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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB/A

Amendment No. 1



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(Mark One)

|x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------



For the quarterly period ended June 30, 2004



| ̈ | Transition report under Section 13 or 15(d) of the Exchange Act
|- | ---------------------------------------------------------------



Commission file number: 33-55254-36



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E Med Future, Inc.

(Exact name of small business issuer as specified in its charter)



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|                         |  |                                     
|------------------------ |  | ------------------------------------
|Nevada                   |  | 87-0485314                          
|(State of incorporation) |  | (I.R.S. Employer Identification No.)



794 Morrison Road,
Suite 911, Columbus, Ohio 43230

(Address of principal executive offices)



|                            |  |                   
|--------------------------- |  | ------------------
|877-855-1319                |  | www.NeedleZap.com 
|(Issuers telephone number) |  | (Issuers website)



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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 ̈



State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date:
34,013,415 shares of common stock, $0.001 par value per share, as of June 28, 2005



Transitional Small Business Disclosure Format (check one):    Yes ̈No  x



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EXPLANATION OF AMENDMENT



In early 2005, we concluded that certain errors were made in the Companys financial statements for the quarters ended June 30 and
September 30, 2004. These errors were uncovered by management as part of our internal review process. After discussions with our auditor, we determined that it was appropriate to restate our financials and file this amendment to our quarterly report
to correct these errors, as described below. In conjunction with the decision to restate our financials, we reevaluated our disclosure controls and procedures relating to the gathering and processing of accurate financial information, particularly
as it relates to revenue recognition, and concluded that these controls contained certain weaknesses. We have taken steps to identify, rectify and prevent the recurrence of the circumstances that resulted in the determination to restate our prior
financial statements. We believe these enhancements to our system of internal controls and our disclosure controls and procedures will be adequate to provide reasonable assurance that our control objectives will be met.



During the second quarter of 2004 we recognized revenues of $379,720 from a purchase order
placed by our former distributor TransGlobal Medical Sales & Services, LLC. TransGlobal never paid for the order and we have reversed the sale, decreasing our net sales and income for the quarter and six months ended June 30, 2004 by $379,720,
and accounts receivable as of June 30, 2004 by the same amount. Costs of goods sold of $180,194 corresponding to the TransGlobal order were also recorded during the quarter and have been reversed and added back into inventory. We have terminated
TransGlobals distribution and marketing agreement and are currently engaged in a lawsuit with TransGlobal. For additional information relating to the TransGlobal suit, please see the Legal Proceedings section of our December 31,
2004 Form 10-KSB.



During the second quarter of 2004 one of our lenders made
payments of $375,000 on our behalf directly to our primary vendor, PR Market Research Company, which is owned by our director of research. This payment was recorded as an increase in inventory with a corresponding increase in our convertible
promissory note payable to the lender. This payment was not authorized by our board and we subsequently amended our loan agreement with the lender to reduce the loan amount. Our June 30, 2004 balance sheet has been restated to reduce inventory by
$375,000 and the promissory note by $375,000. For more information relating to the loan amendment, please see the Financial Condition and Liquidity section of our December 31, 2004 Form 10-KSB.



In connection with the filing of this amendment and pursuant to Rules 12b-15 and 13a-14 of
the Securities Exchange Act, we are including with this amendment certain currently dated certifications. Except for the changes summarized above, no other amendments are being made to our quarterly report. This amendment does not reflect events
occurring after August 13, 2004, when we originally filed our report, or modify or update the disclosure contained in the report in any way other than as required to make the corrections discussed above and reflected below.



1



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PART I  FINANCIAL INFORMATION



Item 1. Financial Statements



Our June 30, 2004 unaudited consolidated financial statements follow this quarterly report beginning on page F-1.



Item 2. Managements Discussion and Analysis



Results of Operations



Second Quarter of 2004 Compared to 2003



Net Sales



We had net sales of $60,154 in the quarter ended June 30, 2004, compared with $196,987 for the same period in 2003, a decrease of $136,833 or 69.5%. The decrease is primarily attributable to expected repeat sales not
being realized in 2004 because our distributors who placed initial stocking orders in 2003 required more time to gain approvals and develop sales in their markets during 2004 than anticipated. Our global distributors continue to work to obtain all
necessary approvals to sell our products in their markets.



