately
$305,000  compared  to  stock bonuses in fiscal 2001 of $86,100. In fiscal 2000,
the  Company  recorded  a contribution to the profit sharing plan of $50,000. In
fiscal 2001, the company determined that the 2000 contribution would not be made
and  recognized a $50,000 reduction in general and administrative expenses. As a
result  of  the  reduction  in revenue, other office expenses including mailing,
printing  and  stationary,  and  telephone decreased by approximately $66,500 in
fiscal  2001  from  fiscal  2000.

Other  expenses  in  fiscal  2001 include $340,225 of business acquisition costs
including  professional  and  consulting  fees  to  acquire  an  inactive public
company.  In  fiscal  2000,  the  company spun off its holding company incurring
professional  and  consulting  fees  of  $137,135.


LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------
As  of  September  30,  2002  the  Company  has  net  current working capital of
$1,342,622  an  increase  of  $313,992  from  September  30,  2001.  The Company
generated  cash  flows from operations of $450,623,primarily by having wholesale
customer  provide  advances  on  purchase  orders  which was used to acquire the
specific  inventory  for  these  orders.  At September 30,2002 the Company had a
$2,000,000 credit facility of which $650,000 was unused . Subsequent to the year
end,  the  Company  entered  into  a  new  financing  agreement with Rosenthal &
Rosenthal,  Inc,  increasing  the  credit  facility by $1,000,000 to $3,000,000.

For fiscal 2003, the Company has reduced its budget for both selling and general
and  administrative  expenses  by approximately $255,000 eliminating unnecessary
expenses  and  revising  some of the operations. In addition the Company expects
that  consulting  and  other  professional fees will be reduced by approximately
$150,000 which it estimated were non-recurring items. The above reductions would
provide  the  Company  with  income  from  operations based on the current sales
volume.

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

ITEM  8     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA
Appears  after  Item  14.

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

                                      None

                                       11

<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,
2001.

     Name                 Age              Position
     ----                 ---              --------

Dr.  Jan  Stahl           54          Chairman,  Chief  Executive  Officer
                                      Secretary,  Director

Peter  Steil              54          President,  Chief  Financial  Officer,
                                      Director

Kenneth  Levanthal        47          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.  Dr.  Stahl  received  his  DDS  Degree from New York
University  in  1974.

Peter Steil co-founded the Company along with Dr. Stahl in 1987 and has been its
President  and  Chief  Financial Officer since such time. From 1981 to 1987, Mr.
Steil  was President of LBS Interdent, Inc., a company engaged in dental product
sales.  From  1974  to 1981, Mr. Steil was employed as Director of International
Technical  Support  and  Sales  by  Degussa,  a  European based manufacturer and
distributor  of dental and medical supplies. Subsequently (from 1984 to 1986) he
was  employed  by  Orbident  International,  the international sales division of
Darby  Drugs.  Mr. Steil's training is in mechanical engineering having received
his  Technical  Degree  from  Tuebingen  University,  Germany,  in  1974.

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.
Mr.  Levanthal graduated from Boston University in 1977, receiving his Bachelors
Degree.


                                       12

<PAGE>


ITEM  11     EXECUTIVE  COMPENSATION

The  following table sets forth information relating to remuneration received by
executive  officers  and  directors  for  the  Company's most recent fiscal year
compared  with  the  previous  two  fiscal  years.

OWNERS  AND  MANAGEMENT
<TABLE>
<CAPTION>


                                                            Long  Term  Compensation
                                                            Securities    All
                         Annual Compensation (1) Restricted Underlying    Other
                         -----------------------
Name & Principal                                   Stock     Options of   Compen-
       Position   Year   Salary    Bonus           Awards       SARS       sation
----------------  ----  --------  -------          -------      ----       ------
<S>               <C>   <C>       <C>              <C>          <C>        <C>
Jan Stahl,        2002  $246,446  $77,000                   -0-        -0-          -0-
  CEO (1)         2001   222,000      -0-           43,200       -0-          -0-
                  2000   155,000      -0-          182,671       -0-          -0-

Peter Steil,      2002  $ 64,000  $16,500                   -0-        -0-          -0-
  President (1)   2001   124,800      -0-           43,200       -0-          -0-
                  2000   124,800      -0-          108,454       -0-          -0-

Kenneth           2001  $ 69,000  $16,500                   -0-        -0-          -0-
 Levanthal        2001    80,400      -0-           -0-          -0-          -0-
                  2000    88,400      -0-           14,257       -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.

The  following  table  sets forth, as of September 30, 2002, 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
-----------------------------  --------------------------  -------------------------
<S>                            <C>                         <C>
Dr. Jan Stahl
3141 Ann Street
Baldwin, NY 11510                               9,092,694                     36.08%

Peter Steil
57 Hewlett Avenue
P.O. Box 750
Point Lookout, NY 11569                         3,837,128                     15.22%

Kenneth Levanthal
24 Meadowbrook Road
Huntington Station, NY  11746                     354,000                      1.40%

All Directors and Officers
As a Group                                     12,533,822                     52.70%
</TABLE>




ITEM  13     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
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.  These issuances were considered exempt by reason of Section
4(2)  of  the  Securities  Act  of  1933.

