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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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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 March 31, 2005



| ̈ | 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, OH 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 May 1, 2005



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



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TABLE OF CONTENTS



|                                    |  |                                                             |  |  
|----------------------------------- |  | ----------------------------------------------------------- |  | -
|PART I 
FINANCIAL INFORMATION      |  | 1                                                          
|Item 1.                             |  | Financial Statements                                        |  | 1
|Item 2.                             |  | Managements Discussion and Analysis                        |  | 1
|Our Products                        |  | 1                                                          
|Recent Events                       |  | 2                                                          
|Looking Ahead                       |  | 2                                                          
|Our History                         |  | 2                                                          
|Results of Operations               |  | 3                                                          
|Net Sales                           |  | 3                                                          
|Costs and Expenses                  |  | 4                                                          
|Net Loss                            |  | 4                                                          
|Financial Condition and Liquidity   |  | 4                                                          
|Off-Balance Sheet Arrangements      |  | 5                                                          
|Forward Looking Statements          |  | 5                                                          
|How to Learn More About E Med       |  | 6                                                          
|Item 3.                             |  | Controls and Procedures                                     |  | 6
|PART II 
OTHER INFORMATION         |  | 7                                                          
|Item 1.                             |  | Legal Proceedings                                           |  | 7
|Item 2.                             |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 7
|Item 3.                             |  | Defaults Upon Senior Securities                             |  | 7
|Item 4.                             |  | Submission of Matters to a Vote of Security Holders         |  | 7
|Item 5.                             |  | Other Information                                           |  | 7
|Item 6.                             |  | Exhibits                                                    |  | 7
|SIGNATURES                          |  | 8                                                          
|MARCH 31, 2005 FINANCIAL STATEMENTS |  | F-1                                                        







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PART I  FINANCIAL INFORMATION



Item 1. Financial Statements



Our March 31, 2005
unaudited consolidated financial statements follow this quarterly report beginning on page F-1.



Item 2. Managements Discussion and Analysis



Headquartered in Columbus, Ohio, E Med Future, Inc. manufactures and markets products designed to reduce accidental hypodermic needlestick injuries. Our primary product, NeedleZap®, completely disintegrates the sharp portion of the
needle. According to the American Nursing Association, there are an estimated one million accidental needlesticks reported in the United States in the healthcare industry alone. We believe the applications for the product are far reaching, and
include healthcare professionals, law enforcement and correctional personnel, veterinarians, military, clinical researchers, hospitality, and sanitation workers. NeedleZap® is designed to work within the parameters of recent OSHA needlestick
mandates which require employers to take advantage of new technologies to prevent needlesticks in the workplace.



Our Products



Our primary product is
NeedleZap®, a revolutionary safety device intended to help reduce accidental needlestick injuries by disintegrating the sharp portion of a hypodermic needle. When a hypodermic needle is inserted into the unit, the patented electrode system
disintegrates the needle in approximately two seconds at 2200° F.



In July
2003, we announced the beginning of clinical testing and market evaluation of the first extensions to the NeedleZap® product line which include a dental parking station and butterfly needle burner. We are presently in the process of obtaining
patent protection for these new products. Because the Company lacks sufficient funds to expedite the development of these products, both products remain in the development phase. We anticipate that both products will involve supplements to our
existing FDA pre-market approval; therefore, introduction and timing of these products into the marketplace will be contingent on FDA approval.



The dental parking station is intended to provide a safer, temporary resting place for a hypodermic syringe. During a procedure, dentists often reuse a hypodermic needle
on the same patient when additional anesthesia is required. Since the needle is not destroyed immediately after the initial use, dentists generally recap the needle or leave the needle exposed, increasing the risk of an accidental needlestick
injury. The NeedleZap® unit sets directly on the dental parking station enabling the dentist to recap, or disintegrate, the hypodermic needle easily with one hand at the end of the procedure, and significantly reducing the risk of a needlestick
injury.



The butterfly needle burner is intended to accommodate needles not
secured to a hypodermic syringe. Butterfly needles are used primarily for IVs and kidney dialysis. Since the original NeedleZap® unit was intended to disintegrate hypodermic needles held by a syringe, the butterfly needle burner
necessitated design modifications, including a change to the housing and repositioning of the electrode system.



