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

                                    FORM 10-K

(Mark One)

|X|  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the fiscal year ended September 30, 2005

                                       or

|_|  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 ______________________

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

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

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

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

        Securities registered pursuant to Section 12(b) of the Act: None

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

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

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act. Yes |_| No |X|

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. |_|

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

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

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

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

                       [COVER CONTINUES ON FOLLOWING PAGE]


<PAGE>

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates  computed by reference to the average bid and asked price of such
common  equity,  as of the last business day of the  registrant's  most recently
completed second fiscal quarter was $789,376.

The number of shares  outstanding of each of the registrant's  classes of common
stock as of December 23, 2005 was 42,387,712 shares.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

<PAGE>


                                APO HEALTH, INC.
                                    FORM 10-K
                      FISCAL YEAR ENDED SEPTEMBER 30, 2005

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                        Page
                                     PART I

<S>                                                                                                                      <C>
          Item 1.       Business.....................................................................................     1
          Item 1A.      Risk Factors.................................................................................     3
          Item 1B.      Unresolved Staff Comments....................................................................     6
          Item 2.       Properties...................................................................................     6
          Item 3.       Legal Proceedings............................................................................     6
          Item 4.       Submission of Matters to a Vote of Security Holders..........................................     7

                                     PART II

          Item 5.       Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
                                   Purchases of Equity Securities....................................................     7
          Item 6.       Selected Financial Data......................................................................     8
          Item 7.       Management's Discussion and Analysis of Financial Condition and Results of Operations........     8
          Item 7A.      Quantitative and Qualitative Disclosures About Market Risk...................................    12
          Item 8.       Financial Statements and Supplementary Data..................................................    12
          Item 9.       Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.........    12
          Item 9A.      Controls and Procedures......................................................................    12
          Item 9B.      Other Information............................................................................    12

                                    PART III

          Item 10.      Directors and Executive Officers of the Registrant...........................................    12
          Item 11.      Executive Compensation.......................................................................    14
          Item 12.      Security Ownership of Certain Beneficial Owners and Management and Related
                                 Stockholder Matters.................................................................    15
          Item 13.      Certain Relationship and Related Transactions................................................    15
          Item 14.      Principal Accounting Fees and Services.......................................................    15

                                     PART IV

          Item 15.      Exhibits, Financial Statement Schedules......................................................    16

          SIGNATURES.................................................................................................    17

</TABLE>


<PAGE>
                                     PART I

ITEM 1 -BUSINESS

History

     APO Health,  Inc., a Nevada  corporation (the "Company") was formed in 1997
as Dom Caribe,  Ltd. On July 1, 1998, the Company  changed its name to Caribbean
Ventures,  Inc.,  and then to  Internetfinancialcorp.com,  Inc. on February  11,
2000.

     Pursuant to a Tax-Free  Reorganization  Agreement  effective June 13, 2001,
the Company  acquired  3,046,300 of the 3,209,563  outstanding  shares of common
stock of APO  Health,  Inc.,  a New York  corporation  ("APO New  York"),  which
represented  approximately  91% of the then outstanding share of common stock of
APO New York. The Company subsequently became the sole owner and operator of the
business and properties of APO New York and in connection  therewith the Company
changed its name to APO Health, Inc.

Business of the Company

     The present  operations of the Company  through its  subsidiaries,  APO New
York  and  Universal  Medical   Distributors,   Inc.,  a  New  York  corporation
("Universal"), consist of distributing and supplying 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.  Throughout the remainder of this report,  references
to the "Company" refer to APO Health, Inc., a Nevada corporation,  together with
its subsidiaries APO New York and Universal.

     Management has elected to maintain its low margin wholesale business and at
the same time  increase  its market share in school,  retail  medical and dental
areas.  The current  distribution of revenue is 87% from wholesale  accounts and
13% from retail accounts.

Products and Services

     Currently, the Company distributes  approximately 2,000 different products.
New  products  are  constantly  added as the  needs of the  Company's  customers
change.  The Company obtains its products from vendors  throughout the world and
does not manufacture any products except for its emergency dental kits. Although
the Company  does not have any  contractual  arrangements  with  suppliers,  the
Company believes that there are adequate  alternative  suppliers for any product
it sells.

Sales and Marketing

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

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

Potential Impact of Changing Economic Factors in the Health Care Markets

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

                                       1
<PAGE>

Potential Impact of FDA and Government Regulation

     Some of the Company's  products may be regulated as medical  devices by the
U.S. Food and Drug  Administration  (the "FDA") pursuant to the Federal Food and
Drug  Cosmetics  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  regulation  obligates  manufacturers,
including distributors such as the Company, to provide information to the FDA on
injuries  alleged to have been  associated  with the use of a product or certain
product  failures which could cause injury.  The FDA is empowered to take action
against  manufacturers of regulated  products  including both civil and criminal
remedies,  and may also  prohibit  or  suspend  the  marketing  of  products  if
circumstances  so  warrant.  Any  such  action  by the  FDA  could  result  in a
disruption of the Company's operations for an undetermined time.

Product Liability: Cost and Availability of Insurance

     Providers  of  medical   products  to  hospitals   and  other  health  care
institutions  may encounter  liability for damages to patients in the event that
their  products  prove to be defective.  Certain of the  Company's  products and
proposed products will be utilized in medical procedures where the Company could
be subject to claims for injuries  alleged to have  resulted from the use of its
products.  Recent  developments  in the  insurance  industry  have  reduced  the
availability and increased the cost of liability insurance coverage. At present,
the Company has no product liability insurance.

Lack of Patent Protection

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

Competition

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

Dependence Upon Third Party Manufacturers/Suppliers

     The Company does not directly  manufacture any of the products it presently
sells.  The  products  distributed  by the  Company  are,  for  the  most  part,
manufactured  by third parties in the United  States,  the Far East,  Mexico and
Canada.  In general,  the Company  does not have  long-term  contracts  with its
manufacturers.  Although the Company believes  alternative sources for virtually
all of its products are readily  available,  there can be no assurance  that the
available  supply from such  alternative  sources  would be adequate to meet the
demand for production that could result from any  significant  disruption in the
current manufacturers and suppliers of the Company's products.

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.

                                       2
<PAGE>
Employees

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

ITEM 1A- RISK FACTORS

     The Company's business involves a high degree of risk.  Potential investors
should carefully  consider the risks and  uncertainties  described below and the
other  information  in this  report  before  deciding  whether  to invest in the
Company's securities. Each of the following risks could materially and adversely
affect the Company's business,  financial condition,  and results of operations.
This could cause the trading  price of the  Company's  common  stock to decline,
with the loss of part or all of your investment.

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

     The Company reported net losses totaling $663,837,  $1,048,828 and $517,526
for the fiscal years ended September 30, 2005, 2004 and 2003,  respectively.  As
of September 30, 2005 the Company had a  stockholders  deficit of $136,571 and a
working capital deficit of $146,062.  Adverse  economic  conditions have limited
the  ability of the  Company to market its  products  at amounts  sufficient  to
recover its operating and  administrative  costs. The Company is in violation of
the  tangible  net worth  covenant  of its  credit  facility  with  Rosenthal  &
Rosenthal,  Inc.  (See  Note 4 to the  accompanying  financial  statements).  As
further described under Item 3 of this report, the Company is a defendant in two
lawsuits commenced by The Proctor & Gamble Company and Alcoa, Inc., based on the
sale of products of those two companies,  which  unbeknownst to the Company were
counterfeit products.  In view of these matters,  realization of a major portion
of the assets in the accompanying  balance sheet is dependent upon the Company's
ability to meet its financing  requirements,  and the success of its operations.
Management  believes that actions  presently being taken to revise the Company's
operating and financial  requirements provide the opportunity for the Company to
continue  as a going  concern.  The  accompanying  financial  statements  do not
include any adjustments  that might be necessary should the Company be unable to
continue  as a going  concern.  While the  Company  believes  it has  sufficient
capital  resources to fund  operations  for the next 12 months,  the Company may
require  additional  capital to  continue  operations  beyond such  period.  The
Company may raise additional working capital either through private  placements,
public offerings and/or bank financing. There are no assurances that the Company
will be able to achieve a level of revenues adequate to generate sufficient cash
flow from operations or obtain additional  financing through private placements,
public offerings and/or bank financing  necessary to support its working capital
requirements.  To the extent that funds  generated from any private  placements,
public offerings and/or bank financing are  insufficient,  the Company will have
to raise additional  working capital.  No assurance can be given that additional
financing will be available,  or if available,  will be on acceptable  terms. If
adequate  working  capital  is not  available  the  Company  will be  forced  to
discontinue operations, which would cause investors to lose the entire amount of
their investment.  In the event the Company is forced to discontinue operations,
it may divest itself of its  subsidiaries APO New York and Universal and attempt
to locate and  negotiate  with  another  company  for the  purpose of a business
combination of the two companies in order to obtain another business opportunity
for the Company's shareholders.

