##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---

FORM 10-QSB



---

(Mark One)

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

For the quarterly period ended September 30, 2006



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

Commission file number: 33-55254-36



---

E Med Future, Inc.

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



---



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

794 Morrison Road, Suite 911, Columbus, Ohio 43230

(Address of principal executive offices)



|                            |  |                   
|--------------------------- |  | ------------------
|330-674-1363                |  | www.NeedleZap.com 
|(Issuers telephone number) |  | (Issuers website)



---

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 ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes ̈No  x

State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: 42,513,415 shares of
common stock, $0.001 par value per share, as of November 1, 2006.

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



---



---

##### Table of Contents

TABLE OF CONTENTS



|                                                                           |  |    
|-------------------------------------------------------------------------- |  | ---
|PART I  FINANCIAL INFORMATION                                             |  | 1  
|Item 1.      
Financial Statements                                         |  | 1  
|Item 2.       
Managements Discussion and Analysis                        |  | 1  
|Our Products                                                               |  | 1  
|Looking Ahead                                                              |  | 2  
|Our History                                                                |  | 2  
|Results of Operations                                                      |  | 2  
|Third Quarter of 2006 Compared to 2005                                     |  | 3  
|Net Sales                                                                  |  | 3  
|Costs and Expenses                                                         |  | 3  
|Net Loss                                                                   |  | 3  
|First Six Months of 2006 Compared to 2005                                  |  | 3  
|Net Sales                                                                  |  | 3  
|Costs and Expenses                                                         |  | 3  
|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                                                    |  | 8  
|SIGNATURES                                                                 |  | 9  
|FINANCIAL STATEMENTS                                                       |  | F-1



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

Our September 30, 2006 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. We are currently
exploring improvements to the NeedleZap® to make it more user-friendly.

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 we lack
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 sits 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.



1



---

##### Table of Contents

On December 30, 2003, we acquired Medical Safety Technologies, Inc. from UTEK Corporation. 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 channels 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.

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. Although sales were disappointing for 2005, we believe that we have now obtained valuable
experience in how to market our products effectively and we anticipate a slight increase in sales in 2006. However, sales for the first three quarters of the year were less than our sales for the same period in 2005 and 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 then 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 and officers resigned and were replaced by a new board and management team. 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.

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 and 2005 results did not meet expectations due to lower than anticipated sales by our distributors.
Sales in the first three quarters of 2006 continue to lag behind our expectations.



2



---

##### Table of Contents

Third Quarter of 2006 Compared to 2005

Net Sales

We had net sales of $16,014 in the quarter ended September 30, 2006, compared with $52,442 for the same period
in 2005, a decrease of $36,428 or 69.5%. This decrease is primarily attributable to decreased sales by our distributors due to the termination of our distribution arrangement with Safe Medical Solutions LLC which had accounted for 70% of our total
sales and over 90% of our sales in the United States. We are working diligently on our marketing plan for the United States and expect to have it implemented late in the fourth quarter of 2006.

Costs and Expenses

Operating costs and expenses decreased $8,573, or 6.4% in the third quarter of 2006 to $125,962 from
$134,535 in 2005. Operating costs and expenses for the third quarter of 2006 were reduced due to cost cutting measures instituted by management which were partially offset by over $40,000 of legal fees incurred in connection with litigation
resulting from the termination of our distribution arrangement with Safe Medical Solutions LLC and Kenneth A. Jackson. As a percentage of net sales, cost of goods sold decreased to 58.7% in 2006 from 67.0% in 2005 due to decreased warranty related
costs in the third quarter of 2006.

Other expenses increased $1,052, or 8.0%, to $14,175 in 2006 from $13,123 in 2005, due to an increase in interest
expense resulting from higher interest rates on our interest bearing debt in 2006.

Net Loss

In the third quarter of 2006, our net loss increased to $116,704 from a net loss of $95,216 in 2005 as a result of
substantially increased legal fees in connection with the termination of the distribution arrangement with Safe Medical Solutions.

First Nine Months of 2006 Compared to 2005

Net Sales

We had net sales of $51,318 in the nine months ended September 30, 2006, compared with $71,972 for the same
period in 2005, a decrease of $20,654 or 28.7%. This decrease is primarily attributable to lower sales by our distributors and lower export sales.