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To further expand our product offerings, we have entered into a strategic alliance agreement with UTEK Corporation
(AMEX:UTK), an innovative technology transfer company dedicated to building bridges between university developed technologies and commercial organizations. UTEK will identify and evaluate new technologies developed by universities and government
laboratories that would be synergistic with our existing product line for our possible acquisition. Our strategic alliance agreement with UTEK expired in 2004, but we have agreed to work with UTEK on a case-by-case basis for any compatible
technology.



On December 30, 2003, we acquired Medical Safety Technologies,
Inc. from UTEK. Medical Safety Technologies, or MSTI, holds the worldwide exclusive license to a patented invention, known as the Safe Receptacle for Sharps, that is designed to aid in the safe transport of sterile and used sharp medical
instruments. This Emory University invention was developed to help reduce the possibility of needlestick injuries by maintaining medical instruments in an angled, accessible position while encasing their sharp edges. We are enthusiastic about adding
the Safe Receptacle for Sharps device to our product line and believe that it is a complimentary technology to our NeedleZap® product. By expanding our future product line, we hope to bring added value to the sales and distribution channel we
are building. However, we are not presently pursuing the sharps receptacle as management believes resources should be conserved for marketing the currently approved product.



Recent Events



On January 3, 2005, Robert J.
Ochsendorf resigned as president and chief executive officer of E Med for personal and health reasons. D. Dane Donohue, previously our executive vice president, was immediately appointed as our new president and CEO. Mr. Ochsendorf remains a member
of our board of directors.



Looking Ahead



We incurred net losses the last
four years while we obtained FDA approval for our NeedleZap® product, applied for patent protection, entered into distribution relationships and test marketed the product. We have not had significant sales volume to date. We made significant
progress in expanding our distribution network in 2004, adding distribution partners in the United States and throughout the world. Although 2004 sales were disappointing, we believe that we have now obtained significant experience in how to market
our products effectively and we anticipate an increase in sales in 2005. Of course, we cannot guarantee that sales will increase or that we will be able to attain profitability.



Our History



The Company was formed under the
laws of the State of Nevada on March 14, 1990, but until 2003 we were a shell company with no significant operations other than seeking to identify an existing business to acquire. Trading in our stock was dependant on our acquisition of an
operating business. On April 4, 2003, we participated in a merger in which we acquired E Med Future, Inc., our operating subsidiary. In connection with the transaction, we issued 19,850,000 unregistered shares of our common stock (95% of our
outstanding shares) to the former stockholders of E Med Future.



Pursuant to
the terms of the merger agreement, we changed our corporate name from Micro-Economics, Inc. to E Med Future, Inc. In addition, our original directors resigned and were





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replaced by Robert J. Ochsendorf, D. Dane Donohue and Juan J. Perez. Messrs. Ochsendorf and Donohue served as our CEO and executive vice president,
respectively. Our shares began trading on the Over-the-Counter Bulletin Board under the symbol EMDF.OB on April 17, 2003. For additional information about the merger, and subsequent changes in management, please see the Current Reports
on Form 8-K dated April 4, 2003 that we filed with the SEC on April 11, 2003 and dated January 3, 2005 and filed on January 7, 2005.



In December 2001, we filed a pre-market approval application, or PMA, with The Center for Devices and Radiological Health (CDRH) of the Food and Drug Administration (FDA)
for NeedleZap®. On the basis of counsels advice, we determined that NeedleZap® was not regulated by the CDRH as a medical device in veterinarian or law enforcement applications. Therefore, we opted to market NeedleZap® in the
United States to veterinarians and law enforcement professionals. Revenues generated from these sales would offset the costly and lengthy FDA approval process and provide funding for promotion, tooling, parts and the overall operations.



In July 2002, we received an approvable letter from the FDA stating that NeedleZap®
met all the requirements for the safety and effectiveness data testing for a Class III medical device. The approvable letter was subject to an FDA inspection that found the manufacturing facilities, methods and controls in compliance with the
applicable requirements of FDA quality system regulation. During the manufacturing inspectional phase in August 2002, the FDA requested that we suspend all sales to veterinarian and law enforcement markets until the product was fully approved. We
voluntarily complied with the FDAs request and suspended all sales in U.S. markets and issued a recall for all units sold in the United States. In April 2004, we had recovered all devices that were sold prior to FDA approval and the FDA issued
a letter terminating the recall in July 2004.



