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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 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, 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:
26,883,415 shares of common stock, $0.001 par value per share, as of August 1, 2004



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



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TABLE OF CONTENTS



|                                            |  |                                           |  |                                                                                |  |   
|------------------------------------------- |  | ----------------------------------------- |  | ------------------------------------------------------------------------------ |  | --
|PART I 
FINANCIAL INFORMATION              |  | 3                                        
|                                            |  | Item 1.                                   |  | Financial Statements                                                           |  | 3 
|                                            |  | Item 2.                                   |  | Managements Discussion and Analysis                                           |  | 3 
|                                            |  | Our Products                              |  | 3                                                                             
|                                            |  | Recent Events                             |  | 4                                                                             
|                                            |  | Looking Ahead                             |  | 4                                                                             
|                                            |  | Our History                               |  | 5                                                                             
|                                            |  | Results of Operations                     |  | 6                                                                             
|                                            |  | Second Quarter of 2004 Compared to 2003   |  | 6                                                                             
|                                            |  |                                           |  | Net Sales                                                                      |  | 6 
|                                            |  |                                           |  | Costs and Expenses                                                             |  | 6 
|                                            |  |                                           |  | Net Income                                                                     |  | 6 
|                                            |  | First Six Months of 2004 Compared to 2003 |  | 6                                                                             
|                                            |  |                                           |  | Net Sales                                                                      |  | 6 
|                                            |  |                                           |  | Costs and Expenses                                                             |  | 6 
|                                            |  |                                           |  | Net Loss                                                                       |  | 7 
|                                            |  | Financial Condition and Liquidity         |  | 7                                                                             
|                                            |  | Off-Balance Sheet Arrangements            |  | 8                                                                             
|                                            |  | Forward Looking Statements                |  | 8                                                                             
|                                            |  | How to Learn More About E Med             |  | 8                                                                             
|                                            |  | Item 3.                                   |  | Controls and Procedures                                                        |  | 9 
|PART II 
OTHER INFORMATION                 |  | 10                                       
|                                            |  | Item 1.                                   |  | Legal Proceedings                                                              |  | 10
|                                            |  | Item 2.                                   |  | Changes in Securities and Small Business Issuer Purchases of Equity Securities |  | 10
|                                            |  | Item 3.                                   |  | Defaults Upon Senior Securities                                                |  | 10
|                                            |  | Item 4.                                   |  | Submission of Matters to a Vote of Security Holders                            |  | 10
|                                            |  | Item 5.                                   |  | Other Information                                                              |  | 10
|                                            |  | Item 6.                                   |  | Exhibits and Reports on Form 8-K                                               |  | 10
|                                            |  | (a)                                       |  | Exhibits                                                                       |  | 10
|                                            |  | (b)                                       |  | Reports on Form 8-K                                                            |  | 11
|SIGNATURES                                  |  | 12                                       
|UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS |  | F-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



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. Both products are currently in development and we are presently in the process of obtaining patent protection
for these new products. 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 often 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.



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.



Recent Events



In April, we entered into a
distribution license agreement with Transglobal Medical Sales and Service, Inc. from Orlando Florida. Transglobal will serve as an international distribution arm for us and has placed a blanket purchase order for 100,000 NeedleZap units to be
delivered over the next 12 months. Transglobal has issued a release for the first 10,000 units and we have invoiced for 7,000 of them. For more information about the Transglobal agreement, please see Note 4 of our attached financial statements at
page F-4.



In May, we received a registration number from the Mexican Health
Department (Secretaria de Salud) to sell NeedleZap through our distribution partners in Mexico, Intrasol de Mexico, S.A. de C.V. and American Health & Safety Products, Inc.