Costs and Expenses

Operating costs and expenses decreased $913,080, or 77.7%, to $262,272 in the first nine months of 2006
from $1,175,352 in 2005. Operating costs and expenses for the first nine months of 2006 were reduced due to cost cutting measures instituted by management and only $25,500 of stock based compensation for employees and consultants being paid in 2006
compared to $627,900 of stock based compensation expense in the same period of 2005. As a percentage of net sales, cost of goods sold decreased to 61.0% in the first half of 2006 from 72.4% in 2005 due to reduced warranty related costs in 2006.



3



---

##### Table of Contents

Other expenses increased $3,793, or 9.9%, to $42,034 in 2006 from $38,241 in 2005, due to an increase in interest expense
resulting from higher interest rates on our interest bearing debt in 2006.

Net Loss

In the first nine months of 2006, our net loss decreased to $245,569 from a net loss of $1,141,621 in 2005 as a
result of a substantial decrease in stock based compensation and cost cutting measures instituted by management.

Financial Condition and Liquidity

We had available cash on September 30, 2006 of $33,931 compared to $2,278 at
September 30, 2005. In the first nine months of 2006 cash used in operations increased 50.0% to $26,309 from $17,540 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 9.25%. 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 first 1.0 million and $2.00 on the second
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. We have not paid royalties to the lender and are currently in default under the loan. Please turn to Legal Proceedings on page 7 for more information.

From September 2004 to June 2006, Ronald L. Alexander, one of our directors, loaned E Med a total of $136,120. On June 15, 2006, we issued Mr. Alexander
3.5 million unregistered shares in partial satisfaction of this loan. On June 28, 2006, a private investor purchased 1.5 million shares of our unregistered shares for $45,000, or $0.03 a share. On June 15, 2006, we issued
3.5 million unregistered shares to Donald Sullivan, our CFO, interim CEO and a director, for payment of accrued wages from January 1, 2005 through May 31, 2006.

Our primary need for capital is to fund operations and the development of new products. More recently we have been forced to expend significant funds to defend the company from the actions of Kenneth Jackson and Safe
Medical Solutions. Please turn to Legal Proceedings on Page 7 and Other Information on Page 7 for additional information. 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. Although sales continue to be disappointing, we believe increased sales may eventually meet our capital needs in the long-term. However, current sales are not adequate to
meet our cash needs, and without additional loans or equity in fusions we will not be able to continue our operations.



4



---

##### Table of Contents

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 ability to defend ourselves in currently pending lawsuits;
|- |  | --------------------------------------------------------------



| |  | 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;
|- |  | ------------------------------------------------------------------------------------



| |  | the outcome of a pending SEC information inquiry relating to the Company; and
|- |  | -----------------------------------------------------------------------------



| |  | our ability to comply with SEC regulations and filing requirements applicable to us as a public company and maintain our shares on the Over-the-Counter Bulletin Board.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

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,



5



---

##### Table of Contents

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 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: 330-674-1363

Email: info@NeedleZap.com

Item 3. Controls and Procedures

Donald Sullivan, our chief financial officer and interim president and chief executive
officer, has reviewed E Meds disclosure controls and procedures as of September 30, 2006. Based upon his review, he believes that our disclosure controls and procedures are effective in ensuring that material information related to E Med
is communicated to him by others within the company responsible for reporting this information. There were no changes in our internal controls over financial reporting during the fiscal quarter ended September 30, 2006 that have materially
affected or are reasonably likely to affect, our internal controls over financial reporting.



6



---

##### Table of Contents

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. We have negotiated a settlement with TransGlobal and expect the suit to be dismissed with prejudice. For additional information about the suit, please
reference Item 3 of our December 31, 2005 Form 10-KSB that we filed with the SEC on May 16, 2006.

On July 31, 2006, Safe Medical
Solutions (Safe Med) filed a suit against E Med, Donald Sullivan, our CFO and interim CEO, Curtis Sheely, a former employee of Safe Med currently employed by E Med, and Daniel Clevenger. Safe Med is owned by Kenneth A. Jackson, our
former director of research. Safe Med claimed that E Med was interfering with its business by contacting its customers. It claimed damages and sought an immediate temporary restraining order, which was not issued. Discovery in the action is pending.
We do not believe Safe Meds claims against E Med have any merit. For additional background to this case please see Other Information below.

On August 6, 2006, Complete Investment Management (CIM) filed an action against E Med and Kenneth A. Jackson. CIM sought the appointment of a receiver and the repayment of a loan made by CIM to E Med in the amount of
$548,000. At an August 4 hearing the judge declined to appoint a receiver for E Med. CIM did obtain a judgment against Jackson for $381,339 plus interest. E Med acknowledges that it is in default in its payment to CIM and hopes to arrive at a
mutually agreeable settlement with CIM.