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

     As  further  described  under  Item 3 of  this  report,  the  Company  is a
defendant in two lawsuits  commenced by The Proctor & Gamble Company ("P&G") and
Alcoa,  Inc.  ("Alcoa"),  based on the sale of products of those two  companies,
which  unbeknownst  to  the  Company  were  counterfeit  products.  The  Company
purchased  several  shipments of products abroad and unbeknownst to the Company,
some  non-P&G and  non-Alcoa  products  were  included in these  shipments.  The
Company  is  cooperating  with P&G and Alcoa as well as the  federal  regulatory
agencies and is supplying P&G and Alcoa with all of its  documentation  in order
to assist  P&G and Alcoa in their  efforts  to remove  these  products  from the
marketplace  and to  allow  them to  trace  back the  source  of these  improper
products.  The Company lost three  wholesale  customers due to these  litigation
proceedings resulting in reduced revenue of approximately  $4,250,000 during the
fiscal year ended  September  30,  2005.  Although  the Company  believes it has
meritorious   defenses  and  is  vigorously  defending  its  position  in  these
proceedings,  the  litigation  proceedings  may cause the  Company to lose other
customers which would further worsen the Company's financial condition and could
force the Company to discontinue operations.

                                       3
<PAGE>
THE COMPANY MAY INCUR MATERIAL PRODUCT LIABILITY COSTS.

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

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

     Some of the Company's  products may be regulated as medical  devices by the
U.S. Food and Drug  Administration  (the "FDA") pursuant to the federal Food and
Drug Cosmetic Act and are, or may be, subject to regulation by other federal and
state governmental agencies. The FDA has comprehensive authority to regulate the
development,   production,   distribution  and  promotion  of  medical  devices.
Furthermore,  certain states impose additional  requirements on the distribution
of medical  devices.  The FDA may  require  pre-market  approval  of some of 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  regulation  obligates   manufactures
including,  in  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. Compliance
with any of these  laws  and  regulations  may  impose  additional  costs on the
Company, which may negatively affect the Company's financial condition.

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

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

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

     The Company is highly  dependent on third party vendors to manufacture  and
distribute its products.  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.
If the Company's suppliers are unable to deliver product, the Company's revenues
and ultimately profits will be reduced.


                                       4
<PAGE>
THE COMPANY IS SUBJECT TO RISKS  SPECIFIC TO FOREIGN  MANUFACTURING  WHICH COULD
CAUSE  INCREASES  IN PRODUCT  COSTS AND DELAYS IN PRODUCT  DELIVERY  WHICH WOULD
RESULT IN LOSS OF REVENUES AND GOODWILL.

     Foreign   manufacturing  is  subject  to  a  number  of  risks,   including
transportation delays and interruptions, political and economic disruptions, the
imposition  of  tariffs  and  similar  import/export  controls  and  changes  in
governmental  policies.  Although,  to date, 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.

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

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

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

     The public market for the Company's common stock has historically been very
volatile.  During the past two fiscal  years  ended  September  30, 2005 and the
quarter ended December 31, 2005, the market price for the Company's common stock
has ranged from $0.01 to $0.18 (See Item 5 of this  report).  Any future  market
price for the Company's  common stock is likely to continue to be very volatile.
This price volatility may make it more difficult for you to sell shares when you
want at prices you find attractive.  The Company's  litigation  proceedings with
The  Proctor & Gamble  Company  and  Alcoa,  Inc.  may have  contributed  to the
volatility  in the  Company's  stock  price.  In  addition,  the stock market in
general has experienced  extreme price and volume  fluctuations  that have often
been unrelated or  disproportionate  to the operating  performance of companies.
Broad market  factors and the  investing  public's  negative  perception  of the
Company's  business  may reduce the  Company's  stock price,  regardless  of the
Company's operating  performance.  Further,  the market for the Company's common
stock is limited and the  Company  cannot  assure you that a larger  market will
ever be developed or  maintained.  As of December  13, 2005,  the average  daily
trading  volume of the  Company's  common  stock over the past three  months was
approximately  25,689  shares.  The last reported  sales price for the Company's
common stock as of December 13, 2005, was $0.015 per share.  Market fluctuations
and volatility,  as well as general economic,  market and political  conditions,
could reduce the market price of the Company's  common stock. As a result,  this
may make it difficult or impossible  for you to sell the Company's  common stock
for a positive return on your investment.

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

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

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

o    the broker or dealer  receive from the investor a written  agreement to the
     transaction,  setting forth the identity and quantity of the penny stock to
     be purchased

     In order to approve a person's  account for  transactions  in penny stocks,
the broker or dealer must:

o    obtain financial  information and investment  experience  objectives of the
     person; and

o    make a reasonable  determination  that the transactions in penny stocks are
     suitable  for that  person  and the  person has  sufficient  knowledge  and
     experience in financial  matters to be capable of  evaluating  the risks of
     transactions in penny stocks.

                                       5
<PAGE>

     The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure  schedule  prescribed by the SEC relating to the penny stock
market, which, in highlight form:

o    sets  forth the basis on which the  broker or dealer  made the  suitability
     determination; and

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

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

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

ITEM 1B- UNRESOLVED STAFF COMMENTS.

     Not applicable.

ITEM 2.  PROPERTIES.

     The Company's  offices are located at 3590 Oceanside Road,  Oceanside,  New
York.  The premises  contain  approximately  9,800 square feet under a five-year
lease (the  "Lease")  which  initially  expired on November 30, 2004 (the "Lease
Term").  The Lease Term has been extended for an  additional  five years through
November  30,  2009.  These  premises  are  occupied  under a Lease  between the
landlord,  who is an  unaffiliated  third party,  and an affiliated  company PJS
Trading,  Corp.,  a New York  corporation  ("PJS") owned by the Company's  Chief
Executive  Officer,  Dr. Stahl,  formed for the express purpose of entering into
the Lease.  The Company occupies these premises under an oral agreement with PJS
and Dr.  Stahl  whereby  the Company  has agreed to  discharge  all of the Lease
obligations  with the  landlord.  The annual lease  payment  under the new lease
starts at  approximately  $77,300 per year and increases to $80,000 in the fifth
year with  additional  increases  for real  estate  taxes  over the Lease  Term.
Neither PJS nor Dr. Stahl derives any profit from the Lease nor will they during
the balance of the Lease Term.  Management  of the Company  believes the current
facility is adequate for its current operations. Effective December 1, 2004, the
Company has subleased for a one year period  approximately  2,000 square feet of
the warehouse space at approximately $30,000 per year.

ITEM 3.  LEGAL PROCEEDINGS

     On or about July 7, 2004,  the Company  was served  with  process in a suit
commenced by The Proctor & Gamble  Company  ("P&G") in the US District Court for
the Eastern District of New York, against it and a number of other parties.  P&G
claimed that the Company, as well as others were involved in the sale of Pantene
and Head and Shoulders  products which were not manufactured by P&G. The Company
purchased  several  shipments of these  products  abroad and  unbeknownst to the
Company, some non P&G products were included in these shipments. The Company has
cooperated with P&G as well as the federal regulatory  agencies and has supplied
P&G with all of its  documentation  in order to  assist  P&G in its  efforts  to
remove these  products  from the  marketplace  and to allow it to trace back the
source of these improper products. The lawsuit is seeking, among other relief, a
request for a temporary and  permanent  injunction  from selling such  products.
Recently,  the complaint was amended to include a number of additional  parties,
including  Dr.  Jan  Stahl,   chief  executive  officer  of  the  Company.   The
co-defendants in the suit have asserted cross-complaints against the Company for
an  unspecified  amount to be  determined  at trial based upon their receipt and
subsequent resale of these products.