On March 14, 2003, the FDA
issued a final approval order letter for NeedleZap®. Final labeling was submitted and approved on March 19, 2003, clearing the way to market NeedleZap® in the United States in healthcare facilities and treatment settings.



Results of Operations



We are a development stage
company and did not have full approval to market and sell our products until March 2003. Initial sales in 2003 caused us to be optimistic that our revenues and profits would increase in subsequent years. However, our 2004 results did not meet
expectations due to lower than anticipated sales by our distributors. Sales by our distributors in the first quarter of 2005 did not meet expectations and delivery of units to two international customers scheduled for the first quarter were delayed
due to requirements for payment prior to shipment.



Net Sales



We had net sales of $12,920 in the
quarter ended March 31, 2005, compared with $129,026 for the same period in 2004, a decrease of $116,106 or 90.0%. This decrease is primarily attributable to decreased domestic and international sales due to repeat orders from domestic distributors
not occurring and delays in shipping international orders due to our requiring payment in advance of shipment.



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Costs and Expenses



Operating costs and expenses
increased $1,855,213, or 729.9%, to $2,109,374 in the first quarter of 2005 from $254,161 in 2004. The first quarter of 2005 was impacted by $1,883,700 in stock based compensation expenses as a result of our issuance of 4,830,000 shares in January
2005, as compensation for consulting services previously rendered and $110,000 in management consulting services relating to prepaid compensation recorded in the third quarter of 2004 required to be expensed over a two year period. As a percentage
of net sales, cost of goods sold increased to 111.9% in 2005 from 58.7% in 2004 due to increased manufacturing and warranty related costs in 2005.



Other expenses increased $10,692, or 615.2%, to $12,430 in 2005 from $1,738 in 2004, due to an increase in interest expense resulting from higher balances outstanding on
our interest bearing debt in 2005.



Net Loss



In the first quarter of 2005, our net
loss increased to $2,108,884, or $0.07 a share, from a net loss of $126,873 in 2004 as a result of decreased sales combined with higher costs.



Financial Condition and Liquidity



We had no
available cash on March 31, 2005, compared to $5,002 at the end of the first quarter of 2004. Cash used in operations decreased 85.7% to $19,850 in the first quarter of 2005 from $138,622 in 2004, primarily caused by an increase in accounts payable
and accrued expenses in 2005.



On November 12, 2002, we entered into a credit
facility with KeyBank (NA). The facility provides us with a working capital line-of-credit of up to $150,000 and currently bears interest at 4.5%. The credit facility is secured by all of E Meds assets and must be paid back in full on demand.
We presently have drawn $149,098 on the facility.



On April 1, 2004, we entered
into a loan agreement with a private investor in the amount of $750,000. The convertible promissory note bears interest at 7.5% payable quarterly with the principal due in five years and is secured by all of our assets. The note is convertible at
the holders option into 1.5 million shares of our unregistered common stock, subject to adjustment for dilutive issuances. In connection with the loan, we also agreed to pay the lender a $3.00 royalty on each of the next 1.0 million
NeedleZap® units sold, with maximum total royalty payments of $5.0 million. The loan agreement was amended effective December 31, 2004 to reduce the loan amount to $548,000. Payment of interest and royalties was deferred until January 1, 2006,
provided we provide monthly sales reports to the lender when due. In addition, if we arrange an increase in bank financing, the lender agreed to subordinate its security interests to the secured interests of the banking institution up to a maximum
of $500,000. The lender had advanced $575,000 of the loan proceeds directly to PR Market Research Company, our primary vendor, without our approval. The reduced loan amount consists of $175,000 received by us from the lender and $373,000 that we
owed to PR Market Research for parts and services that was assigned to the lender.



Our primary need for capital is to fund operations and the development of new products. Historically, our capital requirements have been met by a combination of loans from stockholders and other investors, our line of credit with Key Bank,
and funds from operations.



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Now that our distributors have had sufficient ramp-up time, we expect increased sales to meet our capital needs. In addition, we are developing new
NeedleZap® products to help generate additional revenues. However, sales may not be adequate to meet our cash needs, which would negatively impact our operations and development of new and ancillary products.



Off-Balance Sheet Arrangements



We do not have
any material off-balance sheet arrangements.