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Complete Investment Management has loaned E Med a total of $548,000. E Med is in
default of its payment obligations and CIM has instituted suit in connection with this loan. For more information, please see Legal Proceedings above.

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

Not applicable.

Item 5. Other Information

On June 26, 2006, we terminated our distribution arrangements with Safe Medical
Solutions, LLC, PR Market Research and Kenneth A. Jackson, our former director of research and the



7



---

##### Table of Contents

owner of those two companies. We had been disappointed with Jackson and Safe Medical Solutions sales performance
and determined that it was in E Meds best interest to terminate Jacksons distribution arrangement for our NeedleZap® product.

In response
to his termination, Jackson filed with the U.S. Patent and Trademark Office (the PTO) to transfer E Meds NeedleZap® patent to him personally. Jackson, along with two former E Med officers, transferred the patent to E Med on July 9,
2001. In consideration of the assignment, we agreed to pay a royalty to Jackson and the two other inventors. This royalty has not been paid since 2001 when, because of the companys slow sales, the inventors agreed to waive the royalty until
the company becomes profitable, as we have previously reported. Now Jackson claims, without making any prior demand for payment, that our default on the royalty payment entitles him to take the patent, despite the fact that our written
agreement with Jackson gives him no such right. We believe E Med is the clear and undisputed owner of the patent and any efforts on Jacksons part to obtain the patent would amount to theft of our intellectual property. In addition, Jackson has
taken actions to cancel our NeedleZap® trademark. Of course, he has no ownership of our trademark and no right to terminate it.

Jacksons efforts
to interfere with our business are the actions of a disgruntled former consultant who we believe may have significant financial problems. We do not intend to allow him to destroy the company we have worked so hard to build. We intend to vigorously
defend ourselves from his suit and pursue our own legal claims against Jackson. However, his actions may have a significant negative impact on our business and financial results until all issues pertaining to Jackson and his related companies have
been resolved.

Item 6. Exhibits



|31 | Chief Financial Officer and Interim President and Chief Executive Officers Rule 13a-14(a)/15d-14(a) Certification Pursuant to § 302 of the Sarbanes-Oxley Act of 2002
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|32 | Rule 13a-14(b)/15d-14(b) Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002
|-- | ------------------------------------------------------------------------------------------



8



---

##### Table of Contents

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: November 13, 2006 |  | By                 |  | /s/ Donald Sullivan                     
|                        |  |                    |  | Donald Sullivan, Chief Financial Officer
|                        |  |                    |  | and interim Chief Executive Officer     