                                       6
<PAGE>

     On or about  December  3, 2004,  the  Company and Dr. Jan Stahl were served
with process in a suit commenced by Alcoa, Inc. (Alcoa) in the US District Court
for the Eastern District of New York,  against it and a number of other parties.
Alcoa  claimed that the Company,  as well as others were involved in the sale of
products which were not  manufactured by Alcoa.  The Company  purchased  several
shipments of these  products  abroad and  unbeknownst  to the Company,  some non
Alcoa products were included in these shipments. The Company is cooperating with
Alcoa as well as the federal regulatory agencies and is supplying Alcoa with all
of its  documentation  in order to assist  Alcoa in its efforts to remove  these
products from the  marketplace and to allow it to trace back the source of these
improper products.  The lawsuit is seeking,  among other relief, a request for a
temporary and permanent injunction from selling such products.  . Recently,  the
complaint was amended to include a number of additional  parties,  including Dr.
Jan Stahl, chief executive officer of the Company. The co-defendants in the suit
have asserted  cross-complaints against the Company for an unspecified amount to
be determined at trial based upon their receipt and  subsequent  resale of these
products.

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

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

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

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

                                     PART II

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

     The Company's  common stock is currently  quoted on the OTC Bulletin  Board
under the symbol  "APOA."  The high and low  prices of the common  stock for the
quarterly periods of the two years ended September 30, 2005 are as follows:

                                                Common Stock Prices
                                               ---------------------
            Quarter Ended                      High              Low
            -------------                      ----              ---
            December 31, 2003                 $0.05            $0.04
            March 31, 2004                    $0.18            $0.05
            June 30, 2004                     $0.15            $0.09
            September 30, 2004                $0.09            $0.05

            December 31, 2004                 $0.09            $0.04
            March 31, 2005                    $0.07            $0.03
            June 30, 2005                     $0.04            $0.02
            September 30, 2005                $0.06            $0.02

            December 31, 2005                 $0.03            $0.01

     As of December 23, 2005, there were approximately 1000 holders of record of
the Company's common stock.

Dividend Policy

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

Recent Sales of Unregistered Securities

     On October 9, 2004 and  November 10,  2004,  the Company  issued a total of
348,000 shares of common stock to  professionals  and  consultants  for services
rendered  valued at $14,880.  These  issuances  were  exempt  from  registration
requirements under Section 4(2) of the Securities Act of 1933, as amended.

     On  March  8,  2005 and  March  29,  2005,  the  Company  issued a total of
1,700,000 shares of common stock to  professionals  and consultants for services
rendered  valued at $34,000.  These  issuances  were  exempt  from  registration
requirements under Section 4(2) of the Securities Act of 1933, as amended.

     On April 1,  2005,  the  Company  issued a total  of  4,166,667  shares  of
restricted  common stock to Dr. Jan Stahl, CEO of the Company,  as consideration
for $50,000 of deferred  executive  compensation.  This issuance was exempt from
registration  requirements  under Section 4(2) of the Securities Act of 1933, as
amended.

     During the fiscal year ended September 30, 2005, the Company issued a total
of 2,548,000  shares of common stock for  consulting and  professional  services
valued at $64,880.  These issuances were exempt from  registration  requirements
under Section 4(2) of the Securities Act of 1933, as amended.

                                       7
<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, 2005.  Periods prior to
2002 have been restated to give effect for discontinued operations.

Statement of Operations Data:
<TABLE>
<CAPTION>

                                            Fiscal Years Ended September 30,
                           --------------------------------------------------------------------------------------
                                 2005              2004              2003                2002             2001
                                 ----              ----              ----                -----            ----

<S>                               <C>              <C>               <C>                <C>              <C>
Revenue                      $15,014,295      $35,918,887       $47,448,232        $ 31,998,836     $  24,143,949
Gross Profit                   1,243,500        1,163,017         1,978,024           2,198,162         2,524,717
Selling, General and
 Administrative Expenses       1,858,361        2,658,149         2,323,949           2,515,907         2,303,284
Net Income (loss)
From continuing
operations                     (663,837)       (1,048.828)          (517,256)          (247,521)         (157,899)
Discontinued operations                                                                 291,498            35,839
Net Income (Loss)              (663,837)       (1,048,828)         (517,256)             43,977          (122,060)
Earnings per common
From continuing operations   $     (.02)      $      (.03)      $      (.02)       $       (.01)    $        (.01)
Discontinued operations               -                 -       $       .01        $        .00
Earnings per
 Common Share                $     (.02)      $      (.03)      $      (.02)       $        .00     $        (.01)
Weighted Average
 Shares Outstanding          39,166,845        34,338,680        27,003,847          23,864,383        21,532,814


Balance Sheet Data:

                                                     As  of  September  30,
                           ----------------------------------------------------------------------------------------
                                 2005              2004              2003                2002             2001
                                 -----             ----             -----                -----            ----

Total  Assets                $1,360,620       $  2,538,748      $ 3,698,086        $  4,774,786     $   4,115,102
Total  Liabilities            1,497,191          2,126,362        2,475,222           3,334,602         2,888,626
Stockholders' Equity           (136,571)           412,386        1,222,864           1,440,184         1,226,476
</TABLE>

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

Forward-Looking Statements

     This annual report on Form 10-K contains  forward-looking  statements.  All
statements  other than  statements of historical fact made in this annual report
are forward looking.  In particular,  the statements  herein regarding  industry
prospects  and  future   results  of   operations  or  financial   position  are
forward-looking  statements.  Forward-looking  statements  reflect  management's
current expectations and are inherently uncertain.  The Company's actual results
may differ significantly from management's expectations.

Results of Operations

Comparison of Fiscal 2005 and 2004

     Revenue for the year ended September 30, 2005 was  $15,014,295  compared to
$35,918,887  for the year ended  September  30,  2004.  This was a  decrease  of
$20,904,592  or 58.2%.  The decrease in revenue has been  quantified  into three



                                       8
<PAGE>

distinct categories described below. Sales in 2004 to customers that were either
no longer in  business  in 2005 or who were no longer  buying  from  alternative
sources resulted in a decrease in revenue of $1,969,421.  Revenue from customers
who are  involved in the lawsuits  with Proctor & Gamble  Company and Alcoa were
$4,238,273  in 2004.  These  companies  no  longer  purchase  products  from the
Company.  In prior years,  the Company  purchased many different  products which
were  imported  from both Canada and Europe.  In 2004,  the Company  reduced the
amount of imports  from those areas as the United  States  dollar  decreased  in
value against the Canadian dollar,  British pound and the Euro. The value of the
Canadian  dollar,  British pound and the Euro continue to be strong  compared to
the value of the United States dollar. Therefore, the Company has eliminated the
importation  of many of those  foreign  products.  The  decrease in revenue from
those customers  which had previously  purchased these products from the Company
was $14,955,667 for the year ended September 30, 2005.

     The cost of revenue for the year ended  September 30, 2005 was  $13,770,795
compared  to  $34,305,870  for the year ended  September  30,  2004.  This was a
decrease of  $20,535,075  or 59.9%.  The gross profit  margin for the year ended
September  30, 2005 was 8.3%  compared to 4.5% for the year ended  September 30,
2004,  which  included a write-off  equal to 1.3% for  products  which had to be
recalled  and  destroyed  after  it was  determined  that  those  products  were
counterfeit.  The  increase in the gross  profit  margin is directly  related in
percentage of sales coming from retail  clients that have higher profit  margins
than  wholesale  customers and the increase in profit margin of products sold to
wholesale customers.

     Selling  expense  for the year ended  September  30, 2005 was  $410,526,  a
decrease of $140,704 from the year ended September 30, 2004. The major decreases
in selling  expenses  were  shipping  costs  which  decreased  by  $100,168  and
commission expense which decreased by $76,687, both due to the decrease in sales
volume. Advertising and related expenses increased by $18,447 which included the
write-off  of  $59,061  of costs  related  to a sales  catalogue  which has been
abandoned.  Travel and entertainment  expense increased by approximately $16,000
during  the year  ended  September  30,  2005 as the  Company  searched  for new
customers to make up for the lost  revenue  created by the  lawsuits,  customers
that are no longer in business, and elimination of sales of products from Canada
and Europe.