                                       13

<PAGE>


                                    PART  IV
                                    --------

ITEM  14     EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND
             REPORTS  ON  FORM  8-K


      (a)  The following documents are filed as part of this report.
                                                                        PAGE
                                                                        ----
1.    Financial Statements:

      Report of Independent Certified Public Accountants.               F-1-F-2

      Balance Sheets as of September 30, 2002 and 2001.                 F-3

      Statements of Operations for the years ended
      September 30, 2002, 2001 , and 2000.                              F-4

      Statements of Changes in Stockholders' Equity
      For the years ended September 30, 2002, 2001 and 2000.            F-5

      Statements of Cash Flows for the years ended
      September 30, 2002, 2001 and 2000.                                F-6

      Notes to Consolidated Financial Statement.                        F-7-F-13

2.    Schedule II - Valuation and Qualifying Accounts.                  F-14

(b)   Exhibits.

      21     List  of  subsidiaries.

(c)     Reports  on  Form  8-K.


                                       14

<PAGE>

                                   SIGNATURES


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


                                APO HEALTH,  INC.



Date:     December  30,  2002      By:  /s/  Dr.  Jan  Stahl
                                        --------------------
                                        Dr.  Jan  Stahl,  Chairman,
                                        Chief  Executive  Officer
                                        and  Secretary
                                        (Principal  Executive  Officer)





Date:     December  30,  2002       By:  /s/  Peter  Steil
                                        -----------------
                                        Peter  Steil,  President  and
                                        Treasurer
                                        (Principal  Financial  and
                                        Accounting  Officer)


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



Date:     December 30,  2002       By:  /s/  Dr.  Jan  Stahl
                                        -------------------
                                        Dr.  Jan  Stahl,  Director



Date:     December 30,  2002       By:  /s/  Peter  Steil
                                             -----------------
                                        Peter  Steil,  Director



Date:     December  30,  2002       By:  /s/  Kenneth Leventhal
                                             ----------------------
                                        Kenneth  Leventhal,  Director




                                       15

<PAGE>

                                   EXHIBIT  21


                             LIST  OF  SUBSIDIARIES




APO  Health,  Inc.,  a  New  York  Corporation.

Universal  Medial  Distributors,  Inc.,  a  New  York  Corporation.



                                     - 16 -

<PAGE>

                             CERTIFICATE PURSUANT TO
                             -----------------------
                             18 U.S.C. SECTION 1350,
                             -----------------------
                             AS ADOPTED PURSUANT TO
                             ----------------------
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
                  ---------------------------------------------


In  connection with the Annual Report of APO Health ,Inc.(the "Company") on Form
10K  for  the fiscal year ended September 30,2002 as filed with the Securities &
Exchange  Commission  (the  "Report"),each of the undersigned, in the capacities
and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section
1350,  as  adopted  pursuant  to  Section 906 of the Sarbanes-Oxley Act of 2002,
that:

     1.   The  Report  fully  complies with the requirements of Section 13(a) or
          15(d)  of  the  Securities  Exchange  Act  of  1934;  and

     2.   The  information  contained  in  the  Report  Fairly  presents, in all
          material  respects , the financial condition and results of operations
          of  the  Company.


Dated:     December  30,  2002       By: /s/ Dr.  Jan  Stahl
                                          Dr.  Jan  Stahl
                                          Chief Executive Officer and Director


Dated:     December  30,  2002       By: /s/ Peter Steil
                                          Peter Steil
                                          Chief Financial Officer and Director


                                     - 17 -

<PAGE>


              CERTIFICATION  PURSUANT  TO RULE  13A-14  AND  15D-14
              -----------------------------------------------------
          UNDER  THE  SECURITIES  EXCHANGE  ACT  OF  1934,  AS  AMENDED
          -------------------------------------------------------------


     I,  Dr.  Jan  Stahl,  Chief  Executive Officer of APO Health, Inc., certify
that:

     1.  I  have reviewed this annual report on Form 10 KSB of APO Health, Inc.;

     2.  Based  on  my knowledge, this annual report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;

     3.  Based  on  my  knowledge, the financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
Registrant  as  of,  and  for,  the  periods  presented  in  this annual report;

     4.   The  registrant's  other  certifying officer and I are responsible for
          establishing  and  maintaining  disclosure controls and procedures (as
          defined  in  Exchange  Act Rules 13a-14 and 15d-14) for the Registrant
          and  we  have:

          (a)  designed  such  disclosure controls and procedures to ensure that
               material  information  relating  to the Registrant, including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual  report  is  being  prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's  disclosure
               controls  and  procedures  of a date within 90 days of the filing
               date  of  this  annual  report  (the  "Evaluation  ate");  and

          (c)  presented  in  this  annual  report  our  conclusions  about  the
               effectiveness  of the disclosure controls and procedures based on
               our  evaluation  of  the  Evaluation  Date;

     5.   The  registrant's other certifying officer and I have disclosed, based
          on  our  most  recent evaluation, to the registrant's auditors and the
          audit  committee  of  the  registrant's board of directors (or persons
          performing  the  equivalent  function):

          (a)  all  significant  deficiencies  in  the  design  or  operation of
               internal  controls  which could adversely affect the registrant's
               ability  to  record,  process summarize and report financial data
               and  have  identified  for the registrant's auditors any material
               weaknesses  in  internal  controls;  and

          (b)  any  fraud,  whether or not material, that involves management or
               other  employees  who have a significant role in the registrant's
               internal  controls;  and

                                     - 18 -


<PAGE>



     6.  The  registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard  to  significant  deficiencies  and  material  weaknesses.





