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, 2003
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.
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(Exact name of registrant as specified in its charter)
Nevada 86-0871787
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
3590 Oceanside Road, Oceanside, New York 11575
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(Address of principal executive offices)
(800) 365-2839
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(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 9, 2004, 32,106,045 shares of Common Stock of the issuer were
issued.
APO HEALTH, INC.
FORM 10-Q
QUARTER ENDED DECEMBER 31, 2003
TABLE OF CONTENTS
Page
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PART I - Financial Information
Item 1 Financial Statements.
Consolidated Balance Sheet as of
December 31, 2003 and September 30, 2002. 3
Consolidated Statement of Income for the three
months ended December 31, 2003 and 2002. 4
Consolidated Statement of Cash Flows for the
three months ended December 31, 2003 and 2002. 5
Notes to Consolidated Financial Statements. 6- 11
Item 2 Management's Discussion and Analysis
or Plan of Operations. 12-13
PART II - Other Information
Item 1 Legal Proceedings. 14-15
Item 2 Changes in Securities and Use of Proceeds. 15
Item 3 Default upon Senior Securities. 15
Item 4 Submission of Matters to a Vote of Security Holders. 15
Item 5 Other Information. 15
Item 6 Exhibits and Reports on Form 8-K. 15
Signatures 16
- 2 -
PART I - FINANCIAL INFORMATION
APO HEALTH, INC.
CONSOLIDATED BALANCE SHEET
December 31, September 30,
2003 2003
----------- -----------
(Unaudited)
ASSETS
Current Assets:
Cash $ 28,473 $ 405,153
Accounts Receivable, net of allowance
for doubtful accounts of $50,000 and $50,000 2,033,903 1,702,741
Inventory 1,790,934 1,396,205
Note receivable 3,796 4,566
Due from Officers 108,905 108,905
Other Current Assets 60,464 55,013
----------- -----------
Total Current Assets 4,026,475 3,672,583
Property and Equipment, net of accumulated
depreciation of $76,096 and $98,992 15,533 18,003
Deposits 7,500 7,500
----------- -----------
Total Assets $ 4,049,508 $ 3,698,086
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank Notes Payable $ 1,388,118 $ 1,008,123
Accounts Payable 529,745 924,029
Accrued Compensation 250,440 248,483
Customer Deposits 547,576 294,587
----------- -----------
Total Current Liabilities 2,715,879 2,475,222
----------- -----------
Stockholders' Equity:
Common stock, $.0002 par value,
125,000,000 shares authorized, 32,106,045
and 32,106,045 shares issued and outstanding 6,325 6,325
Paid-in Capital 1,920,768 1,920,768
Retained Earnings (Deficit) (593,464) (704,229)
----------- -----------
Total Stockholders' Equity 1,333,629 1,222,864
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,049,508 $ 3,698,086
=========== ===========
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APO HEALTH, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2003 AND 2002 (UNAUDITED)
2003 2002
------------ ------------
Revenue $ 7,389,987 $ 11,664,766
Cost of Revenue 6,746,816 11,105,136
------------ ------------
Gross Margin 637,171 559,630
------------ ------------
Operating Expenses
Selling Expense 163,845 156,099
General and Administrative Expenses 339,831 326,860
------------ ------------
503,676 482,959
------------
Income from Operations 133,495 76,671
Interest Expense (22,730) (27,126)
------------ ------------
Income before Provision for Income Taxes 110,765 49,545
Provision for Income Taxes -- 19,818
------------ ------------
Net Income $ 110,765 $ 29,727
============ ============
Basic and diluted
Earnings per common share $ .003 $ .001
============ ============
Weighted Average Common Shares
Outstanding 32,106,045 24,554,227
============ ============
- 4 -
APO HEALTH, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2003 AND 2002 (UNAUDITED)
2003 2002
----------- -----------
Cash Flow From Operating Activities:
Net Income $ 110,765 $ 29,727
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
Depreciation and Amortization 2,470 2,624
Deferred Taxes -- 19,818
Changes In:
Accounts Receivable (331,162) (1,028,167)
Inventory (394,729) 538,667
Other Current Assets (5,451) 7,263
Accounts Payable (394,284) 354,611
Accrued Expenses 1,957 (85,485)
Customer Deposits 252,989 (431,330)
----------- -----------
Cash Flows from Operating Activities (757,445) (592,272)
----------- -----------
Cash Flows from Investing Activities:
Reduction in Notes Payable 770 99,458
----------- -----------
Cash Flows from Financing Activities 770 99,458
----------- -----------
Cash Flows from Financing Activities:
Proceeds (Payment) on Bank Notes Payable, Net 379,995 430,776
----------- -----------
Cash Flows from Financing Activities 379,995 430,776
----------- -----------
Net Increase (Decrease) in Cash (376,880) (62,048)
----------- -----------
Cash Balances:
Beginning of Period 405,153 520,618
----------- -----------
End of Period $ 28,473 $ 458,570
=========== ===========
- 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, 2003 filed with the Securities and Exchange
Commission.