Forward Looking Statements



Some of the
statements that we make in this report, including statements about our confidence in E Meds prospects and strategies and our expectations about E Meds sales expansion, are forward-looking statements within the meaning of § 21E of
the Securities Exchange Act. Some of these forward-looking statements can be identified by words like believe, expect, will, should, intend, plan, or similar terms; others can
be determined by context. Statements contained in this report that are not historical facts are forward-looking statements. These statements are necessarily estimates reflecting our best judgment based upon current information, and involve a number
of risks and uncertainties. Many factors could affect the accuracy of these forward-looking statements, causing our actual results to differ significantly from those anticipated in these statements. While it is impossible to identify all applicable
risks and uncertainties, they include:



| |  | our ability to execute our business plan;
|- |  | -----------------------------------------



| |  | our ability to successfully market and sell our products;
|- |  | ---------------------------------------------------------



| |  | our financial resources are limited and we are dependant on increasing sales to generate cash for operations and pay our liabilities as they come due;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our ability to gain and retain market share from our competitors, many of whom have greater financial and other resources than we do;
|- |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  | the introduction of competing products by other companies;
|- |  | ----------------------------------------------------------



| |  | our ability to protect our patents, copyrights and other intellectual property rights;
|- |  | --------------------------------------------------------------------------------------



| |  | pressure on pricing from our competitors or customers;
|- |  | ------------------------------------------------------



| |  | continued availability of components for our products and stability in the cost of these components;
|- |  | ----------------------------------------------------------------------------------------------------



| |  | our reliance on subcontractors to manufacture our products;
|- |  | -----------------------------------------------------------



| |  | our reliance on independent distributors to market and sell our products;
|- |  | -------------------------------------------------------------------------



| |  | our ability to continue to comply with rules and regulations governing our products; and
|- |  | ----------------------------------------------------------------------------------------



| |  | our ability to comply with SEC regulations and filing requirements applicable to us as a public company.
|- |  | --------------------------------------------------------------------------------------------------------



You should not place undue reliance on our forward-looking statements, which reflect our analysis only as of the date of this report. The
risks and uncertainties listed above and elsewhere in this report and other documents that we file with the Securities and Exchange Commission, including our annual report on Form 10-KSB, quarterly reports on Form 10-QSB, and any current reports on
Form 8-K, must be carefully considered by any investor or potential investor in E Med.



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How to Learn More About E Med



We file annual,
quarterly and special reports and other information with the SEC. Our SEC filings are available to the public over the internet at the SECs web site at SEC.gov. You may also read and copy any document we file at the SECs public reference
room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the SECs public reference room in Washington, D.C. by calling the SEC at 1-800-SEC-0330. To learn more about E Med you can also contact us
directly at the address or phone number listed below or visit our website at NeedleZap.com.



E Med Future, Inc.

794 Morrison Road

Suite 911

Columbus, Ohio 43230

Phone: 877- 855-1319

Email: info@NeedleZap.com



Item 3. Controls and Procedures



D. Dane
Donohue, our president and chief executive officer, and Donald Sullivan, our chief financial officer, have reviewed E Meds disclosure controls and procedures as of March 31, 2005. Based upon their review, they believe that our disclosure
controls and procedures are effective in ensuring that material information related to E Med is communicated to them by others within the company responsible for reporting this information.





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PART II  OTHER INFORMATION



Item 1. Legal Proceedings



We are currently
involved in a lawsuit with TransGlobal Medical Sales & Services, LLC relating to a distribution and marketing agreement we entered into with TransGlobal in April 2004. For additional information about the suit, please reference Item 3 of our
December 31, 2004 Form 10-KSB that we filed with the SEC on April 15, 2005.



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



Not applicable.



Item 3. Defaults Upon Senior Securities



Not
applicable.



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



Not applicable.



Item 5. Other Information



Not applicable.