Dated   December 30,  2002          By:   /s/  Dr.  Jan  Stahl
                                          --------------------
                                          Dr.  Jan  Stahl
                                          Chief  Executive  Officer and Director



                                     - 19 -

<PAGE>


              CERTIFICATION  PURSUANT  TO RULE  13A-14  AND  15D-14
              -----------------------------------------------------
          UNDER  THE  SECURITIES  EXCHANGE  ACT  OF  1934,  AS  AMENDED
          -------------------------------------------------------------


     I,  Dr.  Peter  Steil, Chief Financial Officer of APO Health, Inc., certify
that:

     1.     I  have  reviewed  this  annual report on Form 10 KSB of APO Health,
Inc.;

     2.     Based  on  my  knowledge,  this  annual  report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in light of the circumstances under which such
statements  were made, not misleading with respect to the period covered by this
annual  report;

     3.   Based  on  my knowledge, the financial statements, and other financial
          information  included  in  this  annual  report, fairly present in all
          material  respects  the financial condition, results of operations and
          cash  flows of the Registrant as of, and for, the periods presented in
          this  annual  report;

     4.   The  registrant's  other  certifying officer and I are responsible for
          establishing  and  maintaining  disclosure controls and procedures (as
          defined  in  Exchange  Act Rules 13a-14 and 15d-14) for the Registrant
          and  we  have:

          (a)  designed  such  disclosure controls and procedures to ensure that
               material  information  relating  to the Registrant, including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual  report  is  being  prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's  disclosure
               controls  and  procedures  of a date within 90 days of the filing
               date  of  this  annual  report  (the  "Evaluation  ate");  and

          (c)  presented  in  this  annual  report  our  conclusions  about  the
               effectiveness  of the disclosure controls and procedures based on
               our  evaluation  of  the  Evaluation  Date;

     5.   The  registrant's other certifying officer and I have disclosed, based
          on  our  most  recent evaluation, to the registrant's auditors and the
          audit  committee  of  the  registrant's board of directors (or persons
          performing  the  equivalent  function):

          (d)  all  significant  deficiencies  in  the  design  or  operation of
               internal  controls  which could adversely affect the registrant's
               ability  to  record,  process summarize and report financial data
               and  have  identified  for the registrant's auditors any material
               weaknesses  in  internal  controls;  and

          (e)  any  fraud,  whether or not material, that involves management or
               other  employees  who have a significant role in the registrant's
               internal  controls;  and


                                     - 20 -


<PAGE>



     6.  The  registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard  to  significant  deficiencies  and  material  weaknesses.



Dated    December 30,  2002      By: /s/  Peter  Steil
                                     ----------------------------
                                          Peter  Steil
                                          Chief  Financial  Officer and Director


                                     - 21 -

<PAGE>

                         INDEPENDENT  AUDITORS'  REPORT



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.,  as  of September 30, 2002 and 2001 the related consolidated statements of
operations,  stockholders' equity and cash flows for the years then ended. 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 auditing standards generally accepted
in the 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. as
of  September  30,  2002 and 2001, and the results of their operations and their
cash  flows  for  the years then ended, 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  schedule  listed in the index to the financial
statements  and  schedule 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 schedule for the years
ended September 30, 2002 and 2001 have been subjected to the auditing procedures
applied  in  the  audits  of the basic financial statements. In our opinion, the
supplemental  schedule  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.



Linder  &  Linder
Certified  Public  Accountants
Dix  Hills,  New  York
December  3,  2002



                                       F-1

<PAGE>

                         INDEPENDENT  AUDITORS'  REPORT



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


We  have  audited  the  accompanying  consolidated  statement  of  operations,
stockholders'  equity  and  cash  flows  of  APO Health Inc. for the year  ended
September  30,2000.  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  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in the 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  audit provides 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. as
of  September  30, 2000 and the results of its operations and its cash flows for
the year then ended, in conformity with accounting principles generally accepted
in  the  United  States.

Our audit was made to form an opinion on the basic financial statements taken as
a  whole.  The  supplemental  schedule  listed  in  the  index  to the financial
statements  and  schedule 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 schedule for the year
ended  September  30, 2000 has been subjected to the auditing procedures applied
in the audit of the basic financial statements. In our opinion, the supplemental
schedule  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.