9



---

##### Table of Contents

E MED FUTURE, INC. AND SUBSIDIARY

Formerly Micro-Economics, Inc.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                                                                                                                                 |  | September 30,2006 |            |   | December 30,2005 |  
|                                                                                                                                                                 |  | (Unaudited)       |            |   |                  |  
|ASSETS                                                                                                                                                           |  |                   |            |   |                  |   |            |  
|CURRENT ASSETS                                                                                                                                                   |  |                   |            |   |                  |   |            |  
|Cash                                                                                                                                                             |  | $                 | 33,931     |   |                  |   |            |  
|Accounts receivable                                                                                                                                              |  |                   | 4,682      |   |                  | $ | 16,410     |  
|Inventory                                                                                                                                                        |  |                   | 95,057     |   |                  |   | 105,128    |  
|Prepaid expenses                                                                                                                                                 |  |                   | 8,400      |   |                  |   | 8,400      |  
|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  
|Total Current Assets                                                                                                                                             |  |                   | 142,070    |   |                  |   | 129,938    |  
|                                                                                                                                                                 |  |                  
|EQUIPMENT, net of accumulated depreciation of $4,742 and $9,578, respectively                                                                                    |  |                   | 17,660     |   |                  |   | 21,426     |  
|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  
|Total Assets                                                                                                                                                     |  | $                 | 159,730    |   |                  | $ | 151,364    |  
|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                                                                                                   |  |                   |            |   |                  |   |            |  
|CURRENT LIABILITIES                                                                                                                                              |  |                   |            |   |                  |   |            |  
|Bank overdraft                                                                                                                                                   |  |                   |            |   |                  | $ | 365        |  
|Notes payable to bank                                                                                                                                            |  | $                 | 149,098    |   |                  |   | 149,098    |  
|Current portion of notes payable                                                                                                                                 |  |                   | 1,484      |   |                  |   | 1,828      |  
|Notes payable to related party                                                                                                                                   |  |                   | 72,090     |   |                  |   | 2,000      |  
|Accounts payable                                                                                                                                                 |  |                   | 231,162    |   |                  |   | 242,932    |  
|Accounts payable to related party                                                                                                                                |  |                   | 41,369     |   |                  |   | 57,108     |  
|Accrued expenses                                                                                                                                                 |  |                   | 208,058    |   |                  |   | 190,695    |  
|Customer deposits                                                                                                                                                |  |                   | 99,480     |   |                  |   |            |  
|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  
|Total Current Liabilities                                                                                                                                        |  |                   | 802,741    |   |                  |   | 644,026    |  
|                                                                                                                                                                 |  |                  
|LONG-TERM DEBT                                                                                                                                                   |  |                   |            |   |                  |   |            |  
|Notes payable, less current portion                                                                                                                              |  |                   |            |   |                  |   | 1,280      |  
|Notes payable to related party                                                                                                                                   |  |                   |            |   |                  |   | 126,000    |  
|Convertible promissory note payable                                                                                                                              |  |                   | 548,000    |   |                  |   | 548,000    |  
|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  
|Total Long-Term Debt                                                                                                                                             |  |                   | 548,000    |   |                  |   | 675,280    |  
|                                                                                                                                                                 |  |                  
|STOCKHOLDERS EQUITY (DEFICIT)                                                                                                                                   |  |                   |            |   |                  |   |            |  
|Common stock $0.001 par value, 50,000,000 authorized, 42,513,415 and 32,763,415 issued and outstanding at September 30, 2006 and
December 30, 2005, respectively |  |                   | 42,513     |   |                  |   | 32,763     |  
|Paid-in Capital                                                                                                                                                  |  |                   | 3,476,637  |   |                  |   | 3,263,887  |  
|Deficit accumulated during development stage                                                                                                                     |  |                   | (4,710,161 | ) |                  |   | (4,464,592 | )
|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  
|Total Stockholders Deficit                                                                                                                                      |  |                   | (1,191,011 | ) |                  |   | (1,167,942 | )
|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  
|Total Liabilities and Stockholders Equity (Deficit)                                                                                                             |  | $                 | 159,730    |   |                  | $ | 151,364    |  
|                                                                                                                                                                 |  |                   |            |   |                  |   |            |  

See accompanying notes to consolidated financial statements



F-1



---

##### Table of Contents

E MED FUTURE, INC. AND SUBSIDIARY

Formerly Micro-Economics, Inc.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                              |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|--------------------------------------------- |  | ------------------ | ---------- | - | ----------------- | - | ---------- | ------------------------------------------------------- |  | - | ----------------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                              |  | Three Months Ended |            |   | Nine Months Ended |   |            | Period March 14, 1990 (Inception)
to September 30, 2006 | 
|                                              |  | September 30,2006  |            |   | September 30,2005 |   |            | September 30,2006                                       |  |   | September 30,2005 |   | 
|NET SALES                                     |  | $                  | 16,014     |   |                   | $ | 52,442     |                                                         |  | $ | 51,318            |   |  | $ | 71,972     |   |  | $ | 971,819    |  
|                                              |  |                    |            |   |                  
|COSTS AND EXPENSES                            |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|Cost of goods sold                            |  |                    | 9,406      |   |                   |   | 35,132     |                                                         |  |   | 31,329            |   |  |   | 52,130     |   |  |   | 761,730    |  
|Selling, general and administrative           |  |                    | 115,784    |   |                   |   | 90,125     |                                                         |  |   | 201,926           |   |  |   | 468,026    |   |  |   | 1,837,014  |  
|Loss due to inventory obsolescence            |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   | 225,110    |  
|Impairment of long lived assets               |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   | 251,344    |  
|Research and development                      |  |                    |            |   |                   |   | 445        |                                                         |  |   | 1,200             |   |  |   | 796        |   |  |   | 16,747     |  
|Consulting expense                            |  |                    |            |   |                   |   |            |                                                         |  |   | 25,500            |   |  |   | 627,900    |   |  |   | 2,134,900  |  
|Impairment of goodwill                        |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   | 188,500    |  
|Depreciation and amortization                 |  |                    | 772        |   |                   |   | 8,833      |                                                         |  |   | 2,317             |   |  |   | 26,500     |   |  |   | 145,355    |  
|                                              |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|Total Costs and Expenses                      |  |                    | 125,962    |   |                   |   | 134,535    |                                                         |  |   | 262,272           |   |  |   | 1,175,352  |   |  |   | 5,560,700  |  
|                                              |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|NET OPERATING LOSS                            |  |                    | (109,948   | ) |                   |   | (82,093    | )                                                       |  |   | (210,954          | ) |  |   | (1,103,380 | ) |  |   | (4,588,881 | )
|                                              |  |                    |            |   |                  
|OTHER INCOME (EXPENSE)                        |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|Interest and other income                     |  |                    | 7,419      |   |                   |   |            |                                                         |  |   | 7,419             |   |  |   |            |   |  |   | 7,442      |  
|Interest expense                              |  |                    | (14,175    | ) |                   |   | (13,123    | )                                                       |  |   | (42,034           | ) |  |   | (38,241    | ) |  |   | (128,222   | )
|                                              |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|Total Other Income (Expense)                  |  |                    | (6,756     | ) |                   |   | (13,123    | )                                                       |  |   | (34,615           | ) |  |   | (38,241    | ) |  |   | (121,280   | )
|                                              |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|NET LOSS                                      |  | $                  | (116,704   | ) |                   | $ | (95,216    | )                                                       |  | $ | (245,569          | ) |  | $ | (1,141,621 | ) |  | $ | (4,710,161 | )
|                                              |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|NET LOSS PER COMMON SHARE (Basic and diluted) |  | $                  | (0.00      | ) |                   | $ | (0.00      | )                                                       |  | $ | (0.01             | ) |  | $ | (0.03      | ) |  | $ | (0.63      | )
|                                              |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  
|WEIGHTED AVERAGE SHARES OUTSTANDING           |  |                    | 42,513,415 |   |                   |   | 34,013,415 |                                                         |  |   | 36,412,489        |   |  |   | 33,639,824 |   |  |   | 7,495,160  |  
|                                              |  |                    |            |   |                   |   |            |                                                         |  |   |                   |   |  |   |            |   |  |   |            |  