     General and  administrative  expense for the year ended  September 30, 2005
were $1,447,835,  a decrease of $659,084 from the year ended September 30, 2004.
The largest  decrease was a reduction in bad debt expense of $555,291.  In 2004,
the  Company  wrote-off  advance  for  prepaid  merchandise  and  increased  the
allowance  for bad debt  expense for a total bad debt  expense of  $701,901.  In
2005, the Company  increased the allowance for doubtful  accounts by $25,397 and
wrote off an additional  $121,213 primarily related to the counterfeit  products
sold  in  2004.  Compensation  and  related  employment  expenses  decreased  by
approximately  $97,000  due to the  reduction  in the  number of  employees  and
reduction in compensation of the two officers of the Company. Consulting expense
decreased by approximately  $40,000 as a prior  consulting  contract expired and
was not renewed. Professional fees increased during the year ended September 30,
2005 by approximately  $94,200. Legal expenses to defend the lawsuits by Proctor
& Gamble Company and Alcoa were approximately $85,000.

     Interest  expense  for the year ended  September  30, 2005 was  $48,976,  a
decrease of $47,475  from the year ended  September  30, 2004 .The Company has a
financing agreement (see note 4 to the financial  statements) which provides for
a maximum line of credit of $500,000 where  collections  are applied against the
line of credit on a daily  basis and  proceeds  from the line of credit are only
taken when needed to pay down  liabilities.  In addition,  due to the decline in
revenue and related accounts  receivable,  the Company's average borrowing under
the line of credit decreased by approximately 50%.

Comparison of Fiscal 2004 and 2003

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

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

                                       9
<PAGE>

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

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

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

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

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

Financial Condition, Liquidity and Capital Resources

     As of  September  30,  2005,  the Company had  working  capital  deficit of
$146,062, a decrease of $542,824 from the Company's working capital at September
30, 2004. The Company's loss from continuing operations of $663,837 for the year
ended  September  30,  2005 was funded by the  decrease  in working  capital and
increase in cash flows from  operations  for the year ended  September  30, 2005
which was  $211,245.  At September 30, 2005 the Company had available a $500,000
credit  facility  with  Rosenthal  &  Rosenthal,  Inc.,  of which  $457,369  was
outstanding  at  September  30, 2005 (see Note 4 to the  accompanying  financial
statements).  The credit facility is  collateralized by substantially all of the
Company's  assets and $500,000 of the facility is  personally  guaranteed by Dr.
Jan Stahl,  Chief  Executive  Officer of the Company.  Under terms of the credit
facility, the lender may call the loan if the Company is in violation of certain
restrictive covenants. At September 30, 2005, the Company is in violation of its
net worth and working  capital  covenants.  Rosenthal & Rosenthal has not waived
the  violations,  and  accordingly,  the  entire  amount  of the  obligation  is
callable.  The credit facility matured on October 31, 2005 and has been extended
through  December  31, 2005 under  substantially  the same terms as the original
agreement.  The  Company  and the  lender  have  agreed to  continue  the credit
facility on a month to month  basis.  The Company has  requested an extension of
the credit facility through March 31, 2006.


     Exclusive of the increase in bad debt expense,  legal  expenses  related to
the Alcoa and  Proctor & Gamble  litigations  and the  expiration  of a one year
consulting  agreement in January 2004, the Company reduced selling,  general and
administrative   expenses  by  approximately  $350,000  during  the  year  ended
September 30, 2005.  The Company has also increased its gross profit margin from
4.6% to 8.3%.

                                       10
<PAGE>

     Adverse  economic  conditions  have  limited  the ability of the Company to
market  its  products  at  amounts  sufficient  to  recover  its  operating  and
administrative  costs.  As a result,  the Company  incurred  losses of $663,837,
$1,048,828  and 517,256 for the three years ended  September 30, 2005,  2004 and
2003,  respectively.  The Company is in  violation  of the  working  capital and
tangible net worth covenants of its lending agreement which makes the obligation
callable (see Note 4 to the accompanying  financial  statements).  As more fully
described  in Item 3 of this  report  and Note 9 of the  accompanying  financial
statements,  the Company is a co-defendant in two lawsuits with Proctor & Gamble
and  Alcoa,  involved  in the sale of  products  of those two  companies,  which
unbeknownst to the Company,  were  counterfeit  products.  It is not possible to
predict at this time the ultimate  outcome of the  litigation or the extent,  if
any, of the effect on the Company.

     In view of these  matters,  realization of a major portion of the assets in
the accompanying  balance sheet is dependent upon the Company's  ability to meet
its  financing  requirements,  and the  success  of its  operations.  Management
believes that actions  presently  being taken to revise the Company's  operating
and financial  requirements  provide the opportunity for the Company to continue
as a going concern. The financial statements do not include any adjustments that
might be necessary  should the Company be unable to continue as a going concern.
While  the  Company  believes  it  has  sufficient  capital  resources  to  fund
operations for the next 12 months, the Company may require additional capital to
continue operations beyond such period.

Off-Balance Sheet Arrangements

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

Contractual Obligations

     As of  September  30,  2005,  the  Company  had the  following  contractual
obligations:
<TABLE>
<CAPTION>

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

<S>                              <C>        <C>           <C>            <C>
Operating Lease Obligations      $310,363   $70,571       $147,050       $92,742
</TABLE>
Critical Accounting Policies

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

     Revenue recognition occurs when products are shipped.

     Advertising  is expensed as  incurred.  For the years ended  September  30,
2005,  2004  and  2003  advertising  expense  was  $78,847,   $25,730,  $72,029,
respectively.

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

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

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

     Shipping  and  handling is expensed as  incurred.  Shipping and handling is
included in selling expense was $196,469,  $296,637,  and $242,730 for the years
ended September 30, 2005, 2004 and 2003, 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.

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

                                       11
<PAGE>

     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.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Exchange Rate Risk. - The products  distributed by the Company are, for the
most part,  manufactured  by third parties in the United  States,  the Far East,
Mexico  and  Canada.  As a result,  the  Company's  financial  results  could be
affected by factors such as changes in foreign  currency  exchange rates or weak
economic conditions in foreign markets. The Company has virtually eliminated its
purchases  from Europe as the cost of products have increased  substantially  as
the value of the U.S.  Dollar has declined  substantially  against both the Euro
and the British Pound.

     Credit Risk. - The Company  maintains  cash  balances at various  financial
institutions. At times, such balances exceed the insured limits of the financial
institution.  To date,  the  Company  has not  experienced  any  losses  in such
accounts.  As of  September  30, 2005,  the Company had $489,600 on deposit,  in
excess of the $100,000 in each bank, which is insured under federal law.

     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.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial  information  required by this Item is attached hereto at the
end of  this  report  beginning  on  page  F-1  and is  hereby  incorporated  by
reference.

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

     None

ITEM 9A - CONTROLS AND PROCEDURES

     As of the end of the period covered by this report,  the Company  conducted
an evaluation, under the supervision and with the participation of its principal
executive officer and principal  financial  officer of the Company's  disclosure
controls and  procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the
Exchange Act). Based upon this  evaluation,  the Company's  principal  executive
officer and principal financial officer concluded that the Company's  disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  by the  Company in the  reports  that it files or  submits  under the
Exchange Act is: (1) accumulated and  communicated to the Company's  management,
including its principal  executive officer and principal  financial officer,  as
appropriate to allow timely decisions  regarding  required  disclosure;  and (2)
recorded, processed,  summarized and reported, within the time periods specified
in the  Commission's  rules and  forms.  There  was no  change in the  Company's
internal  controls or in other factors that could affect these  controls  during
the Company's last fiscal quarter that has materially affected, or is reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.

ITEM 9B - OTHER INFORMATION

         None
                                    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
December 23, 2005.

Name                  Age      Position
-------------------  --------- ---------------------------------------------
Dr. Jan Stahl         57       Chairman, Chief Executive Officer, Acting Chief
                               Financial Officer, Principal Accounting Officer,
                               Secretary, Director
Kenneth Leventhal     50       Secretary and Director

                                       12
<PAGE>

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

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

Family Relationships

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

Involvement in Legal Proceedings

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

Audit Committee Financial Expert

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

Code of Ethics

     The Company has adopted a Code of Ethics and Business  Conduct that applies
to all of its officers, directors and employees. The Code of Ethics was filed as
Exhibit  14.1 to the  Company's  annual  report on Form 10-K for the fiscal year
ended September 30, 2004.  Upon request,  the Company will provide to any person
without charge a copy of its Code of Ethics.  Any such request should be made to
Attn: Dr. Jan Stahl,  APO Health,  Inc., at 3590 Oceanside Rd.,  Oceanside,  New
York 11575. The Company's telephone number is (800) 365-2839.  The Company is in
the process of building a section of its website at www.apohealth.com  where its
Code of Ethics will be available to investors.