MALONE  &  BAILEY,  PLLC

April  5,  2001
Houston,  Texas


                                       F-2

<PAGE>


                                APO HEALTH, INC.
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2002 AND 2001
<TABLE>
<CAPTION>


                                            ASSETS
                                            ------

                                                                         2002         2001
                                                                      -----------  -----------
CURRENT ASSETS
<S>                                                                   <C>          <C>
   Cash                                                               $  520,618   $  179,167
   Accounts receivable, net of allowance for
     doubtful accounts of $30,000 and $29,000                          1,511,295    1,768,501
   Inventory                                                           2,242,609    1,692,209
   Notes receivables                                                     258,500            -
   Due from officers                                                     113,905       99,844
   Deferred tax asset                                                     12,000       11,600
   Other current assets                                                   18,297      165,935
                                                                      -----------  -----------
  Total Current Assets                                                 4,677,224    3,917,256

Property and Equipment, net of accumulated
     Depreciation of $88,496 and $76,606                                  28,499       40,389
Goodwill, less accumulated amortization
     Of $-0- and $53,802                                                       -      125,537
Deferred tax asset                                                        61,563       24,420
Deposits                                                                   7,500        7,500
                                                                      -----------  -----------
  Total Assets                                                        $4,774,786   $4,115,102
                                                                      ===========  ===========

                             LIABILITIES  AND  STOCKHOLDERS'  EQUITY
                             ---------------------------------------

CURRENT LIABILITIES
   Bank notes payable                                                 $1,350,000   $1,736,224
   Accounts payable                                                    1,118,288    1,056,117
   Accrued expenses                                                      200,718       50,776
   Due to officer                                                              -       45,509
   Customer deposits                                                     665,596            -
                                                                      -----------  -----------
      Total Current Liabilities                                        3,334,602    2,888,626
                                                                      -----------  -----------
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, 24,554,227 and 23,132,089
     Shares issued and outstanding                                         4,904        4,626
   Paid in capital                                                     1,621,983    1,452,530
   Retained earnings (deficit)                                          (186,703)    (230,680)
                                                                      -----------  -----------
      Total Stockholders' Equity                                       1,440,184    1,226,476
                                                                      -----------  -----------
      Total Liabilities and Stockholders' Equity                      $4,774,786   $4,115,102
                                                                      ===========  ===========

See Accompanying Auditor' Report and Notes to Financial Statements.
</TABLE>

                                       F-3

<PAGE>


                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED SEPTEMBER 30, 2002, 2001 AND 2000
<TABLE>
<CAPTION>




                                                           2002          2001          2000
                                                       ------------  ------------  ------------
<S>                                                    <C>           <C>           <C>
Revenues                                               $31,998,836   $24,143,949   $28,882,347
Cost of revenues                                        29,800,674    21,619,232    26,118,517
                                                       ------------  ------------  ------------
Gross Margin                                             2,198,162     2,524,717     2,763,830

Operating Expenses
   Selling                                                 842,212       744,652       757,710
   General and administrative                            1,673,695     1,558,632     1,891,257
                                                       ------------  ------------  ------------
                                                         2,515,907     2,303,284     2,648,967
                                                       ------------  ------------  ------------

Income (loss) from operations                             (317,745)      221,433       114,863
                                                       ------------  ------------  ------------
Other Expenses
Interest expense                                            94,790       153,698       141,704
Holding company spin-off costs                                   -             -       137,135
Business acquisition costs                                       -       340,225             -
                                                       ------------  ------------  ------------
Total other expenses                                        94,790       493,923       278,839
                                                       ------------  ------------  ------------
(Loss) before provision for
 income   taxes                                           (412,535)     (272,490)     (163,976)
Provision for (recovery) of income tax                    (165,014)     (115,591)       35,281
                                                       ------------  ------------  ------------

Income (loss) from continuing operations                  (247,521)     (157,899)     (199,257)

Discontinued operations net of taxes of
195,059, $23,892, and $11,288                              291,498        35,289        16,932
Extraordinary item, net of taxes
   of $30,175                                                    -             -       (58,575)
                                                       ------------  ------------  ------------
Net Income (Loss)                                      $    43,977   $  (122,060)  $  (240,900)
                                                       ============  ============  ============

Basic and diluted
Earnings per common share
   From continuing operations                          $      (.01)  $      (.01)  $      (.02)
   Discontinued operations                                     .01           .00           .00
   Extraordinary item                                          .01           .00          (.00)
                                                       ------------  ------------  ------------

Net income (loss)per common shares                     $       .00   $      (.01)  $      (.02)
                                                       ============  ============  ============

Weighted average common
Outstanding                                             23,864,383    21,532,814    13,217,660
                                                       ============  ============  ============
</TABLE>

See Accompanying Auditors' Report and Notes to Financial Statements.

