Back to GetFilings.com
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2002
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE
EXCHANGE ACT OF 1934
From the transition period from __________ to ___________
Commission file number 00030074
APO HEALTH, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Nevada 86-0871787
--------------- ----------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
3590 Oceanside Road, Oceanside, New York 11575
-------------------------------------------------
(Address of principal executive offices)
(800) 365-2839
-----------------------------
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days:
Yes __X__ No
As of February 4, 2003, 24,554,227 shares of Common Stock of the issuer were
issued.
APO HEALTH, INC.
FORM 10-Q
QUARTER ENDED DECEMBER 31, 2002
TABLE OF CONTENTS
Page
PART I - Financial Information
Item 1 Financial Statements.
Consolidated Balance Sheet as of
December 31, 2002 and September 30, 2002. 3
Consolidated Statement of Income for the three
months ended December 31, 2002 and 2001. 4
Consolidated Statement of Cash Flows for the
Three months ended December 31, 2002 and 2001. 5
Notes to Consolidated Financial Statements. 6 - 11
Item 2 Management's Discussion and Analysis
Or Plan of Operations. 12
PART II - Other Information
Item 1 Legal Proceedings. 13
Item 2 Changes in Securities and Use of Proceeds. 13
Item 3 Default upon Senior Securities. 13
Item 4 Submission of Matters to a Vote of Security Holders. 13
Item 5 Other Information. 13
Item 6 Exhibits and Reports on Form 8-K. 13
Signatures 14
- 2 -
PART I - FINANCIAL INFORMATION
APO HEALTH, INC.
CONSOLIDATED BALANCE SHEET
December 31, September 30,
2002 2002
----------------- ------------------
(Unaudited)
ASSETS
Current Assets:
Cash $ 458,570 $ 520,618
Accounts Receivable, net of allowance
For doubtful accounts of $30,000 and
$30,000 2,539,472 1,511,295
Inventory 1,703,942 2,242,609
Due from Officers 113,905 113,905
Notes receivable 159,042 258,500
Deferred Tax Assets 12,000 12,000
Other Current Assets 11,034 18,297
------------ ------------
Total Current Assets 4,997,965 4,677,224
------------ ------------
Property and Equipment, net of accumulated
Depreciation of $91,120 and $88,496 25,875 28,499
Deferred tax asset 41,745 61,563
Deposits 7,500 7,500
----------- ------------
Total Assets $ 5,073,085 $ 4,774,786
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank Notes Payable $ 1,780,776 $ 1,350,000
Accounts Payable 1,472,899 1,118,288
Accrued Expenses 115,233 200,718
Customer deposits 234,266 665,596
----------- -------------
Total Current Liabilities 3,603,174 3,334,602
----------- -------------
Stockholders' Equity:
Common stock, $.0002 par value,
125,000,000 shares authorized, 24,554,227
and 24,554,227 shares issued and outstanding 4,904 4,904
Paid-in Capital 1,621,983 1,621,983
Retained Earnings (Deficit) (156,976) (186,703)
------------ -------------
Total Stockholders' Equity 1,466,911 1,440,184
------------ -------------
Total Liabilities and Stockholders' Equity $ 5,073,085 $ 4,774,786
============ ============
- 3 -
APO HEALTH, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2002 AND 2001 (UNAUDITED)
2002 2001
---------------- ----------------
Revenue $11,664,766 $ 6,490,290
Cost of Revenue 11,105,136 5,815,637
---------------- ----------------
Gross Margin 559,630 674,653
---------------- ----------------
Operating Expenses
Selling Expense 156,099 207,312
General and Administrative Expenses 326,860 377,458
---------------- ----------------
482,959 584,770
---------------- ----------------
Income from Operations 76,671 89,883
Interest Expense 27,126 30,255
---------------- ----------------
Income before Provision for Income Taxes 49,545 59,628
Provision for Income Taxes 19,818 10,962
---------------- ----------------
Income from continuing operations 29,727 48,666
Discontinued operations net of taxes - . 12,056
---------------- ----------------
Net Income $ 29,727 $ 60,722
================ ================
Earnings per common share
From continuing operations $ .00 $ .00
Discontinued operations .00 .00
----------------- ----------------
Per Common Share $ .00 $ .00