Costs and
Expenses



Operating costs and expenses increased $62,180, or 42.5%, to
$208,498 in the second quarter of 2004 from $146,318 in 2003 due to an increase in the cost of goods sold primarily attributable to a voluntary recall and replacement of NeedleZap® units sold prior to FDA approval and the costs of maintaining FDA compliance for our products. As a percentage of
sales, cost of goods sold increased to 207.8% in 2004 from 29.7% in 2003 as higher costs were spread over decreased sales.



Other expenses increased to $19,742 in 2004 from none in 2003 due to an increase in interest expense resulting from higher balances outstanding on our interest bearing
debt in 2004.



Net Income



In the second quarter of 2004, our net income decreased $218,755 to a loss of $168,086 from
income of $50,669 in 2003 as a result of higher expenses combined with reduced sales.



First Six Months of 2004 Compared to 2003



Net Sales



We had net sales of $189,180 in the six months ended June 30, 2004,
compared with $247,529 for the same period in 2003, a decrease of $583,349 or 23.6%. This decrease is primarily attributable to expected repeat sales not being realized in 2004 because our distributors required more time to gain approvals and
develop their markets during 2004 than was anticipated.



Costs and Expenses



Operating costs and expenses decreased $343,212, or 42.6% in the first
six months of 2004 from $805,870 in 2003. The first six months of 2003 included $600,000 of stock based compensation expense that was not present in 2004. The reduction in stock based compensation expense was



2



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partially offset by increased costs of goods sold primarily attributable to the voluntary product recall and increased selling, general and administrative
expense in 2004 due to higher distributor training and promotional costs, and additional expenses in 2004 associated with maintaining FDA compliance for our products. As a percentage of net sales, cost of goods sold increases to 106.1% in 2004 from
27.4% in 2003 as higher costs were spread over decreased sales.



Other expenses
increased to $21,480 in 2004 from none in 2003, due to an increase in interest expense resulting from higher balances outstanding on our interest bearing debt in 2004.



Net Loss



In the first half of 2004, our net loss decreased to $294,959 from a net loss of $558,341 in 2003 as a result of a decrease in stock based compensation expense in 2004
only being partially offset by increased operating costs and expenses and decreased sales.



Item 6. Exhibits and Reports on Form 8-K



|(a) | Exhibits
|--- | --------



|     |  |                                                                                                 
|---- |  | ------------------------------------------------------------------------------------------------
|     | 
|31.1 |  | CEOs Rule 13a-14(a)/15d-14(a) Certification Pursuant to § 302 of the Sarbanes-Oxley Act of 2002
|     | 
|31.2 |  | CFOs Rule 13a-14(a)/15d-14(a) Certification Pursuant to § 302 of the Sarbanes-Oxley Act of 2002
|     | 
|32.1 |  | Rule 13a-14(b)/15d-14(b) Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002      



3



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SIGNATURES



In accordance with the requirements of the Exchange Act, E Med Future, Inc. caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



|                    |  |                                            
|------------------- |  | -------------------------------------------
|                    |  | E MED FUTURE, INC.                         
|                    | 
|Date: June 30, 2005 |  | /s/ Donald Sullivan                        
|                    |  | By Donald Sullivan, Chief Financial Officer



4



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E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED BALANCE SHEET (UNAUDITED)

June 30, 2004



|                                                                                                                |  |   |            |  
|--------------------------------------------------------------------------------------------------------------- |  | - | ---------- | -
|ASSETS                                                                                                          |  |   |            |  
|CURRENT ASSETS                                                                                                  |  |   |            |  
|Cash                                                                                                            |  | $ | 4,654      |  
|Accounts receivable, net of allowance for doubtful accounts of $84,303                                          |  |   | 165,886    |  
|Inventory                                                                                                       |  |   | 313,370    |  
|Prepaid expenses                                                                                                |  |   | 4,075      |  
|                                                                                                                |  |   |            |  
|Total Current Assets                                                                                            |  |   | 487,985    |  
|                                                                                                                | 
|EQUIPMENT, net of depreciation                                                                                  |  |   | 132,454    |  
|PATENTS AND LICENSES                                                                                            |  |   |            |  
|Patents, net of amortization $49,336                                                                            |  |   | 335,052    |  
|                                                                                                                |  |   |            |  
|                                                                                                                |  | $ | 955,491    |  
|                                                                                                                |  |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                            | 
|CURRENT LIABILITIES                                                                                             | 
|Notes payable to bank                                                                                           |  | $ | 141,098    |  
|Current portion of long-term debt                                                                               |  |   | 1,766      |  
|Accounts payable                                                                                                |  |   | 243,669    |  
|Accounts payable to related party                                                                               |  |   | 9,529      |  
|Accrued expenses                                                                                                |  |   | 132,662    |  
|                                                                                                                |  |   |            |  
|Total Current Liabilities                                                                                       |  |   | 528,724    |  
|                                                                                                                | 
|LONG-TERM DEBT                                                                                                  |  |   |            |  
|Notes payable to finance company                                                                                |  |   | 3,349      |  
|Convertible promissory note                                                                                     |  |   | 175,000    |  
|                                                                                                                | 
|STOCKHOLDERS EQUITY                                                                                            |  |   |            |  
|Common stock $0.001 par value, 50,000,000 shares authorized, 26,883,415 issued and outstanding at June 30, 2004 |  |   | 26,883     |  
|Paid-in-capital                                                                                                 |  |   | 1,765,367  |  
|Deficit accumulated during development stage                                                                    |  |   | (1,543,832 | )
|                                                                                                                |  |   |            |  
|                                                                                                                |  |   | 248,418    |  
|                                                                                                                |  |   |            |  
|                                                                                                                |  | $ | 955,491    |  
|                                                                                                                |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-1