                                       F-4

<PAGE>


                               APO  HEALTH,  INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED SEPTEMBER 30, 2002 2001, AND 2000
<TABLE>
<CAPTION>


                                                                                Retained
                                               Common  Stock        Paid-In     Earnings     Treasury
                                           Shares       Amount      Capital     (Deficit)    Stock        Totals
                                           -----------  ----------  ----------  -----------  ----------   ----------
<S>                                                    <C>                      <C>          <C>         <C>
Balances,
September 30, 1999                           5,513,882   $  1,103   $  613,837   $  36,016        (180)   $  650,776

Retroactive stock split                      7,221,240        259          259           -           -
Cancellation of
Treasury stock                                (180,000)      (180)                                 180
Spin-off of Xetal,Inc.                                                 (96,264)     96,264           -             -
Issuance of stock
For debt                                       600,000        600      161,438           -           -       162,038
Issuance of stock
For services                                  1,061300      1,061      304,593                       -       305,654
Net (loss)                                           -                       -    (240,900)          -      (240,900)
                                           -----------  ----------  ----------  -----------  ----------   ----------
Balances,
September 30, 2000                          14,216,422      2,843      983,345    (108,620)          -       877,568

Retroactive stock split                      1,470,000         54          (54)
Issuance of stock for
Officers' bonus                                300,000        300       86,100                                86,400
Sale of stock                                  600,000        100      279,900                               280,000
Recapitalization
Reverse acquisition                          2,500,000        500         (500)
Issuance of stock
For services                                 4,145,667        829      103,739                               104,568
Net loss                                             -          -            -    (122,060)          -      (122,060)
                                           -----------  ----------  ----------  -----------  ----------   ----------
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
                                           ===========  ==========  ==========  ===========               ==========
</TABLE>

See  Accompanying  Auditors'  Report  and  Notes  to  Financial  Statements.

                                       F-5

<PAGE>


                               APO  HEALTH,  INC.
                    CONSOLIDATED  STATEMENTS OF  CASH  FLOWS
         FOR  THE  YEARS  ENDED  SEPTEMBER  30,  2002,  2001,  AND  2000
<TABLE>
<CAPTION>



                                                                          2002        2001         2000
                                                                       ----------  ----------  ------------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                    <C>         <C>         <C>
Net income (loss)                                                      $  43,977   $(122,060)  $  (240,900)
Adjustments to reconcile net income to net cash
   Net cash flows from operating activities
  Depreciation and amortization                                           11,890      16,900        30,370
  Bad debts                                                                2,515     (30,800)      (29,400)
  Deferred taxes                                                          37,543      (1,457)        6,937
  Stock issued for services                                               89,731     190,969       305,654
  Write-off of a deposit                                                                            20,000
  Gain on asset retirement                                                                           3,105
  Write off goodwill                                                                               125,537
Changes in:
  Accounts receivable                                                    256,569     429,560       344,857
  Inventory                                                             (550,400)    203,124      (619,757)
  Other current assets                                                   147,638    (135,693)       22,694
  Accounts payable                                                        62,171    (393,433)     (449,002)
  Accrued expenses                                                       149,942    (153,188)     (330,309)
  Income taxes payable                                                                            (107,491)
  Customers deposits payable                                             665,596           -             -
                                                                       ----------  ----------  ------------
Cash Flows provided by (used in
          Operating Activities                                           450,623       3,922    (1,043,242)
                                                                       ----------  ----------  ------------

CASH  FLOWS  FROM  INVESTING  ACTIVITIES
Notes receivables                                                        258,500
Purchase of property and equipment                                                                  (7,187)
Increase in deposits                                                           -                    (2,543)
                                                                       ----------               -----------
       Cash Flows (used in) Investing Activities                         258,500                    (9,730)
                                                                       ----------               -----------

CASH  FLOWS  FROM  FINANCING  ACTIVITIES
Advances from officer, net                                               (31,448)    (39,041)      116,645
Proceeds from bank notes payable, net                                   (336,224)   (156,446)      985,820
Proceeds from sale of stock                                                    -     280,000             -
                                                                       ----------  ----------  ------------
       Cash Flows provided by (used in)                                 (367,672)     84,513     1,102,465
                                                                       ----------  ----------  ------------
          Financing Activities

Net increase (decrease) in cash                                          341,451      88,435        49,493

Cash Balances
   Beginning of Period                                                   179,167      90,732        41,239
                                                                       ----------  ----------  ------------

   End of Period                                                       $ 520,618   $ 179,167   $    90,732
                                                                       ==========  ==========  ============

See Accompanying Auditors' Report and Notes to Financial Statements.
</TABLE>

                                       F-6
<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 Company
and  its  wholly-owned  subsidiary,  Universal  Medical  Distributors,  Inc.
("Universal")  distribute  disposable  medical  products  principally to dental,
medical  and  veterinary  professionals  and  wholesalers  in the United States,
principally  on  the  East  Coast.  Effective  June  13,  2001,
InternetFinancialCorp.com,  Inc.,  ("IFAN"),  a  Nevada corporation, which is an
inactive public company acquired APO, (collectively, the "Company"), pursuant to
a  tax-free  reorganization  agreement. The acquisition was accounted for by the
purchase  method  under  business  combinations  in  a  reverse  acquisition
transaction.  Concurrently,  IFAN changed its name to APO Health, Inc., a Nevada
corporation.

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

Revenue  recognition  occurs  when  products  are  shipped.

Advertising  is  expensed  as  incurred. For the years ended September 30, 2002,
2001  and 2000 advertising expense amounted to $303,849, $196,173, and $238,767,
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.

Goodwill  represents  the  excess of the cost of two companies acquired over the
fair  value of their net assets at the dates of acquisition in 1996 and is being
amortized  using  the  straight  line  method  over  15  years. Effective to the
issuance  of  FASB  No.  142  the  Company  discontinued  amortizing  goodwill.