Compliance with Section 16(a) of the Exchange Act

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive  officers and persons who beneficially own more than ten
percent of a registered  class of the Company's  equity  securities to file with
the SEC  initial  reports of  ownership  and reports of change in  ownership  of
common stock and other equity securities of the Company. Officers, directors and
greater than ten percent stockholders are required by SEC regulations to furnish



                                       13
<PAGE>

the Company  with copies of all Section  16(a) forms they file.  Based solely on
the  review of copies of such  reports  furnished  to the  Company  and  written
representations  that no other reports were required,  the Company believes that
during the  fiscal  year ended  September  30,  2005,  its  executive  officers,
directors and all persons who own more than ten percent of a registered class of
the  Company's  equity  securities   complied  with  all  Section  16(a)  filing
requirements.

ITEM 11 - EXECUTIVE COMPENSATION

     The  following   table  sets  forth   information   concerning   the  total
compensation the Company has paid or that has accrued on behalf of the Company's
chief executive  officer and other executive  officers with annual  compensation
exceeding  $100,000 during the fiscal years ending  September 30, 2005, 2004 and
2003.
<TABLE>
<CAPTION>

                           Summary Compensation Table
                                                                                             Long-Term
                                                                                            Compensation
                                                                               ---------------------------- ----------
                                                         Annual  Compensation                Awards                  Payouts
                                                     ------------------------- ----------------------------- -----------------------
                                                                                 Restricted    Securities                  All

                                                                     Other
                                                                     Annual                    Under-lying    LTIP        Other
             Name and                                               Compen-        Stock        Options/    Payouts      Compen-
        Principal Position        Year   Salary ($)   Bonus ($)    sation ($)   Award(s) ($)    SARs (#)       ($)      sation ($)
------------------------------- -------- ----------- ------------- ----------- --------------- ------------ ---------- -------------
<S>                             <C>     <C>              <C>           <C>          <C>           <C>          <C>         <C>
Jan Stahl, Chief Executive      2005    $231,128         $    0       -0-          -0-           -0-          -0-         -0-
     Officer (1)                2004    $250,000         $    0       -0-          -0-           -0-          -0-         -0-
                                2003    $222,150     $156,723 (2)     -0-        34,666          -0-          -0-         -0-
</TABLE>

(1) It is noted that the figures listed as "salary" include both base salary and
earned  commissions,  but do not include annual bonus amounts, if any, which are
listed separately under the "bonus" column.  (2) Dr. Stahl has waived his rights
to $180,000 of his bonus for the benefit of the Company.

Options Grants

     The  Company  made no grants of stock  options  during  fiscal  year  ended
September 30, 2005 to the named executive officer.

Option Exercises in Last Fiscal Year

     The named  executive  officer did not exercise any stock options during the
fiscal year ended September 30, 2005.

Executive Employment Agreements

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

Benefit Plans for Executive Officers and Directors

     On  July  22,  2002,  the  Company  adopted  a Bonus  Compensation  Warrant
Agreement,   whereby,  the  Company  would  issue  Bonus  Compensation  Warrants
equivalent  to 10% of the price of any  merger  or  acquisition  brought  to the
Company.  All of the warrants being  exercisable  into shares of common stock at
80% of the 20 day average bid and ask price of the Company's  common stock.  The
Company is  authorized up to a maximum  aggregate of 3,000,000  shares of common
stock available for any Bonus Compensation Warrants.

     On July 22, 2002, the Company  issued a common stock  purchase  warrant for
260,000  shares of common stock  exercisable  at $.10 per share and on September
27, 2002, a common stock purchase  warrant for 1,875,000  shares  exercisable at
$.04 per share,  both expiring on August 31, 2007.  That issuance was considered
exempt from  registration  by reason of Section  4(2) of the  Securities  Act of
1933.

                                       14
<PAGE>

Board Compensation

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

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table  sets  forth,  as  of  December  23,  2005,   certain
information regarding the beneficial ownership of the Company's common stock.

<TABLE>
<CAPTION>

                                  Number of Shares Owned               Percentage
      Name                      of Record and Beneficially    Common Stock Outstanding (1)
      ----                      --------------------------    ----------------------------
<S>                                       <C>                             <C>
Dr. Jan Stahl
3141 Ann Street
Baldwin, NY 11510                      15,279,179                         36.05%

Kenneth Leventhal
24 Meadowbrook Road
Huntington Station, NY  11746             796,000                          1.88%

All Directors and Officers
As a Group                            16,075,179                          37.93%
</TABLE>

(1) Based upon a total of 42,387,712 shares outstanding as of December 23, 2005.

Securities Authorized for Issuance Under Equity Compensation Plans

     As of September 30, 2005,  there were no compensation  plans of the Company
pursuant to which any of the Company's  securities are issuable upon exercise of
outstanding  options,  warrants or other rights and the Company did not have any
compensation plan with securities  remaining  available for future issuance upon
exercise of options, warrants or other rights.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company's offices are occupied by the Company under a lease between the
landlord  who is an  unaffiliated  third  party and an  affiliated  company  PJS
Trading,Corp.,  a New York  corporation  ("PJS")  owned by Dr.  Jan  Stahl.  The
Company  occupies the  premises  under an oral  agreement  with PJS and Dr Stahl
whereby  the  Company  discharges  all the  obligations  of the  lease  with the
landlord.  Neither PJS nor Dr. Stahl  derives any profit from the Lease nor will
they during the balance of the Lease Term.  Management believes the terms of the
lease are at least as favorable as the Company could obtain from unrelated third
parties.

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

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

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit fees

     The  aggregate  fees  billed  for  professional  services  rendered  by the
Company's  principal  accountants  for  the  audit  of the  Company's  financial
statements,  for  the  reviews  of  the  financial  statements  included  in the
Company's annual report on Form 10-K, and for other services  normally  provided
in  connection  with  statutory  filings  were $29,250 and $27,500 for the years
ended September 30, 2005 and 2004, respectively.

                                       15
<PAGE>
All Other Fees

     The Company did not incur any fees for other professional services rendered
by its principal accountants during the years ended September 30, 2005 and 2004.

Audit Committee Pre-Approval Policies and Procedures

     The Board of  Directors  acts as the audit  committee,  and  consults  with
respect to audit policy, choice of auditors, and approval of out of the ordinary
financial transactions.

                                     PART IV

ITEM 15- EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

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

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

     Financial Statements                                               Page

     Report of Independent Registered Public Accounting Firm            F-1

     Balance Sheets as of September 30, 2005 and 2004                   F-2

     Statements of Operations for the years ended
     September 30, 2005, 2004, and 2003                                 F-3

     Statements of Changes in Stockholders' Equity
     For the years ended September 30, 2005, 2004 and 2003.             F-4

     Statements of Cash Flows for the years ended
     September 30, 2005, 2004 and 2003                                  F-5

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

     Schedule to Consolidated Financial Statements                     F-12

(b) Exhibits.