================ ================
Weighted Average Common Shares
Outstanding 24,554,227 23,394,874
================ ================
- 4 -
APO HEALTH, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2002 AND 2001 (UNAUDITED)
2002 2001
---------------- ----------------
Cash Flow From Operating Activities:
Net Income $ 29,727 $ 60,722
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
Depreciation and Amortization 2,624 2,972
Deferred Taxes 19,818 12,637
Changes In:
Accounts Receivable (1,028,167) 64,196
Inventory 538,667 (566,319)
Other Current Assets 7,263 68,377
Deposits - (25,000)
Accounts Payable 354,611 773,638
Accrued Expenses (85,485) 80,246
Customer deposits (431,330) -
---------------- ----------------
Cash Flows from Operating Activities (592,272) 471,469
---------------- ----------------
Cash Flows from Financing Activities:
Reduction in notes payable 99,458 -
---------------- ----------------
Cash Flows from Financing Activities 99,458 -
---------------- ----------------
Cash Flows from Financing Activities:
Advances from Officers, Net - (59,569)
Proceeds (Payment) on Bank Notes Payable, Net 430,776 (12,508)
---------------- ----------------
Cash Flows from Financing Activities 430,766 (72,077)
---------------- ----------------
Net Increase (Decrease) in Cash (62,048) 399,392
Cash Balances:
Beginning of Period 520,618 179,167
------------- --------------
End of Period $ 458,570 $ 578,559
============= ==============
- 5 -
APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following financial information is submitted in response to the requirements
of Form 10-Q and does not purport to be financial statements prepared in
accordance with generally accepted accounting principles. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted, although the Company believes the disclosures that are made are
adequate to make the information presented not misleading. Further, in the
opinion of the management, the interim financial statements reflect fairly the
financial position and results of operations for the periods indicated.
It is suggested that these interim consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10K containing the Company's audited financial statements as of
and for the year ended September 30, 2002 filed with the Securities and Exchange
Commission.
The results of Operations for the three months ended December 31, 2002 are not
necessarily indicative of results expected for the entire fiscal year ended
September 30,2003.
Note 1 ACCOUNTING POLICIES
Nature of business and basis of consolidation. APO Health, Inc. ("APO") was
incorporated under the laws of the state of New York in August 1978. The Company
and its wholly-owned subsidiary, Universal Medical Distributors, Inc.
("Universal") distribute disposable medical products principally to dental,
medical and veterinary professionals and wholesalers in the United States,
principally on the East Coast. Effective June 13, 2001,
InternetFinancialCorp.com, Inc., ("IFAN"), a Nevada corporation, which is an
inactive public company acquired APO, (collectively, the "Company"), pursuant to
a tax-free reorganization agreement. The acquisition was accounted for by the
purchase method under business combinations in a reverse acquisition
transaction. Concurrently, IFAN changed its name to APO Health, Inc., a Nevada
corporation.
Cash and cash equivalents. For purposes of the statements of cash flows, cash
equivalents include all highly liquid investments with original maturities of
three month or less.
Revenue recognition occurs when products are shipped.
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.
-6-
APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company follows Statement of Financial Accounting Standards No. 121,
Impairment of Long-lived Assets, by reviewing such assets for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
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.
Estimates and assumptions. Preparing financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and expenses at the balance sheet date and for the period then ended. Actual
results could differ from these estimates.