The  Company  follows  Statement  of  Financial  Accounting  Standards  No. 121,
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  and  amounted  to $272,036 ,$240,709, and $215,510 for the
years  ended  September  30,  2002,  2001  and  2000,  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.

                                       F-7

<PAGE>

                               APO  HEALTH,  INC.
                 NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

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.

NOTE  2  -  SUPPLEMENTAL  CASH  FLOW  STATEMENT  DISCLOSURES


                                           2002      2001      2000
                                          -------  --------  --------

Cash paid during the year for:
  Interest                                $91,790  $143,901  $144,381
  Income taxes                                                $65,000

Non-cash transaction:
  Spin-off Xetal Inc.                                         $96,624
  Note payable paid by issuance of stock  $50,000            $162,038




NOTE  3  -  BANK  NOTES  PAYABLE

On  April  2,  2001,  the Company renewed its credit facility with HSBC Bank USA
that  provides  for  total  borrowings  that  may not exceed $2,000,000. Bankers
acceptances  and  letters  of  credit,  which  relate  to  specific  importation
transaction, may not exceed $500,000 each and own-note borrowing, which does not
relate  to specific transactions, may not exceed $1,500,000. The credit facility
is  collateralized  by  substantially all the Company's assets and is personally
guaranteed  by  the two majority Company stockholders. Interest of prime + 1% on
the  own-note  borrowings  is payable monthly and the bankers acceptance fees of
200  basis  points  above  the  discount  rate  are paid at the inception of the
bankers  acceptance. Borrowings on the credit facility are payable on demand, or
upon  maturity,  which  is  up  to  180  days  after the initiation of a bankers
acceptance  or  March  31,  2002, for own-note borrowings, whichever is earlier.

On April 2, 2001, the date the credit facility was renewed, outstanding own-note
borrowings  were  $1,949,000  and  the  $449,600  excess  over the sub-limit was
converted  to  a  term  loan  payable  over  one year in monthly installments of
$37,467.  Interest  will  be  at  the  bank's  prime  rate  plus  1%.

The  credit  facility  was extended through March 31,2003 with substantially the
same  terms.

Bank  Notes  Payable  at  September  30,2002  and  2001consist of the following:
<TABLE>
<CAPTION>



                        2002        2001
                     ----------  ----------
<S>                  <C>         <C>
Own Note Borrowing   $1,350,000  $1,370,000
Bankers Acceptances           -     103,958
Term Loan                     -     262,266
                     ----------  ----------

                     $1,350,000  $1,736,224
                     ==========  ==========
</TABLE>

                                       F-8

<PAGE>

                                 APO HEALTH INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  4  -  DEBT  FORGIVENESS

During 1996 and 1997, the Company raised $500,000 in  notes payable from several
individuals.  During  1998  and  1999,  the  Company  settled the above debts by
recording  an  extraordinary  gain.

During  2000,  several  former  note-holders  demanded  a  renegotiation  of the
settlement  and  the  Company  paid  an additional $88,750, which is shown as an
extraordinary  expense  net  of  taxes.


NOTE  5  -  INCOME  TAXES

Income  taxes  (benefit)  consist  of  the  following:
<TABLE>
<CAPTION>
                                                      2002       2001       2000
                                                   ----------  ---------  ---------
<S>                                                <C>         <C>        <C>
   Current                                            ( 7,498)  $(89,242)  $ 76,273
   Deferred                                            37,543     (1,457)   (29,704)
                                                   ----------  ---------  ---------

  Total                                            $   30,045   $(90,699)  $ 46,469
                                                   ----------  ---------  ---------
</TABLE>



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



                                                      2002       2001       2000
                                                   ----------  ---------  ---------
<S>                                                <C>         <C>        <C>
  Computed at the federal statutory
      Rate of 34%                                  $  25,168   $(72,338)  $   7,641
  State income tax (benefit)                           4,441    (12,560)      8,146
  Valuation allowance adjustment                     (22,300)    22,300      30,872
  Other adjustment                                    22,736    (28,101)   -      .
                                                   ----------  ---------  ---------

  Total                                            $  30,045   $(90,699)  $  46,569
                                                   ----------  ---------  ---------

The components of deferred taxes are as follows:
                                                                  2002       2001
                                                               ---------  ---------
  Deferred tax assets
     Allowance for doubtful accounts                           $  12,000   $ 11,600
     Depreciation                                                 11,693      8,520
     Net operating loss carryover, less
       Valuation allowance of $0 and$22,300                       27,300     20,000
  Reversal of valuation allowance                                 22,300
  Miscellaneous                                                        -     (4,100)
                                                               ---------  ---------
  Total deferred tax assets                                       73,563     36,020
  Less Current Portion                                            12,000     11,600
                                                               ---------  ---------
  Non current deferred tax asset                               $  61,563  $  24,420
                                                               ---------  ---------
</TABLE>

The  Company  has  a  net  operating loss carryover of approximately $124,000 to
offset  future  taxable  income.  The  carryover  expires  2017.


                                       F-9
<PAGE>



                               APO  HEALTH,  INC.
                 NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

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  is  due  on  January  31,2003.

In  Janaury,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 30,2002,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.