In July, we announced that our distribution partners in Uganda, Global Marketing Group and Lily Pharmacy Ltd., had requested funding for
5,000 NeedleZap units from the United States Agency for International Development (USAID). USAID recently announced the availability of $6.0 million in funds to enhance medical injection safety programs to reduce the transmission of HIV in
developing countries, sometimes caused by the use of unsafe and unnecessary medical injections. Six African countries, including Uganda, were selected to receive funding as part of the $15 billion Presidents Emergency Plan for AIDS Relief.
According to the press statement issued by USAID, the World Health Organization estimates that more than 16 billion medical injections are administered in developing countries every year, however, many are given in an unsafe manner exposing patients
and medical workers to avoidable health risks like HIV.



Also in July, we
entered into a manufacturing and distribution license agreement with Providers International LLC for the manufacture and distribution of the NeedleZap device in the Peoples Republic of China and Australia. The agreement calls for Providers to
manufacture and sell a minimum of 100,000 devices per year and pay us a royalty of $8.10 per unit.



Looking Ahead



We incurred net losses in 2002 and
2003 while we obtained FDA approval for our NeedleZap product, applied for patent protection and entered into distribution relationships. We have not



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had significant sales volume to date, but now that we have FDA approval and established distribution channels, we are
excited about the prospect for sales in the United States and abroad. There are an estimated one million accidental needlesticks reported in the United States in the healthcare industry alone, and we believe the applications for our products are far
reaching. 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. We also believe there is a potential global
market in developed as well as developing countries. For example, NeedleZap could be a component in the fight against AIDS in many African countries where the disease is endemic. With all regulatory matters resolved, we anticipate an increase in
sales in 2004. Of course, we cannot guaranty 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 last year 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 replaced by Robert J. Ochsendorf, D. Dane Donohue and
Juan J. Perez. Messrs. Ochsendorf and Donohue now serve 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, please see the Current Report on Form 8-K dated April 4, 2003 that we filed with the SEC on April 11, 2003.



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.



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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. Because we did not have full approval to market and sell our products until March 2003, we do not believe a detailed comparison of results from 2004 to 2003 to be informative. For addition information regarding the history of our business,
please see Our History above.



Second Quarter of 2004 Compared to 2003



Net Sales



We had net sales of $439,874 in the
quarter ended June 30, 2004, compared with $196,987 for the same period in 2003, an increase of $242,887 or 123.3%. This increase is primarily attributable to sales to Transglobal Medical Sales & Services. Please turn to Recent
Events at page 4 for more information about our distribution agreement with Transglobal.



Costs and Expenses



Operating costs and expenses
increased $242,374, or 165.6%, to $388,692 in the second quarter of 2004 from $146,318 in 2003 due to an increase in the cost of goods sold. As a percentage of net sales, cost of goods sold increased to 69.4% in 2004 from 29.7% in 2003 due to
additional expenses in 2004 associated with maintaining FDA compliance for our products.



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 $19,229, or 38.0%, to $31,440 from $50,669 in 2003 as a result of higher cost of goods sold only partially offset by increased sales.



First Six Months of 2004 Compared to 2003



Net Sales



We had net sales of $568,900 in the
six months ended June 30, 2004, compared with $247,529 for the same period in 2003, an increase of $321,371 or 129.8%. This increase is primarily attributable to increased sales following the FDAs approval of NeedleZap in March 2003.



Costs and Expenses



Operating costs and expenses
decreased $163,017, or 20.2%, to $642,853 in the first six months of 2004 from $805,870 in 2003. The first half of 2003 was impacted by $600,000 in stock based compensation expenses as a result of our issuance of four million shares in April 2003 as
compensation for consulting services previously rendered. This effect was partially offset by increased selling, general and administrative expense in 2004 due to higher distributor training and promotional costs. As a percentage of net sales, cost
of goods sold increased to 67.0% in 2004 from 27.4% in 2003 due to additional expenses in 2004 associated with maintaining FDA compliance for our products.



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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 $95,433 from a net loss of $558,341 in 2003 as a result of increased sales combined with lower costs.



Financial Condition and Liquidity



We had
available cash of $4,654 on June 30, 2004, compared to $7,143 at the end of the first half of 2003. Cash used in operations increased 209.8% to $312,964 in the first half of 2004 from $101,037 in 2003, primarily caused by increased accounting and
legal fees in 2004 associated with complying with Securities and Exchange Commission requirements applicable to us after we became a public company in April 2003. The cost of ongoing FDA compliance also increased in 2004 compared to 2003.