Exhibit Number
                                   Description
--------------------------------------------------------------------------------
3.1  Restated  Articles  of  Incorporation  (incorporated  by  reference  to the
     Company's  Form 8-K filed with the  Securities  and Exchange  Commission on
     October 12, 2001)
3.2  Certificate  of Amendment to Articles of  Incorporation,  changing  name to
     Interfinancialcorp.com,  Inc.  (Incorporated  by reference to the Company's
     Form 8-K filed with the Securities  and Exchange  Commission on October 12,
     2001)
3.3  Certificate of Amendment to Articles of Incorporation, changing name to APO
     Health,  Inc.  (Incorporated  by reference to the Company's  Form 8-K filed
     with the Securities and Exchange Commission on October 12, 2001)
3.4  By-laws  of  the  Company  (Incorporated  by  reference  to  the  Company's
     registration  statement  on Form 10 (File  No.  000-30074)  filed  with the
     Securities and Exchange Commission on February 19, 1999)
10.1 APO  Health,  Inc.  2005  Professional/Consultant  Compensation  Plan dated
     February 23, 2005 (Incorporated by reference to the Company's  registration
     statement on Form S-8 (File No.  333-123141)  filed with the Securities and
     Exchange Commission on March 4, 2005)
10.2 APO Health,  Inc. 2005(B)  Professional/Consultant  Compensation Plan dated
     October 15, 2005  (Incorporated by reference to the Company's  registration
     statement on Form S-8 (File No.  333-129249)  filed with the Securities and
     Exchange Commission on October 26, 2005)
14.1 Code of Ethics and  Business  Conduct  (Incorporated  by  reference  to the
     Company's  annual  report on Form 10-K for the fiscal year ended  September
     30, 2004, filed with the Securities and Exchange Commission on December 28,
     2004)
21.1 List of Subsidiaries
31.1 Certification  by  Chief  Executive  Officer  and  Acting  Chief  Financial
     Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act
32.1 Certification  by  Chief  Executive  Officer  and  Acting  Chief  Financial
     Officer,  required by Rule  13a-14(b) or Rule 15d-14(b) of the Exchange Act
     and Section 1350 of Chapter 63 of Title 18 of the United States Code

                                       16
<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: January 13, 2006             By:  /s/ Dr. Jan Stahl
                                    ----------------------------------------
                                   Dr. Jan Stahl
                                   Chairman, Chief Executive Officer, Acting
                                   Chief Financial Officer and Principal
                                   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.

<TABLE>
<CAPTION>

SIGNATURE                                  TITLE                            DATE
---------                                  -----                            ----


<S>                                       <C>                                <C>
 /s/ Dr. Jan Stahl            Chairman, Chief Executive Officer,      January 13, 2006
-------------------
Dr. Jan Stahl                 Acting Chief Financial Officer and
                              Principal Accounting Officer



 /s/ Kenneth Levanthal         Director and Secretary                 January 13, 2006
-----------------------
Kenneth Leventhal
</TABLE>

                                       17
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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

We have  audited the  accompanying  consolidated  balance  sheets of APO Health,
Inc.,  and  subsidiaries  as of  September  30,  2005 and  2004 and the  related
consolidated  statements of operations,  stockholders' equity and cash flows for
each of the three years ended September 30, 2005. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going  concern.  However,  the  following  conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  As  discussed in Notes 1, 4 and 9, adverse  economic  conditions  have
limited the ability of the Company to market its products at amounts  sufficient
to recover its operation and administrative  costs. As a result, the Company has
incurred  substantial losses for the past three years. In addition,  the Company
is in violation of its working  capital and tangible net worth  covenants in its
lending agreement and therefore,  its obligation to the factor is callable.  The
Company has pledged all of its assets as collateral for the  obligations  and if
called by factor, it would seriously impair the Company's ability to continue as
a going  concern  and to  realize  its  investments  in  assets  through  future
successful  operations.  The Company is also the  defendant in several  lawsuits
alleging  the  sale  of  counterfeit  products  and  the  receipt  of  a  deemed
preferential distribution in a bankruptcy proceeding. At present time, it is not
possible to predict the outcome,  but any negative  outcome  would have a severe
affect on the Company.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of APO Health, Inc. and
subsidiaries  as of  September  30,  2005 and  2004,  and the  results  of their
operations and their cash flows for each of the three years ended  September 30,
2005, 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 schedules are presented to comply with the rules and  regulations
under the  Securities  and Exchange Act of 1934 and are not otherwise a required
part of the basic financial  statements.  The supplemental  schedule for each of
the three years ended  September 30, 2005,  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.


/s/ Linder & Linder
-----------------------------
Linder & Linder
Certified Public Accountants
Dix Hills, New York
December 2, 2005

                                       F-1

<PAGE>


                                APO HEALTH, INC.
                           CONSOLIDATED BALANCE SHEETS
                           September 30, 2005 and 2004

<TABLE>
<CAPTION>

                                     ASSETS
                                                                           2005                      2004
                                                                        ------------              ------------
<S>                                                                         <C>                        <C>
Current Assets
   Cash                                                                $    634,161               $   574,732
   Accounts receivable, net of allowance for
     doubtful accounts of $405,397 and $380,000                             452,878                 1,179,078
   Inventory                                                                228,008                   583,040
   Other current assets                                                      36,082                   186,274
                                                                        ------------              ------------
         Total Current Assets                                             1,351,129                 2,523,124

Property and Equipment, net of accumulated
     Depreciation of $89,639 and $88,430                                      1,991                     8,124
Deposits                                                                      7,500                     7,500
                                                                       -------------              ------------
         Total Assets                                                  $  1,360,620               $ 2,538,748
                                                                       =============              ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Bank notes payable                                                  $    457,369               $   609,185
   Accounts payable                                                         783,069                 1,168,278
   Accrued compensation                                                      42,473                    89,224
   Customer deposits                                                        214,280                   259,675
                                                                       ------------               ------------
         Total Current Liabilities                                        1,497,191                 2,126,362
                                                                       -----------                ------------
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, 42,387,712 and 35,673,045
     Shares issued and outstanding                                            8,478                     7,135
   Paid in capital                                                        2,271,845                 2,158,308
   Retained earnings (deficit)                                           (2,416,894)               (1,753,057)
                                                                       -------------              ------------
         Total Stockholders' Equity                                        (136,571)                  412,386
                                                                       -------------              ------------
         Total Liabilities and Stockholders' Equity                    $  1,360,620               $ 2,538,748
                                                                       =============              ============

</TABLE>


      See Accompanying Auditor' Report and Notes to Financial Statements.




                                       F-2


<PAGE>

                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
<TABLE>
<CAPTION>


                                                   2005                     2004                      2003
                                               -------------           --------------            --------------

<S>                                                  <C>                     <C>                       <C>
Revenues                                       $ 15,014,295            $  35,918,887             $  47,448,232
Cost of revenues                                 13,770,795               34,305,870                45,470,208
                                               -------------            -------------            --------------
Gross Margin                                      1,243,500                1,613,017                 1,978,024

Operating Expenses
   Selling                                          410,526                  551,230                   576,250
   General and administrative                     1,447,835                2,106,919                 1,747,699
                                              --------------           --------------            --------------
                                                  1,858,361                2,658,149                 2,323,949
                                              --------------           --------------            --------------

(Loss) from operations                             (614,861)              (1,045,132)                 (345,925)
                                              --------------           --------------            --------------
   Other Income (Expenses)
   Recovery of Litigation Costs                           -                   92,755                         -
   Interest expense                                 (48,976)                 (96,451)                  (92,466)
                                              --------------           --------------            --------------
Total other expenses                                (48,976)                  (3,696)                  (92,466)
                                              --------------           --------------            --------------

(Loss) before provision for
   income   taxes                                  (663,837)              (1,048,828)                 (438,371)
Provision for (recovery) of income tax                    -                        -                    79,155
                                              --------------           --------------            --------------

Net Income (Loss)                             $    (663,837)           $  (1,048,828)            $    (517,526)
                                              ==============           =============             ==============

Earnings per common share and earnings
Per common share assuming dilution

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

Weighted average common
Outstanding                                      39,166,845               34,338,680                27,003,847
                                              ==============           ==============            ==============
</TABLE>

      See Accompanying Auditors' Report and Notes to Financial Statements.


                                       F-3


<PAGE>


                                APO HEALTH, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
             FOR THE YEARS ENDED SEPTEMBER 30, 2005, 2004, AND 2003
<TABLE>
<CAPTION>


                                                                       Retained
                                Common Stock           Paid-In         Earnings
                          Shares           Amount      Capital         (Deficit)      Totals
                       ------------    -----------   ------------   -----------    -----------
<S>                         <C>             <C>          <C>             <C>            <C>
Balances
September 30, 2002      24,554,227         $4,904     $1,621,983   $  (186,703)    $1,440,184

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

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

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

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

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

Balance
September 30, 2004      35,673,045          7,135      2,158,308    (1,753,057)       412,386

Issuance of stock
For services             2,548,000            510         64,370                       64,880

Conversion of
Accrued compensation     4,166,667            833         49,167                       50,000

Net (loss)                                                            (663,837)      (663,837)
                       ------------    -----------   ------------   -----------    -----------


Balance
September 30, 2005      42,387,712         $8,478     $2,271,845   $(2,416,894)     $(136,571)
                       ============    ===========   ============   ===========    ===========
</TABLE>



      See Accompanying Auditors' Report and Notes to Financial Statements.