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E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)



|                                              |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|--------------------------------------------- | --------------------------- | ---- | ---------- | ------------------------- | ---- | - | --------- | ---- |  | - | -------------------------------------------------------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                              |                             |      |            |                           |      |   |           |      |  |   | For the PeriodMarch 14, 1990(Inception) to June 30, 2004 |  
|                                              | Three Months Ended June 30, |      |            | Six Months Ended June 30, |      |  
|                                              |                             | 2004 |            |                           | 2003 |   |           | 2004 |  |   | 2003                                                     |   | 
|NET SALES                                     |                             | $    | 60,154     |                           |      | $ | 196,987   |      |  | $ | 189,180                                                  |   |  | $ | 247,529    |   |  | $ | 870,665    |  
|                                              |                             |      |            |                           |     
|COSTS AND EXPENSES-                           |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|Cost of goods sold                            |                             |      | 124,991    |                           |      |   | 58,558    |      |  |   | 200,720                                                  |   |  |   | 67,869     |   |  |   | 566,577    |  
|Selling, general and Administrative           |                             |      | 75,837     |                           |      |   | 80,475    |      |  |   | 246,601                                                  |   |  |   | 123,647    |   |  |   | 1,044,849  |  
|Research and development                      |                             |      |           |                           |      |   |          |      |  |   |                                                         |   |  |   |           |   |  |   | 8,883      |  
|Stock based compensation                      |                             |      |           |                           |      |   |          |      |  |   |                                                         |   |  |   | 600,000    |   |  |   | 605,000    |  
|Depreciation and amortization                 |                             |      | 7,670      |                           |      |   | 7,285     |      |  |   | 15,338                                                   |   |  |   | 14,354     |   |  |   | 90,223     |  
|                                              |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|Total Costs and Expenses                      |                             |      | 208,498    |                           |      |   | 146,318   |      |  |   | 462,659                                                  |   |  |   | 805,870    |   |  |   | 2,315,532  |  
|                                              |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|NET OPERATING INCOME (LOSS)                   |                             |      | (148,344   | )                         |      |   | (50,669   | )    |  |   | (273,479                                                 | ) |  |   | (558,341   | ) |  |   | (1,444,867 | )
|                                              |                             |      |            |                           |     
|OTHER INCOME (EXPENSE)                        |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|Interest and other income                     |                             |      |           |                           |      |   |          |      |  |   |                                                         |   |  |   |           |   |  |   | 23         |  
|Interest expense                              |                             |      | (19,742    | )                         |      |   |          |      |  |   | (21,480                                                  | ) |  |   |           |   |  |   | (29,793    | )
|                                              |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|Total Other Expenses                          |                             |      | (19,742    | )                         |      |   |          |      |  |   | (21,480                                                  | ) |  |   |           |   |  |   | (29,770    | )
|                                              |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|NET INCOME (LOSS)                             |                             | $    | 168,086    |                           |      | $ | 50,669    |      |  | $ | (294,959                                                 | ) |  | $ | (558,341   | ) |  | $ | (1,474,637 | )
|                                              |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|NET LOSS PER COMMON SHARE (Basic and diluted) |                             |      | (.01       | )                         |      |   | (.04      | )    |  |   | (0.01                                                    | ) |  |   | (.03       | ) |  |   | (.45       | )
|                                              |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING    |                             |      | 26,134,000 |                           |      |   | 1,208,333 |      |  |   | 26,134,000                                               |   |  |   | 22,183,333 |   |  |   | 3,267,555  |  
|                                              |                             |      |            |                           |      |   |           |      |  |   |                                                          |   |  |   |            |   |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-2