Note 2 - SUPPLEMENTAL CASH FLOW STATEMENT DISCLOSURES
2002 2001
------------ ------------
Cash paid during the year for:
Interest $ 27,126 $ 30,255
Income taxes - -
Non-cash transaction:
Common Stock Issued for Consulting
And Professional Fees 139,083
Note 3 - BANK NOTES PAYABLE
On April 2, 2002, the Company renewed its credit facility with HSBC Bank USA
that provides for total borrowings that may not exceed $2,000,000. Bankers
acceptances and letters of credit, which relate to specific importation
transaction, may not exceed $500,000 each and own-note borrowing, which does not
relate to specific transactions, may not exceed $1,500,000. The credit facility
is collateralized by substantially all the Company's assets and is personally
guaranteed by the two majority Company stockholders. Interest of prime + 1% on
the own-note borrowings
-7-
APO HEALTH INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 Bank Notes Payable (continued)
is payable monthly and the bankers acceptance fees of 200 basis points above the
discount rate are paid at the inception of the bankers acceptance. Borrowings on
the credit facility are payable on demand, or upon maturity, which is up to 180
days after the initiation of a bankers acceptance or March 31, 2003, for
own-note borrowings, whichever is earlier.
The credit facility was extended through March 31,2003 with substantially the
same terms.
On October 29,2002,the Company entered into a financing agreement with Rosenthal
& Rosenthal, Inc. The financing agreement provides the Company with a maximum
credit facility not to exceed $3,000,000.The credit facility is collateralized
by substantially all the Company's assets and $500,000 of the facility is
personally guaranteed by Dr. Jan Stahl,Chairman and CEO of the Company. Interest
is payable monthly on the average daily loan balance at the announced prime rate
of JP Morgan Chase bank plus 2.5%. This agreement is for a period of three years
through October 31,2005 and may be extended on a year to year basis thereafter
unless terminated as provided in the agreement.
Bank Notes Payable of the following:
December 30, September 30,
2002 2002
---------- -----------
Own Note Borrowing $1,780,776 $1,350,000
========== ==========
Note 4 - INCOME TAXES
- -------------------------
Income taxes (benefit) consist of the following:
2002 2001
------------ -----------
Current $ - $ -
Deferred 19,818 12,637
------------ -----------
Total $ 19,818 $ 12,637
============ ===========
A reconciliation of income taxes at the federal statutory income tax rate to
total income taxes is as follows:
2002 2001
----------------- ---------------
Computed at federal statutory rate of 34% $ 16,845 $ 24,941
State income tax 2,973 3,668
Valuation allowance adjustment - (7,363)
Other adjustments - . (8,609)
----------------- --------------
Total $ 19,818 $ 12,637
-8-
APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 Income Taxes (continued)
The components of deferred taxes are as follows:
December 30, September 30,
2002 2002
-------------- --------------
Deferred tax assets
Allowance for doubtful accounts $ 12,000 $ 12,000
Depreciation 11,693 11,693
Net operating loss carryover, 27,300 27,300
Reversal of valuation allowance 2,482 22,300
-------------- -------------
Total deferred tax assets 53,745 73,563
Less Current Portion 12,000 12,000
-------------- -------------
Non current deferred tax asset $ 41,745 $ 61,563
----------- ------------
The Company has a net operating loss carryover of approximately $ 75,000 to
offset future taxable income. The carryover expires 2017.
Note 5 -DISCONTINUED OPERATIONS
In February 2002, the Company sold the veterinary division of Universal Medical
Distributors, Inc. The financial statements for 2001 have been restated to
reflect the discontinued operations of this division. In connection with the
sale of the veterinary division, the Company received a note in the amount of
$250,000 which was due on January 31,2003. As of February 4, 2003, the balance
was $50,000
In January 2002, the Company acquired Envirotech Air Quality Services, Inc.
("Envirotech"). The Company sold "Envirotech" in August 2002 which included a
note a in the amount of $8,500 receivable over a period of 19 months with
interest at the rate of 18% per annum.
Note 6 - COMMON STOCK
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, with 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.