                                       F-4

<PAGE>

                                APO HEALTH, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED SEPTEMBER 30, 2005, 2004, AND 2003
<TABLE>
<CAPTION>


                                                                   2005             2004              2003
                                                               -----------       ------------     -----------
<S>                                                                 <C>              <C>              <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)                                              $ (663,837)       $(1,048,828)     $ (517,526)
Adjustments to reconcile net income (loss) to
   net cash flows from operating activities
         Depreciation and amortization                              6,133              9,879          10,496
         Bad debts                                                 25,397            330,000          20,000
         Deferred taxes                                                 -                             73,563
         Stock issued for services                                 64,880            148,350         300,206
Changes in:
         Accounts receivable                                      700,803            193,663        (211,446)
         Inventory                                                355,032            813,165         846,404
         Other current assets                                     150,192           (131,261)        (36,716)
         Accounts payable                                        (385,209)           244,249        (194,259)
         Deferred compensation                                      3,249            (50,354)         67,765
         Customers deposits payable                               (45,395)           (34,912)       (371,009)
                                                               -----------       ------------     -----------
               Cash Flows provided by (used in)
              Operating Activities                                211,245            473,951         (12,522)
                                                               -----------       ------------     -----------

CASH  FLOWS  FROM  INVESTING  ACTIVITIES
Notes receivables                                                       -              4,566         253,934
Advances from officer, net                                              -                  -         (15,000)
                                                               -----------       ------------     -----------
             Cash Flows provided by
                Investing Activities                                    -              4,566         238,934
                                                               -----------       ------------     -----------

CASH  FLOWS  FROM  FINANCING  ACTIVITIES

Proceeds (repayment) from bank notes payable, net                (151,816)          (398,938)       (341,877)
Proceeds from sale of stock                                             -             90,000               -
                                                               -----------       ------------     -----------

              Cash Flows (used in)                               (151,816)          (308,938)       (341,877)
                                                               -----------       ------------     -----------
                 Financing Activities

Net increase (decrease) in cash                                    59,429            165,579        (115,645)

Cash Balances
   Beginning of Year                                              574,732            405,153         520,618
                                                               -----------       ------------     -----------

   End of Year                                                 $  634,161        $   574,732      $  405,153
                                                               ===========       ============     ============

</TABLE>


      See Accompanying Auditors' Report and Notes to Financial Statements.


                                       F-5


<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - SUMMARY OF ACCOUNTING POLICIES

Nature of business  and basis of  consolidation-  APO Health,  Inc.  ("APO") was
incorporated under the laws of the state of New York in August 1978. APO and its
wholly-owned  subsidiary,  Universal Medical  Distributors,  Inc.  ("Universal")
distribute  disposable  medical  products  principally to dental and medical and
professionals  and  wholesalers  in the United  States,  principally on the East
Coast.  Effective June 13, 2001,  InternetFinancialCorp.com,  Inc.,  ("IFAN"), a
Nevada   corporation,   which  is  an  inactive  public  company  acquired  APO,
(collectively,  the "Company"), pursuant to a tax-free reorganization agreement.
The  acquisition  was  accounted  for  by the  purchase  method  under  business
combinations in a reverse acquisition  transaction.  Concurrently,  IFAN changed
its name to APO Health, Inc., a Nevada corporation.

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

Operating  deficit and economic  conditions
Adverse  economic  conditions  have limited the ability of the Company to market
its products at amounts  sufficient to recover its operating and  administrative
costs. As a result,  the Company  incurred losses of $663,837,  $1,048,828,  and
$517,526  for the three  years  ended  September  30,  2005.  The  Company is in
violation of the working capital and tangible net worth covenants of its lending
agreement  (see note  4).As  more fully  described  in note 9, the  Company is a
co-defendant  in two lawsuits  with Proctor & Gamble and Alcoa,  involved in the
sale of products of those two companies,  which unbeknownst to the Company, were
counterfeit  products.  It is not  possible to predict at this time the ultimate
outcome of the litigation or the extent, if any of the effect on the Company. In
addition,  the trustee of a former customer in bankruptcy is seeking return of a
payment  which it deems to be a  preferential  distribution.  The above  factors
cause substantial doubt of the Company's ability to continue as a going concern.

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

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

Revenue recognition- Revenue recognition occurs when products are shipped.

Advertising-  Advertising is expensed as incurred.  Advertising  expense for the
years ended September 30, 2005, 2004 and 2003 was $78,847,  $25,730, and $72,029
respectively.

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

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

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

Shipping and  handling-  Shipping  and handling  costs are expensed as incurred.
Shipping  and  handling  expense  included  in  selling  expense  was  $196,469,
$296,637,  and $242,730 for the years ended  September 30, 2005,  2004 and 2003,
respectively.

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

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


                                       F-6
<PAGE>


                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - SUMMARY OF ACCOUNTING POLICIES(continued)

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

Reclassifications- Certain reclassifications of certain prior year amounts were
made to conform to the current year presentation. Such reclassifications had no
effect on prior years reported loss.

Estimates and  assumptions-  Preparing  financial  statements in conformity with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and  expenses  at the balance  sheet date and for the period then ended.  Actual
results could differ from these estimates.

Note 2 - SUPPLEMENTAL CASH FLOW STATEMENT DISCLOSURES
<TABLE>
<CAPTION>
                                                              2005              2004             2003
                                                              ----              ----             ----

<S>                                                            <C>              <C>               <C>
Cash paid during the year for:
         Interest                                             $48,976           $92,477          $92,477
Non cash transactions:
         Conversion of deferred compensation
         Into common stock                                    $50,000

Note 3- OTHER CURRENT ASSETS

Other current assets consist of the following:
                                                              2005              2004
                                                              ----              ----

Prepaid Expenses                                             $ 36,082        $  96,274
Consulting fees                                                     -           40,000
Advance to stockholder                                              -           50,000
                                                             ---------       ----------
Total current assets                                         $ 36,082        $ 186,274
                                                             ---------       ----------
</TABLE>

In 2004, the Company  advanced to one of the stockholders of the Company $50,000
which was payable on demand and non interest  bearing.  During fiscal 2005,  the
stockholder repaid the advance in full

Note 4 - BANK NOTES PAYABLE

On October  29,  2002,  the Company  entered  into a  financing  agreement  with
Rosenthal & Rosenthal,  Inc. The financing agreement provides the Company with a
maximum  credit  facility  not to exceed  $3,000,000.  On  September 1, 2004 the
credit  facility was amended by mutual consent and reduced the maximum amount of
credit  under  the  facility  to  $1,000,000.  On  March 2,  2005 the  financing
agreement  was amended  reducing the maximum  credit  facility to $500,000.  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% (9.25% as
of September 30, 2005).  Under terms of the  agreement,  the lender may call the
loan if the Company is in violation of any  restrictive  covenant.  At September
30,  2005,  the Company is in  violation  of its net worth and  working  capital
covenants. Rosenthal & Rosenthal has not waived the violations, and accordingly,
the entire amount of the obligation is callable.  The credit facility matured on
October  31,  2005  and has  been  extended  through  December  31,  2005  under
substantially  the same terms as the  original  agreement.  The  Company and the
lender have agreed to continue  the credit  facility on a month to month  basis.
The Company has requested an extension of the credit facility  through March 31,
2006.

Note 5 - INCOME TAXES

Income taxes (benefit) consist of the following:

                               2005             2004              2003
                               -----            ----              ----
Current                    $       -         $        -        $   5,592
Deferred                           -                  -           73,563
                           ----------        -----------       ----------
Total                      $       -         $        -        $  79,155
                           ----------        -----------       ----------

                                       F-7
<PAGE>

                                 APO HEALTH INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - INCOME TAXES (continued)

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


                                                                2005               2004              2003
                                                               ------              ----              ----
<S>                                                               <C>               <C>               <C>
Computed at the federal statutory
         Rate of 34%                                          $      -           $      -          $       -
State income tax (benefit)                                           -                  -                  -
Valuation allowance adjustment                                       -                  -             73,563
Other adjustments                                                    -                  -              5,592
                                                              ---------          ---------         ----------
Total                                                         $      -           $      -          $  79,155
                                                              =========          =========         ==========

The components of deferred taxes are as follows:
                                                                                   2005                2004
                                                                                -------              -------
Deferred tax assets
         Allowance for doubtful accounts                                         $162,150          $ 152,000
         Depreciation                                                              21,150             12,000
         Deferred compensation                                                     17,000             50,400
         Net operating loss carryover                                             624,000            404,025
         Valuation allowance                                                     (824,300)          (627,675)
                                                                                 ---------         ---------
Total deferred tax assets                                                        $      -          $       -
                                                                                 ---------         ---------
</TABLE>

The Company has a net operating  loss carryover of  approximately  $1,560,000 to
offset future taxable  income.  The carryover  losses expires  through 2025. The
Company has offset the deferred  tax asset by a valuation of $824,300,  since it
cannot be  determined  more likely than not whether the Company  will be able to
utilize such net operating loss  carryover.  During the year ended September 30,
2005, the valuation allowance increased by $196,625.