Item 6. 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      





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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: May 16, 2005 |  | /s/ Donald Sullivan                        
|                   |  | By Donald Sullivan, Chief Financial Officer



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E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



CONSOLIDATED BALANCE SHEET (UNAUDITED)

March 31, 2005



|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                                                                                                                                    |  | March 31,2005 |            |   | December 31,2004 |  
|ASSETS                                                                                                                                                              |  |               |            |   |                  |   |            |  
|CURRENT ASSETS                                                                                                                                                      |  |               |            |   |                  |   |            |  
|Cash                                                                                                                                                                |  |               |            |   |                  | $ | 2,810      |  
|Accounts receivable, net of allowance for doubtful account of $64,744 and $67,744, respectively                                                                     |  | $             | 4,531      |   |                  |   | 2,511      |  
|Inventory                                                                                                                                                           |  |               | 483,643    |   |                  |   | 488,153    |  
|Prepaid expenses                                                                                                                                                    |  |               | 8,400      |   |                  |   | 17,713     |  
|Current portion of prepaid compensation                                                                                                                             |  |               | 440,000    |   |                  |   | 440,000    |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Current Assets                                                                                                                                                |  |               | 936,574    |   |                  |   | 951,187    |  
|                                                                                                                                                                    |  |              
|PREPAID CONSULTING COMPENSATION                                                                                                                                     |  |               | 201,667    |   |                  |   | 311,667    |  
|EQUIPMENT, net of depreciation of $66,647 and $60,932, respectively                                                                                                 |  |               | 162,072    |   |                  |   | 167,787    |  
|PATENTS AND LICENSES                                                                                                                                                |  |               |            |   |                  |   |            |  
|Patents, net of amortization $49,890 and $46,772, respectively                                                                                                      |  |               | 137,198    |   |                  |   | 140,316    |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|                                                                                                                                                                    |  | $             | 1,437,511  |   |                  | $ | 1,570,957  |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                |  |               |            |   |                  |   |            |  
|CURRENT LIABILITIES                                                                                                                                                 |  |               |            |   |                  |   |            |  
|Bank overdraft                                                                                                                                                      |  | $             | 2,782      |   |                  |   |            |  
|Notes payable to bank                                                                                                                                               |  |               | 149,098    |   |                  | $ | 141,098    |  
|Current portion of long-term debt                                                                                                                                   |  |               | 1,828      |   |                  |   | 1,828      |  
|Notes payable to related party                                                                                                                                      |  |               | 31,850     |   |                  |   | 25,000     |  
|Accounts payable                                                                                                                                                    |  |               | 278,355    |   |                  |   | 206,611    |  
|Accounts payable to related party                                                                                                                                   |  |               |            |   |                  |   | 25,376     |  
|Accrued expenses                                                                                                                                                    |  |               | 83,853     |   |                  |   | 55,523     |  
|Customer deposits                                                                                                                                                   |  |               | 100,000    |   |                  |   | 100,000    |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Current Liabilities                                                                                                                                           |  |               | 647,766    |   |                  |   | 555,436    |  
|                                                                                                                                                                    |  |              
|LONG-TERM DEBT                                                                                                                                                      |  |               |            |   |                  |   |            |  
|Convertible promissory note payable                                                                                                                                 |  |               | 548,000    |   |                  |   | 548,000    |  
|Note payable, less current portion                                                                                                                                  |  |               | 2,108      |   |                  |   | 2,700      |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Long-Term Debt                                                                                                                                                |  |               | 550,108    |   |                  |   | 550,700    |  
|                                                                                                                                                                    |  |              
|STOCKHOLDERS EQUITY                                                                                                                                                |  |               |            |   |                  |   |            |  
|Common stock $0.001 par value, 50,000,000 shares authorized, 34,013,415 and 29,183,415 issued and outstanding at March 31, 2005 and December
31, 2004, respectively |  |               | 34,013     |   |                  |   | 29,183     |  
|Paid-in-capital                                                                                                                                                     |  |               | 4,680,937  |   |                  |   | 2,802,067  |  
|Deficit accumulated during development stage                                                                                                                        |  |               | (4,475,313 | ) |                  |   | (2,366,429 | )
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|                                                                                                                                                                    |  |               | 239,637    |   |                  |   | 464,821    |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|                                                                                                                                                                    |  | $             | 1,437,511  |   |                  | $ | 1,570,957  |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  



See accompanying notes
to consolidated financial statements.