During  the fiscal year ended September 30, 2001, 300,000 shares of stock valued
at  $86,400  were issued to two officers as a bonus and the Company sold 500,000
shares  in  a  private  placement  which provided net proceeds to the Company of
$280,000.  The  inventors of the private placements received warrants to acquire
1,500,000 shares of Company stock at $1.00 per share. Such warrants expire April
24,  2004.

On  June 13, 2001, the Company acquired IFAN in a transaction accounted for as a
reverse  acquisition,  whereby  the  Company  is  treated  as  the  acquirer for
accounting  purposes.  Accordingly,  the Company's stockholders' equity has been
retroactively  restated  to  give effect to the acquisition. In conjunction with
the  reverse acquisition, the Company's shareholders other than the shareholders
that  purchased  the  500,000  shares in the private placement received 5.9 IFAN
shares for each APO share held, and 2,500,000 shares were issued to the existing
IFAN  shareholders.

In  conjunction with the acquisition 3,145,667 shares were issued to consultants
associated  with  the  acquisition.  The  consultants  also received warrants to
purchase 1,350,000 shares of the Company's stock at prices ranging from $1 to $2
that  expire  September  13,  2004.

In  addition, a consultant was issued 1,000,000 shares pursuant to a contract to
provide  investor relations services over the next twelve months. The investment
relations  consultant  received  warrants to purchase 1,000,000 share of Company
stock  at  prices  ranging from $1 to $2 per share. Such warrants expire June 5,
2006.


                                      F-10

<PAGE>


                               APO  HEALTH,  INC.
                 NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS



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  are  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.

On  July 22, 2002, the Company issued common stock purchase warrants for 260,000
shares  of  common  stock  exercisable  at $0.10 per share, and on September 27,
2002,  issued common stock purchase warrants for 1,875,000 shares exercisable at
$.04  per  share,  both  expiring  on  August  31,  2007

Pro  Forma  Disclosure
----------------------

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

                                              2002
                                              ----
                             As  Reported               Proforma
                             ------------               --------

Net  Income  (loss)          $43,977                    $(8,276)
Diluted  earnings  (loss)    $.00                       $(.00)

The estimated per share fair value of the warrants granted in July and September
2002  were  $.078 and $.0254 respectively using the Black Scholes option pricing
model  with  the follo9wing assumptions:  dividend yield 0%: expected volatility
rate  of 76.44%: risk free interest rate of 3.25%: and expected option life of 5
years  and  58  months  respectively.


NOTE  8  -  HOLDING  COMPANY  SPINOFF  COSTS  AND  BUSINESS  ACQUISITION  COSTS

During  fiscal  2002,  the  Company  incurred  $340,225  of  non-recurring costs
associated  with  the  acquisition  of  APO.

During  fiscal  2000, the Company incurred $137,135 in legal and accounting fees
was  incurred  in  connection  with  the  spin-off  of  Xetal  in December 1999.


NOTE  9  -  LEASES

The  Company  leases  11,800 square feet in New York and a small sales office in
Florida.  Both  leases are month-to-month with affiliated companies owned by the
Company's  officers  and shareholders. The affiliate's underlying New York lease
expires  in  2004  and  the  affiliate's  underlying  Florida  lease  expires in
September  2001. Lease payments made by the Company approximate the payments due
by  the  affiliated  companies. Rental expense was $73,881, $73,183, and $76,665
for  the  years-ended  September  30,  2002,  2001,  and  2000,  respectively.

Future minimum lease payments are, $71,916 in 2003, $74,364 in 2004, and $18,744
in  2005.

NOTE  10  -  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,  2002,  2001, and 2000, were $0, $0, and $50,000, respectively. During 2001,
the  Company  determined  it  will  not  make  its 2000 pension contribution and
recognized  such  contribution  as  income.

NOTE  11  -  COMMITMENTS  AND  CONTINGENCIES

Litigation

There  is  an  action  pending  in  the Circuit/Superior Court of Marion County,
Indiana  entitled  KENRO,  INC.,  ON  BEHALF  OF ITSELF AND ALL OTHERS SIMILARLY
SITUATED  AGAINST  APO  HEALTH, INC.  The lawsuit involves unsolicited broadcast
faxes  sent  in  the  state  and  has been certified as a class action suit. The
Company has petitioned the court to certify its class action certification order
for  interlocutory  appeal.  If  the Company can defeat the class certification,
then  the  plaintiff  is  limited to a single violation with a maximum potential
recovery  of $1,500. If the class certification issue is lost then the Company's
exposure  can  range  in  the  millions of dollars. The Company has filed a suit
seeking  indemnification  by or contribution from the vendors who sent the faxes
on  behalf  of  the  Company.  It  is  the  Company's belief and contention that
damages,  if any, which may be awarded to the plaintiff are covered by insurance
up  to  policy  limits.