The results of operations for the three months ended December 31, 2003 are not
necessarily indicative of results expected for the entire fiscal year ended
September 30, 2004.
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.
The Company follows Statement of Financial Accounting Standards No. 144,
Impairment of Long-lived Assets by reviewing such assets for impairment whenever
changes in circumstances indicate that the carrying amount may not be
recoverable.
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APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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 2002
------------ ------------
Cash paid during the year for:
Interest $ 22,730 $ 27,126
Income taxes - -
Note 3 - 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. 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.
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APO HEALTH INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - INCOME TAXES
Income taxes (benefit) consist of the following:
2003 2002
-------- --------
Current $ 44,298 $ 19,818
Utilization of net operating loss (44,298) (19,818)
Deferred -- 19,818
-------- --------
Total $ -- $ 19,818
======== ========
A reconciliation of income taxes at the federal statutory income tax rate to
total income taxes is as follows:
2003 2002
-------- --------
Computed at federal statutory rate of 34% $ 37,653 $ 16,845
State income tax 6,645 2,973
Utilization of net operating loss (44,298) --
-------- --------
Total $ -- $ 19,818
-------- --------
The components of deferred taxes are as follows:
December 31, September 30,
2003 2003
-------- --------
Deferred tax assets
Allowance for doubtful accounts $ 20,000 $ 20,000
Depreciation 12,000 12,000
Net operating loss carryover, less
Valuation allowance of $176,900 and $221,200 -- --
Reversal of valuation allowance (32,000) (32,000)
-------- --------
Total deferred tax assets -- --
-------- --------
Non current deferred tax asset $ $
======== ========
The Company has a net operating loss carryover of approximately $265,000 to
offset future taxable income. The carryover expires 2018. The Company has offset
the deferred tax asset by a valuation allowance of $176,900, since it cannot be
determined more likely than not whether the Company will be able to utilize such
net operating loss carryover.
-8-
APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 - 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. 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 issued.
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.
Stock Options
In April, 2001, investors in a private placement received warrants to acquire
1,500,000 shares of Common stock at $1.00 per share. These warrants expire on
April 24, 2004. To date none of these warrants have been exercised.
In June, 2001, consultants received warrants to acquire 1,350,000 shares of
Common stock at prices ranging from $1.00 to $2.00 that expire on September 14,
2004. To date none of these warrants have been exercised.
In June, 2001. a consultant received warrants to acquire 1,000,000 shares of
Common stock at prices ranging from $1.00 to $2.00 that expire on June 5, 2006.
To date none of these warrants have been exercised.
Note 6 - LEASES
The Company leases 12,000 square feet in New York. The lease is on a
month-to-month basis with an affiliated company 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. On December 1, 2002 the Company entered into a sublease
agreement to lease approximately 2,000 square feet of its warehouse through
November 30, 2005.