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 $141,098
on the facility.



In 2003, our director of research purchased an existing
$215,585 loan and advanced additional funds bringing total funds advanced to $320,585. In the first half of 2004, we repaid a portion of this loan, reducing the outstanding balance to $266,484 at June 30, 2004. We repaid this loan in full as of June
30 by the issuance of 749,415 unregistered shares of our common stock to the note holder. Please turn to Changes in Securities and Small Business Issuer Purchases of Equity Securities on page 10 for more information about this issuance.



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. Proceeds from the loan will be used for inventory and operating expenses. 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 and $2.00 on each of the following 1.0 million units, with maximum total royalty payments of $5.0 million. For additional information regarding the loan, please see Note 3 of our attached financial statements at page
F-4.



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, our line of credit with Key Bank, and funds from operations. 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.



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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 we anticipate. 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 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 firms;
| | - | ------------------------------------------------------



| |  | 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 financial resources are limited and we are dependant on increasing sales to generate cash for operations; and
| | - | -----------------------------------------------------------------------------------------------------------------



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



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.



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



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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



Robert J.
Ochsendorf, our President and Chief Executive Officer, and D. Dane Donohue, our Executive Vice President, have reviewed E Meds disclosure controls and procedures as of June 30, 2004. 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



Not applicable.



Item 2. Changes in Securities and Small Business Issuer Purchases of Equity Securities



On April 1, 2004, we issued a convertible debenture to a private investor for his investment of $750,000. The debenture holder may elect to convert the debenture into 1.5
million shares of our unregistered common stock. We believe this issuance is exempt from registration under § 4(2) of the Securities Act and related regulations. Please turn to Financial Condition and Liquidity on page 7 for more
information about the debenture.



As of June 30, 2004, we issued 749,415
unregistered shares of our common stock to our director of research in exchange for a promissory note held by him. The amount outstanding on the note as of June 30 was $266,484. We believe this issuance is exempt from registration under § 4(2)
of the Securities Act and related regulations. Please turn to Financial Condition and Liquidity on page 7 for more information about this debt.



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 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



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|     |  |                                                                                           
|---- |  | ------------------------------------------------------------------------------------------
|32.1 |  | Rule 13a-14(b)/15d-14(b) Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002



(b) Reports on Form 8-K



We did not file any
current reports on Form 8-K during the second quarter of 2004.



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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: August 13, 2004 |  |  |  | /s/ D. Dane Donohue                         
|                      |  |  |  | By D. Dane Donohue, Executive Vice President



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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                                          |  |   | 545,606    |  
|Inventory                                                                                                       |  |   | 508,176    |  
|Prepaid expenses                                                                                                |  |   | 4,075      |  
|                                                                                                                |  |   |            |  
|Total Current Assets                                                                                            |  |   | 1,062,511  |  
|                                                                                                                | 
|EQUIPMENT, net of depreciation                                                                                  |  |   | 132,454    |  
|PATENTS AND LICENSES                                                                                            |  |   |            |  
|Patents, net of amortization $49,336                                                                            |  |   | 335,052    |  
|                                                                                                                |  |   |            |  
|                                                                                                                |  | $ | 1,530,017  |  
|                                                                                                                |  |   |            |  
|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                                                                                     |  |   | 550,000    |  
|                                                                                                                | 
|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                                                                    |  |   | (1,344,306 | )
|                                                                                                                |  |   |            |  
|                                                                                                                |  |   | 447,944    |  
|                                                                                                                |  |   |            |  
|                                                                                                                |  | $ | 1,530,017  |  
|                                                                                                                |  |   |            |  



See accompanying notes
to consolidated financial statements.