                                      F-11

<PAGE>


                               APO  HEALTH,  INC.
                  NOTES  TO  CONSOLIDATED  FINANCIAL STATEMENTS


However, on October 24, 2001, the Company was named as a defendant in MERCHANT'S
&  BUSINESS  MEN'S  MUTUAL  INSURANCE  COMPANY VS. APO HEALTH, INC. Merchant's &
Business  Men's  Mutual  Insurance  Company  issued a Commercial Blanket  Excess
Liability  insurance  policy to the Company for one year commencing February 27,
2000  up through February 27, 2001. Merchant's & Business Men's Mutual Insurance
Company  alleges in its complaint that policy coverage with the Company does not
extend  to  the  allegations  set  forth  in  the aforementioned Kenro suit. The
Company,  however, disagrees and contends that the policy issued by Merchant's &
Business Men's Mutual Insurance Company obligates them to cover any damages that
the  Company may incur, as a result of an unfavorable verdict in the Kenro suit.

On  July1,  2002,the  Court  granted  the  intervention  motion  of  the  Kenro
plaintiffs,  and,  as  a  matter  of  law,  denied Merchants' motion for summary
judgement  and  granted  the  Company's  cross-motion for summary judgement, and
finding  that  the claims asserted against the Company in the Kenro lawsuit fell
within the terms of the Merchants' policies. As a result, the Court ordered that
Merchants  has  a duty to defend and indemnify the Company in the Kenro lawsuit.
Additionally,  the Court found alternatively, that the disclaimer of coverage by
Merchants  was  untimely, so that Merchants would not be allowed to rely upon or
raise  any  coverage defenses. The Court also found that the Company is entitled
to be reimbursed for the legal fees that it incurred, and ordered that a hearing
be  conducted  to  determine  the  amount  that  Merchant  owed.

Merchants subsequently filed a motion for reargument of its unsuccessful summary
judgement  motion,  and  papers in opposition have been submitted by the Company
and the Kenro plaintiffs to the Court. The Company and the Kenro plaintiffs have
argued  that  the  Court should adhere to its original decision for a variety of
reasons.  Merchants  has also filed an appeal to the Appellate Division from the
Court's  July  1,2002 Order, and in the event the Court adheres to its decision,
it  is expected that Merchants will again notice an appeal, and move to have the
two  appeals  consolidated.

Employment  Agreement

Effective  October 1, 2001, the Company has entered into a three-year employment
agreement  with  its  chief executive officer that provides for a minimum annual
salary  of  $250,000  with  incentives  based  on  the  Company's  attainment of
specified  levels  of  sales  and  earnings  as  defined  in  the agreement. The
employment  agreement  expires  September  30,  2004  and shall be automatically
renewed  for  successive  periods  of one year unless either party gives written
notice  to  terminate  the  agreement.

NOTE  12  -  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,
2002,  the  Company  had  $495042  on deposit, in excess of the $100,000 in each
bank,  which  is  insured  under  federal  law.

                                      F-12

<PAGE>

                               APO  HEALTH,  INC.
                  NOTES  TO  CONSOLIDATED  FINANCIAL STATEMENTS

The  concentration  of  credit  risk  due  to  receivables is minimal due to the
Company's  diverse  customer  base.  Two customers account for approximately 36%
,27%  and  34%  of  sales  for the years ended September 30, 2002 ,2001and 2000,
respectively.  No  single  vendor  accounts  for  greater than 10% of purchases.


NOTE  13-SUBSEQUENT  EVENTS

On  October  29,  2002,  the  Company  entered  into  a financing agreement with
Rosenthal  & Rosenthal, Inc. The financing agreement provides the Company with a
maximum  credit  facility  not  to  exceed  $3,000,000.The  credit  facility  is
collateralized  by  substantially  all  the Company's assets and $500,000 of the
facility  is  personally  guaranteed  by  Dr.  Jan Stahl,Chairman and CEO of the
Company.  Interest  is  payable monthly on the average daily loan balance at the
announced  prime rate of JP Morgan Chase bank plus 2.5%. This agreement is for a
period  of  three years through October 31,2005 and may be extended on a year to
year  basis  thereafter  unless  terminated  as  provided  in  the  agreement.

On  December  1,2002, the Company entered into a sublease agreement to lease out
2000  square feet of its warehouse through November 30,2005 at an annual rate of
$18,000  per  annum  with  annual  increases  of  4%  on  the  anniversary date.


                                      F-13


<PAGE>






                               APO  HEALTH,  INC.
                                  SCHEDULE  II
                      VALUATION  AND  QUALIFYING  ACCOUNTS
         FOR  THE  YEARS  ENDED  SEPTEMBER  30,  2002,  2001,  AND  2000

<TABLE>
<CAPTION>
                                        Balance,                               Balance,
 Year  Ended                          Beginning  of                            End  of
September 30,      Account                Period      Additions   Reduction    Period
-----------------  -----------------  -------------  -----------  ----------  --------
<S>                <C>                <C>             <C>          <C>         <C>

             2000  Allowance for
                   Doubtful accounts  $ 89,200        $ -          $ (29,400)  $59,800

             2001  Allowance for
                   Doubtful accounts  $ 59,800        $ -          $ (30,800)  $29,000

                   Allowance for
                   Deferred Taxes     $      -        $ 22,300     $  -        $22,300

             2002  Allowance for
                   Doubtful accounts  $ 29,000        $ 1,000         -        $30,000

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

</TABLE>
                                      F-14

<PAGE>