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E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)



|                                               |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|---------------------------------------------- |  | ---------------------------- | ---------- | - | -------------------------------------------------- | - | ---------- | - |  | - | ---------- | -
|                                               |  | Three Months Ended March 31, |            |   | Period March 14, 1990(Inception) to March 31, 2005 |  
|                                               |  | 2005                         |            |   | 2004                                               |   |           
|NET SALES                                      |  | $                            | 12,920     |   |                                                    | $ | 129,026    |   |  | $ | 812,912    |  
|                                               |  |                              |           
|COSTS AND EXPENSES-                            |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|Cost of goods sold                             |  |                              | 14,457     |   |                                                    |   | 75,729     |   |  |   | 555,687    |  
|Selling, general and administrative            |  |                              | 202,034    |   |                                                    |   | 170,764    |   |  |   | 1,595,746  |  
|Research and development                       |  |                              | 350        |   |                                                    |   |            |   |  |   | 9,783      |  
|Stock based compensation                       |  |                              | 1,883,700  |   |                                                    |   |            |   |  |   | 2,776,033  |  
|Impairment of goodwill                         |  |                              |            |   |                                                    |   |            |   |  |   | 188,500    |  
|Depreciation and amortization                  |  |                              | 8,833      |   |                                                    |   | 7,668      |   |  |   | 116,538    |  
|                                               |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|Total Costs and Expenses                       |  |                              | 2,109,374  |   |                                                    |   | 254,161    |   |  |   | 5,242,287  |  
|                                               |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|NET OPERATING LOSS                             |  |                              | (2,096,454 | ) |                                                    |   | (125,135   | ) |  |   | (4,429,375 | )
|                                               |  |                              |           
|OTHER INCOME (EXPENSE)                         |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|Interest and other income                      |  |                              |            |   |                                                    |   |            |   |  |   | 23         |  
|Interest expense                               |  |                              | (12,430    | ) |                                                    |   | (1,738     | ) |  |   | (45,961    | )
|                                               |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|Total Other Expenses                           |  |                              | (12,430    | ) |                                                    |   | (1,738     | ) |  |   | (45,938    | )
|                                               |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|NET LOSS                                       |  | $                            | (2,108,884 | ) |                                                    | $ | (126,873   | ) |  | $ | (4,475,313 | )
|                                               |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|NET LOSS PER COMMON SHARE -(Basic and diluted) |  | $                            | (0.06      | ) |                                                    | $ | (0.01      | ) |  | $ | (0.95      | )
|                                               |  |                              |            |   |                                                    |   |            |   |  |   |            |  
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING     |  |                              | 33,262,082 |   |                                                    |   | 26,134,000 |   |  |   | 4,689,536  |  
|                                               |  |                              |            |   |                                                    |   |            |   |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-2



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##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)