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E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)



|                                              |  |                             |            |   |                           |   |           |                                                          |  |   |            |   |  |   |            |   |  |   |            |  
|--------------------------------------------- |  | --------------------------- | ---------- | - | ------------------------- | - | --------- | -------------------------------------------------------- |  | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                              |  | Three Months Ended June 30, |            |   | Six Months Ended June 30, |   |           | For the PeriodMarch 14, 1990(Inception) to June 30, 2004 | 
|                                              |  | 2004                        |            |   | 2003                      |   |           | 2004                                                     |  |   | 2003       |   | 
|NET SALES                                     |  | $                           | 439,874    |   |                           | $ | 196,987   |                                                          |  | $ | 568,900    |   |  | $ | 247,529    |   |  | $ | 1,250,385  |  
|                                              |  |                             |            |   |                          
|COSTS AND EXPENSES-                           |  |                             |            |   |                           |   |           |                                                          |  |   |            |   |  |   |            |   |  |   |            |  
|Cost of goods sold                            |  |                             | 305,185    |   |                           |   | 58,558    |                                                          |  |   | 380,914    |   |  |   | 67,869     |   |  |   | 746,771    |  
|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                      |  |                             | 388,692    |   |                           |   | 146,318   |                                                          |  |   | 642,853    |   |  |   | 805,870    |   |  |   | 2,495,726  |  
|                                              |  |                             |            |   |                           |   |           |                                                          |  |   |            |   |  |   |            |   |  |   |            |  
|NET OPERATING INCOME (LOSS)                   |  |                             | 51,182     |   |                           |   | 50,669    |                                                          |  |   | (73,953    | ) |  |   | (558,341   | ) |  |   | (1,245,341 | )
|                                              |  |                             |            |   |                          
|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)                             |  | $                           | 31,440     |   |                           | $ | 50,669    |                                                          |  | $ | (95,433    | ) |  | $ | (558,341   | ) |  | $ | (1,275,111 | )
|                                              |  |                             |            |   |                           |   |           |                                                          |  |   |            |   |  |   |            |   |  |   |            |  
|NET LOSS PER COMMON SHARE (Basic and diluted) |  |                             |           |   |                           |   | (.04      | )                                                        |  |   |           |   |  |   | (.03       | ) |  |   | (.39       | )
|                                              |  |                             |            |   |                           |   |           |                                                          |  |   |            |   |  |   |            |   |  |   |            |  
|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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##### Table of Contents

E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)



|                                                                                                                     |  |                           |          |   |                                              |   |          |      |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | -------- | - | -------------------------------------------- | - | -------- | ---- |  | - | ---------- | -
|                                                                                                                     |  | Six Months Ended June 30, |          |   | Period March 14, 1990(Inception) to June 30, |  
|                                                                                                                     |  | 2004                      |          |   | 2003                                         |   |          | 2004 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                 |  |                           |          |   |                                              |   |          |      |  |   |            |  
|Net loss                                                                                                             |  | $                         | (95,433  | ) |                                              | $ | (558,341 | )    |  | $ | (1,344,306 | )
|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                                                                                                  |  |                           | (446,044 | ) |                                              |   | (172,485 | )    |  |   | (545,606   | )
|Inventory                                                                                                            |  |                           | 179,092  |   |                                              |   | (154,799 | )    |  |   | 17,839     |  
|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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##### Table of Contents

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. 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.



NOTE 4 DISTRIBUTION AND MARKETING AGREEMENT



On May 13, 2004, the Company entered into a Distribution and Marketing
Agreement with Transglobal Medical Sales & Services, Inc. (hereafter referred to as Distributor). The agreement provides for the marketing and distribution of E Med products to all territories outside the United States with the
exception of nations where there are already existing agreements. The agreement shall remain in effect so long as the Distributor is not in default with respect to the agreement. The agreement provides that upon execution, the Distributor will 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 shall order with submission of the purchase order, a request for 10,000
units. Payment in the amount of $560,000 for these units is to be paid in full within 90 days of execution of the agreement. As at June 30, 2004, 7,000 units have been shipped, and sales and related receivables of $392,000 have been recorded in the
financial statements.



F-4