Future minimum lease payments are as follows:
Year ended December 31,2004 $74,900
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APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - 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., 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.
On July1, 2002,the Court granted the intervention motion of the Kenro
plaintiffs, and, as a matter of law, denied Merchants' motion for summary
judgement and granted the Company's cross-motion for summary judgement, and
finding that the claims asserted against the Company in the Kenro lawsuit fell
within the terms of the Merchants' policies. As a result, the Court ordered that
Merchants has a duty to defend and indemnify the Company in the Kenro lawsuit.
Additionally, the Court found alternatively, that the disclaimer of coverage by
Merchants was untimely, so that Merchants would not be allowed to rely upon or
raise any coverage defenses. The Court also found that the Company is entitled
to be reimbursed for the legal fees that it incurred, and ordered that a hearing
be conducted to determine the amount that Merchant owed.
Merchants subsequently filed a motion for reargument of its unsuccessful summary
judgement motion, and papers in opposition have been submitted by the Company
and the Kenro plaintiffs to the Court. The Company and the Kenro plaintiffs have
argued that the Court should adhere to its original decision for a variety of
reasons. Merchants has also filed an appeal to the Appellate Division from the
Court's July 1,2002 Order, and in the event the Court adheres to its decision,
it is expected that Merchants will again notice an appeal, and move to have the
two appeals consolidated.
On January 28, 2004, the Company announced that it had reached an out of court
settlement in the unsolicited broadcast fax class action lawsuit by Kenro, Inc.
Details of the settlement will be approved by the court which must approve the
settlement before it becomes final. Mediation in this matter was ordered by the
court.
-10-
APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Litigation (continued)
The Company's attorneys agreed to settle the litigation for up to $4.5 million
which will be placed in a settlement fund created and completely covered by the
Company's insurer. Once approved by the court, notice of settlement will be
faxed to a list of fax numbers belonging to the class action plaintiffs. As a
result of the settlement, if approved, the Company will have no out of pocket
expenses related to the creation or management of the Settlement Fund.
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 8 - 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,
2003, the Company had $123,000 on deposit, in excess of the $100,000 in each
bank, which is insured under federal law.
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ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Revenue for the three months ended December 31, 2003 was $7,389,987 compared to
$11,664,776 for the three months ended December 31, 2002. This decrease of
$4,274,779 or 36.6% was a result of a large decrease in sales to wholesale
distributors. The Company reduced sales of items which were generating gross
margins of 1.0% to 1.5 % as it searched for new sources for these products which
would generate a higher gross margin.
Cost of revenue for the three months ended December 31, 2003 was $6,746,816
compared to $11,105,136 for the three months ended December 31, 2002. This was a
decrease in cost of revenue of $4,358,320 or 39.9%. As a result, the gross
margins increased to 8.6% from 4.8%, an improvement of approximately 80.0%. The
Company reduced its reliance on low gross profit margin items and concentrated
more on its retail dental supply sales and medical supply sales which have
higher gross profit margins. The Company expects medical sales to rise at the
end of the next quarter when it releases its new catalogue at the end of March,
2004 or the beginning of April, 2004.
Selling expenses for the three months ended December 31, 2003 were $163,845
compared to $156,099 for the three months ended December 31, 2002, an increase
of $7,746 or 5.0%. Categories of selling expenses, which showed increases, were
shipping ($14,189), commissions ($29,133), and telephone expense ($2,950).
Categories of selling expenses which showed decreases were advertising
($19,855), postage and mailing ($9,327) and travel and entertainment ($9,313).
The large increase in commissions were a result of sales generated by outside
sources. The advertising expense decrease was due to the elimination of faxing
to customers and that the new medical catalogue has not yet been released.