-9-
APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - LEASES
The Company leases 11,800 square feet in New York and a small sales office in
Florida. Both leases are month-to-month with affiliated companies owned by the
Company's officers and shareholders. The affiliate's underlying New York lease
expires in 2004 . Lease payments made by the Company approximate the payments
due by the affiliated companies.
Future minimum lease payments are as follows:
Year ended December 31, 2003 $72,450
2004 $74,900
Note 8 - COMMITMENTS AND CONTINGENCIES
Litigation
There is an action pending in the Circuit/Superior Court of Marion County,
Indiana entitled Kenro, Inc., on behalf of itself and all others similarly
situated against APO Health, Inc. The lawsuit involves unsolicited broadcast
faxes sent in the state and has been certified as a class action suit. The
Company has petitioned the court to certify its class action certification order
for interlocutory appeal. If the Company can defeat the class certification,
then the plaintiff is limited to a single violation with a maximum potential
recovery of $1,500. If the class certification issue is lost then the Company's
exposure can range in the millions of dollars. The Company has filed a suit
seeking indemnification by or contribution from the vendors who sent the faxes
on behalf of the Company. It is the Company's belief and contention that
damages, if any, which may be awarded to the plaintiff are covered by insurance
up to policy limits.
However, on October 24, 2001, the Company was named as a defendant in Merchant's
& Business Men's Mutual Insurance Company vs. APO Health, Inc. Merchant's &
Business Men's Mutual Insurance Company issued a Commercial Blanket Excess
Liability insurance policy to the Company for one year commencing February 27,
2000 up through February 27, 2001. Merchant's & Business Men's Mutual Insurance
Company alleges in its complaint that policy coverage with the Company does not
extend to the allegations set forth in the aforementioned Kenro suit. The
Company, however, disagrees and contends that the policy issued by Merchant's &
Business Men's Mutual Insurance Company obligates them to cover any damages that
the Company may incur, as a result of an unfavorable verdict in the Kenro suit.
On July1, 2002,the Court granted the intervention motion of the Kenro
plaintiffs, and, as a matter of law, denied Merchants' motion for summary
judgement and granted the Company's cross-motion for summary judgement, and
finding that the claims asserted against the Company in the Kenro lawsuit fell
within the terms of the Merchants' policies. As a result, the Court ordered that
Merchants has a duty to defend and indemnify the Company in the Kenro lawsuit.
Additionally, the Court found alternatively, that the disclaimer of coverage by
Merchants was untimely, so that Merchants would not be allowed to rely upon or
raise any coverage defenses. The Court also found that the Company is entitled
to be reimbursed for the legal fees that it incurred, and ordered that a hearing
be conducted to determine the amount that Merchant owed.
-10-
APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Litigation(continued)
Merchants subsequently filed a motion for reargument of its unsuccessful summary
judgement motion, and papers in opposition have been submitted by the Company
and the Kenro plaintiffs to the Court. The Company and the Kenro plaintiffs have
argued that the Court should adhere to its original decision for a variety of
reasons. Merchants has also filed an appeal to the Appellate Division from the
Court's July 1,2002 Order, and in the event the Court adheres to its decision,
it is expected that Merchants will again notice an appeal, and move to have the
two appeals consolidated.
Employment Agreement
Effective October 1, 2001, the Company has entered into a three-year employment
agreement with its chief executive officer that provides for a minimum annual
salary of $250,000 with incentives based on the Company's attainment of
specified levels of sales and earnings as defined in the agreement. The
employment agreement expires September 30, 2004 and shall be automatically
renewed for successive periods of one year unless either party gives written
notice to terminate the agreement.
Note 9 - CONCENTRATION OF CREDIT RISK
The Company maintains cash balances at various financial institutions .At times
such balances exceed the insured limits of the financial institution. The
Company has not experienced any losses in such accounts and does not believe it
is exposed to any significant credit risk on cash balances. As of December 30,
2002, the Company had $350,000 on deposit, in excess of the $100,000 in each
bank, which is insured under federal law.