|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|------------------------------------------------------------------------ |  | ---------------------------- | ---------- | - | -------------------------------------------------- | - | -------- | - |  | - | ---------- | -
|                                                                         |  | Three Months Ended March 31, |            |   | Period March 14, 1990(Inception) to March 31, 2005 |  
|                                                                         |  | 2005                         |            |   | 2004                                               |   |         
|CASH FLOWS FROM OPERATING ACTIVITIES                                     |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|Net loss                                                                 |  | $                            | (2,108,884 | ) |                                                    | $ | (126,873 | ) |  | $ | (4,475,313 | )
|Adjustments to reconcile net loss to net cash from operating activities: |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|Depreciation and amortization                                            |  |                              | 8,833      |   |                                                    |   | 7,668    |   |  |   | 116,538    |  
|Stock based compensation                                                 |  |                              | 1,883,700  |   |                                                    |   |          |   |  |   | 2,776,033  |  
|Research and development costs                                           |  |                              |            |   |                                                    |   |          |   |  |   | 8,808      |  
|Start-up costs                                                           |  |                              |            |   |                                                    |   |          |   |  |   | 19,177     |  
|Amortization of prepaid expense                                          |  |                              |            |   |                                                    |   |          |   |  |   | 30,600     |  
|Amortization of prepaid compensation                                     |  |                              | 110,000    |   |                                                    |   |          |   |  |   | 110,000    |  
|Impairment of goodwill                                                   |  |                              |            |   |                                                    |   |          |   |  |   | 188,500    |  
|Changes in operating assets and liabilities:                             |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|Accounts receivable                                                      |  |                              | (2,020     | ) |                                                    |   | (44,064  | ) |  |   | (4,531     | )
|Inventory                                                                |  |                              | 4,510      |   |                                                    |   | 19,946   |   |  |   | (332,628   | )
|Prepaid expenses                                                         |  |                              | 9,313      |   |                                                    |   | (74      | ) |  |   | (8,399     | )
|Accounts payable                                                         |  |                              | 71,744     |   |                                                    |   | 38,865   |   |  |   | 278,352    |  
|Accounts payable to related party                                        |  |                              | (25,376    | ) |                                                    |   | (47,776  | ) |  |   |            |  
|Accrued expenses                                                         |  |                              | 28,330     |   |                                                    |   | 13,686   |   |  |   | 83,853     |  
|Customer deposits                                                        |  |                              |            |   |                                                    |   |          |   |  |   | 100,000    |  
|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|Net Cash Used in Operating Activities                                    |  |                              | (19,850    | ) |                                                    |   | (138,622 | ) |  |   | (1,109,010 | )
|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                     |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|Purchases of property and equipment                                      |  |                              |            |   |                                                    |   | (12,839  | ) |  |   | (94,806    | )
|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|Net Cash Used in Investing Activities                                    |  |                              |            |   |                                                    |   | (12,839  | ) |  |   | (94,806    | )
|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                     |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|Bank overdraft                                                           |  |                              | 2,782      |   |                                                    |   |          |   |  |   | 2,782      |  
|Initial capitalization                                                   |  |                              |            |   |                                                    |   |          |   |  |   | 1,666      |  
|Cash acquired in acquisition                                             |  |                              |            |   |                                                    |   |          |   |  |   | 200,000    |  
|Notes payable to bank                                                    |  |                              | 8,000      |   |                                                    |   |          |   |  |   | 149,098    |  
|Notes payable                                                            |  |                              | (592       | ) |                                                    |   | 5,520    |   |  |   | 3,936      |  
|Convertible promissory note payable                                      |  |                              |            |   |                                                    |   |          |   |  |   | 548,000    |  
|Notes payable to related party                                           |  |                              | 6,850      |   |                                                    |   | (53,500  | ) |  |   | 298,334    |  
|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|Net Cash Provided by (Used In) Financing Activities                      |  |                              | 17,040     |   |                                                    |   | (47,980  | ) |  |   | 1,203,816  |  
|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|NET (DECREASE) IN CASH                                                   |  |                              | (2,810     | ) |                                                    |   | (199,441 | ) |  |   |            |  
|                                                                         |  |                              |           
|CASH BEGINNING OF YEAR                                                   |  |                              | 2,810      |   |                                                    |   | 204,443  |   |  |   |            |  
|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  
|CASH END OF PERIOD                                                       |  |                              |            |   |                                                    | $ | 5,002    |   |  |   |            |  
|                                                                         |  |                              |            |   |                                                    |   |          |   |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-3



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##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)(CONTINUED)



|                                                                                                                     |  |                             |           |                                                   |   |       |  |   |          
|-------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | --------- | ------------------------------------------------- | - | ----- |  | - | ---------
|                                                                                                                     |  | Three Months EndedMarch 31, |           | PeriodMarch 14, 1990(Inception) to March 31, 2005
|                                                                                                                     |  | 2005                        |           | 2004                                              |  
|Supplemental Disclosure of Cash Flows Information:                                                                   |  |                             |           |                                                   |   |       |  |   |          
|Interest paid                                                                                                        |  | $                           | 12,430    |                                                   | $ | 1,738 |  | $ | 36,212   
|                                                                                                                     |  |                             |          
|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 common stock for consulting services                                                                     |  | $                           | 1,883,700 |                                                   |   |       |  |   | 2,953,300
|Issuance of 1,250,000 shares valued at $0.3108 per share to acquire MSTI and allocation of purchase price to license |  |                             |           |                                                   |   |       |  |   | 188,500  
|Issuance of common stock in payment of loan                                                                          |  |                             |           |                                                   |   |       |  |   | 266,484  



See accompanying notes
to consolidated financial statements.



F-4



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##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, 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 months ended March 31, 2005
are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. 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, 2004.



NOTE 2 ISSUANCE OF COMMON STOCK



During January 2005, the Company issued 4,830,000 shares of common stock, pursuant to Form S-8 at a value of $0.39 per share for consulting services. Stock based compensation was recorded in the amount of $1,883,700 for these services.



F-5