Postage and mailing decreased because the new catalogue was not yet available
for distribution. The Company also reduced travel and entertainment expense as
the sales personnel spent more effort on the phone rather than meeting with
customers.
General and administrative expenses for the three months ended December 31, 2003
were $339,831 compared to $326,860 for the three months ended December 31, 2002,
an increase of $12,971 or 4.0%. Total compensation including payroll taxes and
medical benefits increased by $8,916 which was the largest increase in general
and administrative expenses. Costs associated with the new filing requirements
of the Sarbanes-Oxley Act of 2002 increased professional and accounting expenses
by approximately $7,500. All other categories of general and administrative
expenses had minor increases or decreases.
Interest expense for the three months ended December 31, 2003 was $22,730
compared to $27,126 to the three month period ended December 31, 2002, a
decrease of $4,396 as the average daily balance outstanding on its line of
credit decreased from the prior years period.
-12-
Liquidity and Capital Resources
As of December 31, 2003, the Company had net working capital of $1,3910,596, an
increase of $113,235 from September 30, 2003, as a result of the net income
generated during the period. At December 31, 2003, the Company had a $3,000,000
credit facility of which approximately $1,620,000 was unused which gives the
Company the ability to finance additional revenue and inventory.
For fiscal 2004, the Company has reduced its budget for both selling and general
and administrative expenses by approximately $250,000 eliminating unnecessary
expenses and revising some of the operations. In addition, the Company expects
that consulting fees which were non-recurring items will be eliminated. The
above reductions will increase the Company's profitability based on 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.
On July1, 2002,the Court granted the intervention motion of the Kenro
plaintiffs, and, as a matter of law, denied Merchants' motion for summary
judgement and granted the Company's cross-motion for summary judgement, and
finding that the claims asserted against the Company in the Kenro lawsuit fell
within the terms of the Merchants' policies. As a result, the Court ordered that
Merchants has a duty to defend and indemnify the Company in the Kenro lawsuit.
Additionally, the Court found alternatively, that the disclaimer of coverage by
Merchants was untimely, so that Merchants would not be allowed to rely upon or
raise any coverage defenses. The Court also found that the Company is entitled
to be reimbursed for the legal fees that it incurred, and ordered that a hearing
be conducted to determine the amount that Merchant owed.
Merchants subsequently filed a motion for reargument of its unsuccessful summary
judgement motion, and papers in opposition have been submitted by the Company
and the Kenro plaintiffs to the Court. The Company and the Kenro plaintiffs have
argued that the Court should adhere to its original decision for a variety of
reasons. Merchants has also filed an appeal to the Appellate Division from the
Court's July 1,2002 Order, and in the event the Court adheres to its decision,
it is expected that Merchants will again notice an appeal, and move to have the
two appeals consolidated.
On January 28, 2004, the Company announced that it had reached an out of court
settlement in the unsolicited broadcast fax class action lawsuit by Kenro, Inc.
Details of the settlement will be approved by the court which must approve the
settlement before it becomes final. Mediation in this matter was ordered by the
court.
-14-
The Company's attorneys agreed to settle the litigation for up to $4.5 million
which will be placed in a settlement fund created and completely covered by the
Company's insurer. Once approved by the court, notice of settlement will be
faxed to a list of fax numbers belonging to the class action plaintiffs. As a
result of the settlement, if approved, the Company will have no out of pocket
expenses related to the creation or management of the Settlement Fund.
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 9, 2004 By: /s/ Dr. Jan Stahl
--------------------------------
Dr. Jan Stahl, Chairman
Chief Executive Officer
And Secretary
(Principal Executive 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 9, 2004 By: /s/ Dr. Jan Stahl
-----------------------------------
Dr. Jan Stahl, Director
Date: February 9, 2004 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 and Financial 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 Date"); 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
-16-
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 9, 2004 By: /s/ Dr. Jan Stahl
-----------------------------------
Dr. Jan Stahl
Chief Executive and Financial
Officer and Director
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