-11-
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Revenue for the three months ended December 31, 2002 was $11,664,766, an
increase of $5,174,476 or 79.7% over the three months ended December 31,2001.
The increase in revenue was due to an unusually large increase in the
distribution of products to wholesale distributors. The Company does not know if
they will be able to sustain this growth in future periods. Cost of sales for
the three months ended December 31, 2002 was $11,105,136, an increase of
$5,289,499 or 90.9% over the three months ended December 31, 2001. As a result
the gross margin for the quarter ended December 31, 2002 was $559,630 or 4.80%
compared to $674,653 or 10.39% for the quarter ended December 31, 2001. The
decrease in the gross profit margin were a result of the increased revenue being
wholesale products which have low profit margins and reduced revenue from the
retail dental sales. Medical supply sales which have a higher gross profit
margin than the wholesale sales have increased but have not yet made up for the
decrease in the dental sales. The Company expects that the increases in sales of
medical supplies will make up for the loss in dental sales and increase the
Company's overall gross profit margin.
Selling expenses for the three months ended December 31, 2002 were $156,099, a
decrease of $51,213 or 24.7% compared to the three months ended December 31,
2001. The Company has reduced shipping costs by $20,806; commissions by $24,413;
and advertising costs by $21,195.
Advertising costs in the next three to six months will increase as the Company
brings out several new catalogues. Travel and entertainment expenses increased
by $26,089, which is related directly to increased contact with medical and
wholesale purchasers.
General and administrative expenses for the three months ended December 31, 2002
decreased by $50,598 or 13.4% from the three months ended December 31,2001. The
largest decrease in general and administrative expenses was a reduction of
$45,599 in consulting expense for corporate planning, financing and
acquisitions. Total compensation including payroll taxes decreased by $52,537.
Increases included professional and financing fees, which increased by $21,484,
primarily for the Company's new financing agreement. Insurance increased by
$5,052 primarily from the increases in medical expenses. Other general and
administrative expenses decreased by approximately $22,000 as the Company
reduced costs for all nonessential services and supplies.
Interest expense for the three months ended December 31,2002 was $27,126, a
decrease of $3,129 form the three month period ended December 31,2001. This was
accomplished by entering into a new financing agreement where all 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 has been reduced.
The new financing agreement allows the Company greater flexibility in its
ability to finance increased sales and additional inventory.
-12-
Financial Condition
As of December 31,2002, The Company had net working capital of $1,394,791, an
increase of $52,169 from September 30,2002.. On October 29,2002, the Company
entered into a new financing agreement which increased its credit facility by
$1,000,000 to $3,000,000 giving the Company greater flexibility to finance
larger receivables and inventory allowing for increased sales.
For fiscal 2003, the Company has reduced its budget for both selling and general
and administrative expenses by approximately $255,000 eliminating unnecessary
expenses and revising some of the operations. In addition the Company expects
that consulting and other professional fees will be reduced by approximately
$150,000 which it estimated were non-recurring items. The above reductions would
provide the Company with income from operations based on the current sales
volume.
Based upon the above factors, the Company believes that it has sufficient funds
for operations for the next fiscal year.
-13-
PART II - OTHER INFORMATION
APO HEALTH, INC.
ITEM 1 - LEGAL PROCEEDINGS
There is an action pending in the Circuit/Superior Court of Marion County,
Indiana entitled "Kenro, Inc., on behalf of itself and all others similarly
situated against APO Health, Inc., Cause No. 490120101CP000016." The lawsuit
involves unsolicited broadcast faxes sent in the state and has been certified as
a class action suit. The Company has petitioned the court to certify its class
action for interlocutory appeal. The Company has filed a suit seeking
indemnification by or contribution from the vendors who sent the faxes on behalf
of the Company. It is the Company's belief and contention that damages, if any,
which may be awarded to the plaintiff are covered by insurance up to policy
limits.