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E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)



|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | -------- | - | ----------------------------------------------- | - | -------- | - |  | - | ---------- | -
|                                                                                                                     |  | Six Months Ended June 30, |          |   | PeriodMarch 14, 1990(Inception) toJune 30, 2004 |  
|                                                                                                                     |  | 2004                      |          |   | 2003                                            |   |         
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                 |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Net loss                                                                                                             |  | $                         | (294,959 | ) |                                                 | $ | (558,341 | ) |  | $ | (1,543,832 | )
|Adjustments to reconcile net loss to net cash used in operating activities:                                          |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Depreciation and amortization                                                                                        |  |                           | 15,338   |   |                                                 |   | 14,354   |   |  |   | 90,222     |  
|Stock based compensation                                                                                             |  |                           |         |   |                                                 |   | 600,000  |   |  |   | 605,000    |  
|Research and development costs                                                                                       |  |                           |         |   |                                                 |   |         |   |  |   | 8,808      |  
|Start-up costs                                                                                                       |  |                           |         |   |                                                 |   |         |   |  |   | 19,177     |  
|Amortization of prepaid expense                                                                                      |  |                           | 14,025   |   |                                                 |   |         |   |  |   | 30,600     |  
|Changes in operating assets and liabilities:                                                                         |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Accounts receivable                                                                                                  |  |                           | (66,324  | ) |                                                 |   | (172,485 | ) |  |   | (165,886   | )
|Inventory                                                                                                            |  |                           | (1,102   | ) |                                                 |   | (154,799 | ) |  |   | (162,355   | )
|Prepaid expenses                                                                                                     |  |                           | (4,074   | ) |                                                 |   | (665     | ) |  |   | (4,074     | )
|Accounts payable                                                                                                     |  |                           | (7,253   | ) |                                                 |   | 123,733  |   |  |   | 243,666    |  
|Accounts payable to related party                                                                                    |  |                           | (57,447  | ) |                                                 |   |         |   |  |   | 9,530      |  
|Accrued expenses                                                                                                     |  |                           | 88,832   |   |                                                 |   | 47,166   |   |  |   | 132,662    |  
|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Net Cash Used in Operating Activities                                                                                |  |                           | (312,964 | ) |                                                 |   | (101,037 | ) |  |   | (736,482   | )
|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                                 |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Purchases of property and equipment                                                                                  |  |                           | (12,839  | ) |                                                 |   | (6,703   | ) |  |   | (48,227    | )
|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Net Cash Used in Investing Activities                                                                                |  |                           | (12,839  | ) |                                                 |   | (6,703   | ) |  |   | (48,227    | )
|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                 |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Initial capitalization                                                                                               |  |                           |         |   |                                                 |   | 1,666    |   |  |   | 1,666      |  
|Cash acquired in acquisition                                                                                         |  |                           |         |   |                                                 |   |         |   |  |   | 200,000    |  
|Notes payable to bank                                                                                                |  |                           |         |   |                                                 |   | 65,000   |   |  |   | 141,098    |  
|Notes payable to financing company                                                                                   |  |                           | 5,115    |   |                                                 |   |         |   |  |   | 5,115      |  
|Notes payable to related party                                                                                       |  |                           | (54,101  | ) |                                                 |   | 35,000   |   |  |   | 266,484    |  
|Convertible promissory note                                                                                          |  |                           | 175,000  |   |                                                 |   |         |   |  |   | 175,000    |  
|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Net Cash Provided by Financing Activities                                                                            |  |                           | 126,014  |   |                                                 |   | 101,666  |   |  |   | 789,363    |  
|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|NET (DECREASE) INCREASE IN CASH                                                                                      |  |                           | (199,789 | ) |                                                 |   | (6,074   | ) |  |   | 4,654      |  
|CASH BEGINNING OF YEAR                                                                                               |  |                           | 204,443  |   |                                                 |   | 13,217   |   |  |   |           |  
|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|CASH END OF PERIOD                                                                                                   |  | $                         | 4,654    |   |                                                 | $ | 7,143    |   |  | $ | 4,654      |  
|                                                                                                                     |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Supplemental Schedule of Non-Cash Operating and                                                                      |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Financing Activities                                                                                                 |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|NeedleZap Partnership Contribution of Assets to Company                                                              |  |                           |          |   |                                                 |   |          |   |  |   |            |  
|Inventory                                                                                                            |  |                           |         |   |                                                 |   |         |   |  | $ | 151,015    |  
|Equipment                                                                                                            |  |                           |         |   |                                                 |   |         |   |  |   | 133,912    |  
|Patent                                                                                                               |  |                           |         |   |                                                 |   |         |   |  |   | 187,089    |  
|Issuance of convertible debentures to acquire inventory                                                              |  |                           | 375,000  |   |                                                 |   |         |   |  |   | 375,000    |  
|Issuance of 34,000 shares at $0.90 per share for Strategic Allowance Agreement                                       |  |                           |         |   |                                                 |   |         |   |  |   | 30,600     |  
|Issuance of 1,250,000 shares valued at $0.3108 per share to acquire MSTI and allocation of purchase price to license |  |                           |         |   |                                                 |   |         |   |  |   | 188,500    |  
|Interest paid                                                                                                        |  | $                         | 1,811    |   |                                                 |   |         |   |  |   | 10,124     |  