Note 6 - COMMON STOCK ISSUANCES

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

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

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

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

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

Stock Option Plan

On July 22, 2002, the Company adopted a Bonus  Compensation  Warrant  Agreement,
whereby,  the Company would issue Bonus Compensation  Warrants equivalent to 10%
of the price of any merger or  acquisition  brought to the  Company.  All of the
warrants  being  exercisable  into  shares of common  stock at 80% of the 20 day
average bid and ask price of the Company's common stock. The Company  authorized
up to a maximum  aggregate of 3,000,000 shares of common stock available for any
Bonus Compensation Warrants. To date none of these shares have been exercised.

On July 22, 2002, the Company issued a common stock purchase warrant for 260,000
shares of common stock  exercisable at $.10 per share and on September 27, 2002,
a common stock  purchase  warrant for 1,875,000  shares  exercisable at $.04 per
share,  both  expiring on August 31, 2007.  To date none of these  warrants have
been exercised.


                                       F-8
<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 - LEASES

The Company's offices are located at 3590 Oceanside Road,  Oceanside,  New York.
The premises  contain  approximately  9,800 square feet under a five-year  lease
(the "Lease") which expired on November 30, 2004 (the "Lease  Term").  The Lease
Term has been extended for an additional  five years through  November 30, 2009.
These  premises  are  occupied  under a Lease  between the  landlord,  who is an
unaffiliated  third party, and an affiliated  company PJS Trading,  Corp., a New
York  corporation  ("PJS") owned by Dr. Stahl formed for the express  purpose of
entering  into the Lease.  The Company  occupies  these  premises  under an oral
agreement with PJS and Dr. Stahl whereby the Company has agreed to discharge all
of the Lease  obligations with the landlord.  The annual lease payment under the
new lease starts at  approximately  $77,300 per year and increases to $80,000 in
the fifth year with  additional  increases  for real estate taxes over the Lease
Term.  Neither PJS nor Dr. Stahl derives any profit from the Lease nor will they
during the balance of the Lease Term.  Management  of the Company  believes  the
current facility is adequate for its current  operations.  Effective December 1,
2005, the Company has subleased for a one year period approximately 2,000 square
feet of the warehouse space at  approximately  $30,000 per year.  Rental expense
net of subleases  was  $46,112,  $50,206 and $59,429 for each of the three years
ended September 30, 2005.

Future minimum lease payments are as follows:
For the years ended September 30,
                  2006                                            70,571
                  2007                                            71,225
                  2008                                            75,825
                  2009                                            79,405
                  2010                                            13,337

Note 8 - 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, 2005, 2004, and 2003, were $0, $0, and $0, respectively.

Note 9 - COMMITMENTS AND CONTINGENCIES

Employment Agreement

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

Legal Proceedings

     On or about July 7, 2004,  APO Health,  Inc.  was served with  process in a
suit commenced by The Proctor & Gamble Company  ("P&G") in the US District Court
for the Eastern District of New York,  against it and a number of other parties.
P&G claimed that APO, as well as others were involved in the sale of Pantene and
Head and Shoulders  products which were not  manufactured  by P&G. APO purchased
several  shipments of these products abroad and unbeknownst to APO, some non P&G
products were included in these  shipments.  APO has cooperated with P&G as well
as the  Federal  regulatory  agencies  and  has  supplied  P&G  with  all of its
documentation  in order to assist P&G in its  efforts to remove  these  products
from the  marketplace and to allow it to trace back the source of these improper
products.  The lawsuit is seeking, among other relief, a request for a temporary
and permanent injunction from selling such products. Recently, the complaint was
amended  to include a number of  additional  parties,  including  Dr. Jan Stahl,
chief  executive  officer of the  Company.  The  co-defendants  in the suit have
asserted  cross-complaints  against the Company for an unspecified  amount to be
determined  at trial  based upon their  receipt and  subsequent  resale of these
products.

     On or about  December  3, 2004,  APO  Health,  Inc.  and Dr. Jan Stahl were
served  with  process  in a suit  commenced  by Alcoa,  Inc.  (Alcoa)  in the US
District Court for the Eastern District of New York,  against it and a number of
other  parties.  Alcoa  claimed that APO, as well as others were involved in the
sale of products which were not  manufactured  by Alcoa.  APO purchased  several
shipments  of these  products  abroad  and  unbeknownst  to APO,  some non Alcoa
products were included in

                                       F-9
<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Legal Proceedings (continued)

these shipments. APO is cooperating with Alcoa as well as the Federal regulatory
agencies and is supplying Alcoa with all of its documentation in order to assist
Alcoa in its efforts to remove these products from the  marketplace and to allow
it to trace back the source of these improper products.  The lawsuit is seeking,
among other  relief,  a request for a temporary and  permanent  injunction  from
selling such products. . Recently, the complaint was amended to include a number
of additional  parties,  including Dr. Jan Stahl, chief executive officer of the
Company.  The co-defendants in the suit have asserted  cross-complaints  against
the Company for an unspecified amount to be determined at trial based upon their
receipt and subsequent resale of these products.

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

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

Product Liability

Certain of the  Company's  products  and proposed  products  will be utilized in
medical  procedures  where the Company  could be subject to claims from injuries
resulting  from  use of  the  Company's  products.  Recent  developments  in the
insurance  industry  have reduced the  availability  and  increased  the cost of
liability  insurance  coverage.  At  present,  the Company is  self-insured  for
product liability claims.

Note 10 - 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,
2005,  the Company  had  approximately  $489,600  on  deposit,  in excess of the
$100,000 in each bank, which is insured under federal law.

The  concentration  of credit  risk due to  receivables  is  minimal  due to the
Company's  diverse  customer base  throughout the United  States.  For the years
ended September 30, 2005, 2004 and 2003 the following customers had in excess of
10% of the total  sales.  No single  vendor  accounts  for  greater  than 10% of
purchases.


                                 2005              2004             2003
                                 ----              ----             ----
Customer A                       35%               40%              38%
Customer B                       10%                                12%

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.

Note 11 - Computation of Earnings Per Share

Basic earnings per share is calculated using the average number of common shares
outstanding.  Diluted  earnings  per share is  computed  on the basis of average
number of common shares outstanding plus the effect of outstanding stock options
using the "treasury stock method".


                                      F-10
<PAGE>

                                APO HEALTH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11 - Computation of Earnings Per Share (continued)
<TABLE>
<CAPTION>

                                                                       Year Ended September 30,
                                                                       -------------------------
                                                                 2005               2004              2003
                                                                 ----               ----              ----

<S>                                                              <C>                 <C>               <C>
Net income (loss) available for common
  Shareholders, basic and diluted                             $ (663,837)       $(1,048,828)     $  (517,526)

Weighted average common shares
  Outstanding-basic                                           39,199,845         34,338,680        27,003,847

Net effect of dilutive stock options                              *                  *                 *

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

* antidilutive

                                      F-11
<PAGE>


                                APO HEALTH, INC.
                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
             FOR THE YEARS ENDED SEPTEMBER 30, 2004, 2003, AND 2002

                                                 Balance
Year Ended                                  Beginning of                                          Balance
September 30,          Account                 Period       Additions         Reduction        End of Period
                       -------              -------------   ---------         ---------        -------------

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

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

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

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

2005              Allowance for
                   Doubtful accounts        $380,000          $   25,397                         $   405,297

                  Allowance for
                   Deferred taxes           $628,000          $  196,300                         $   824,300
</TABLE>



                                      F-12