However, on October 24, 2001, the Company was named as a defendant in Merchant's
& Business Men's Mutual Insurance Company vs. APO Health, Inc., Case No.
01-605-091, Supreme Court of the State of New York, County of New York.
Merchant's & Business Men's Mutual Insurance Company issued a Commercial Blanket
Excess Liability insurance policy to the Company for one year commencing
February 27, 2000 up and through February 27, 2001. Merchant's & Business Men's
Mutual Insurance Company alleges in its complaint that policy coverage with the
Company does not extend to the allegations set forth in the aforementioned Kenro
suit. The Company, however, disagrees and contends that the policy issued by
Merchant's & Business Men's Mutual Insurance Company obligates them to cover any
monetary damages that the Company may incur, as a result of an unfavorable
verdict in the Kenro suit. There is an action pending in the Circuit/Superior
Court of Marion County, Indiana entitled Kenro, Inc., on behalf of itself and
all others similarly situated against APO Health, Inc. The lawsuit involves
unsolicited broadcast faxes sent in the state and has been certified as a class
action suit. The Company has petitioned the court to certify its class action
certification order for interlocutory appeal. If the Company can defeat the
class certification, then the plaintiff is limited to a single violation with a
maximum potential recovery of $1,500. If the class certification issue is lost
then the Company's exposure can range in the millions of dollars. The Company
has filed a suit seeking indemnification by or contribution from the vendors who
sent the faxes on behalf of the Company. It is the Company's belief and
contention that damages, if any, which may be awarded to the plaintiff are
covered by insurance up to policy limits.
However, on October 24, 2001, the Company was named as a defendant in Merchant's
& Business Men's Mutual Insurance Company vs. APO Health, Inc. Merchant's &
Business Men's Mutual Insurance Company issued a Commercial Blanket Excess
Liability insurance policy to the Company for one year commencing February 27,
2000 up through February 27, 2001. Merchant's & Business Men's Mutual Insurance
Company alleges in its complaint that policy coverage with the Company does not
extend to the allegations set forth in the aforementioned Kenro suit. The
Company, however, disagrees and contends that the policy issued by Merchant's &
Business Men's Mutual Insurance Company obligates them to cover any damages that
the Company may incur, as a result of an unfavorable verdict in the Kenro suit.
-14-
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
None.
-15-
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: February 18, 2003 By: /s/ Dr. Jan Stahl
------------------
Dr. Jan Stahl, Chairman
Chief Executive Officer
And Secretary
(Principal Executive Officer)
Date: February 18, 2003 By: /s/ Peter Steil
----------------
Peter Steil, President
and Treasurer
(Principal Financial and
Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Date: February 18, 2003 By: /s/ Dr. Jan Stahl
------------------
Dr. Jan Stahl, Director
Date: February 18, 2003 By: /s/ Peter Steil
----------------
Peter Steil, Director
Date: February 18, 2003 By: /s/ Kenneth Leventhal
----------------------
Kenneth Leventhal, Director
-16-
CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Dr. Jan Stahl, Chief Executive Officer of APO Health, Inc., certify that:
1. I have reviewed this quarterly report on Form 10 Q of APO Health, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
(a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures of a date within 45 days of the filing date of this quarterly
report (the "Evaluation ate"); and
(c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
-17-
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated February 19, 2003 By: /s/ Dr. Jan Stahl
----------------------------------
Dr. Jan Stahl
Chief Executive Officer and Director
-18-
CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Dr. Peter Steil, Chief Financial Officer of APO Health, Inc., certify that:
1. I have reviewed this annual report on Form 10 Q of APO Health, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
1. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures of a date within 45 days of the filing date of this
quarterly report (the "Evaluation ate"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
-19-
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated February 19, 2003 By: /s/ Peter Steil
--------------------------------
Peter Steil
Chief Financial Officer and Director
-20-