See accompanying notes
to consolidated financial statements.



F-3



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E MED FUTURE, INC.

(A Development Stage Company)



NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS



NOTE 1
BASIS OF PRESENTATION



The accompanying condensed consolidated
financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included. Results for the
three and six months ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. For further information, refer to the financial statements and footnotes thereto included in the E Med
Future, Inc., formerly Micro-Economics, Inc., annual report on Form 10-KSB for the year ended December 31, 2003.



NOTE 2 STOCKHOLDERS EQUITY



During the quarter ended June 30, 2004, the director of research, who had an outstanding loan to the Company, converted the loan to common stock. The loan balance at
December 31, 2003 was $320,585. During the six months ended June 30, 2004, the loan accrued interest of $9,399 and the Company made payments against the principal and interest of $63,500. The net loan balance, including interest at June 30, 2004,
was $266,484 and was converted to 749,415 shares of the Companys common stock at an average price of $0.356 per share.



NOTE 3 CONVERTIBLE PROMISSORY NOTE



On May 19, 2004, the Company entered into a convertible promissory note with an individual to lend the Company up to $750,000 of which $90,000 was in cash for working
capital and the balance to be advanced to suppliers for the purchase of inventory. As of June 30, 2004, $175,000 was advanced directly to the Company by the lender. The note bears interest at the rate of 7.5%, is payable quarterly and is
secured by a UCC Financing Agreement covering all of the Companys assets. The note, at the note holders option, can be converted into 1,500,000 shares of the Companys common stock. Additionally, the Company is obligated to make
royalty payments as follows: On the first one million (1,000,000) units produced and sold after March 18, 2004, a payment of $3.00 per unit; on the second one million (1,000,000) units produced and sold, a payment of $2.00 per unit. The maximum
aggregate royalty payments will be $5,000,000. Upon the option of the note holder to convert the note to 1,500,000 shares of the Companys common stock, the lender will own approximately 5.555% of the Companys issued and outstanding
shares. The Company warrants and represents that, throughout the loan period, the note holders ownership interest will not be diluted through the issuance of additional stock, warrants, options, convertible securities, preemption or other
rights which may dilute the earning potential of the note holders shares. For more information relating to the loan, please see the Financial Condition and Liquidity section of our December 31, 2004 Form 10-KSB.



NOTE 4 DISTRIBUTION AND MARKETING AGREEMENT



On April 30, 2004, the Company entered into a Distribution and Marketing Agreement with
Transglobal Medical Sales & Services, Inc. (hereafter referred to as Distributor). The agreement provided for the marketing and distribution of E Med products to all territories outside the United States with the exception of nations
where there were already existing agreements. The agreement was to remain in effect so long as the Distributor was not in default with respect to the agreement. The agreement provided that upon execution, the Distributor would issue a purchase order
to the Company for E Med products in the amount of 100,000 units for delivery within 12 months of the execution of the agreement. Additionally, the Distributor was to order with submission of the purchase order, a request for 10,000 units to be
delivered within 60 days. Payment in the amount of $560,000 for these units was to be paid in full within 90 days of execution of the agreement. The Company terminated the agreement November 19, 2004 due to Distributors failure to fulfill its
obligations under the agreement. The Company has initiated legal proceedings against the Distributor to recover damages resulting from its default on the agreement.



F-4