See accompanying notes to consolidated financial statements



F-2



---

##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|------------------------------------------------------------------------------ |  | ------------------------------ | -------- | - | ------------------------------------------------------- | - | ---------- | - |  | - | ---------- | -
|                                                                               |  | Nine Months EndedSeptember 30, |          |   | Period March 14, 1994 (Inception) to
September 30, 2006 |  
|                                                                               |  | 2006                           |          |   | 2005                                                    |   |           
|CASH FLOWS FROM OPERATING ACTIVITIES                                           |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Net loss                                                                       |  | $                              | (245,569 | ) |                                                         | $ | (1,141,621 | ) |  | $ | (4,710,161 | )
|Adjustments to reconcile net loss to net cash flows from operating activities: |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Depreciation and amortization                                                  |  |                                | 2,317    |   |                                                         |   | 26,500     |   |  |   | 145,355    |  
|Consulting expense                                                             |  |                                | 25,500   |   |                                                         |   | 627,900    |   |  |   | 2,134,900  |  
|Research and development                                                       |  |                                | 1,200    |   |                                                         |   |            |   |  |   | 10,008     |  
|Start-up costs                                                                 |  |                                |          |   |                                                         |   |            |   |  |   | 19,177     |  
|Amortization of prepaid expenses                                               |  |                                |          |   |                                                         |   |            |   |  |   | 39,913     |  
|Amortization of prepaid compensation                                           |  |                                |          |   |                                                         |   | 256,667    |   |  |   |            |  
|Loss on inventory obsolescence                                                 |  |                                |          |   |                                                         |   |            |   |  |   | 225,110    |  
|Impairment of long lived assets                                                |  |                                |          |   |                                                         |   |            |   |  |   | 251,344    |  
|Impairment of goodwill                                                         |  |                                |          |   |                                                         |   |            |   |  |   | 188,500    |  
|Changes in operating assets and liabilities                                    |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Accounts receivable                                                            |  |                                | 11,728   |   |                                                         |   | (4,399     | ) |  |   | (4,682     | )
|Inventory                                                                      |  |                                | 10,071   |   |                                                         |   | 33,141     |   |  |   | (169,152   | )
|Prepaid expenses                                                               |  |                                |          |   |                                                         |   | 9,313      |   |  |   | (17,712    | )
|Accounts payable                                                               |  |                                | 230      |   |                                                         |   | 71,769     |   |  |   | 243,159    |  
|Accounts payable to related party                                              |  |                                | (15,739  | ) |                                                         |   | 13,840     |   |  |   | 41,369     |  
|Accrued expenses                                                               |  |                                | 84,473   |   |                                                         |   | 89,350     |   |  |   | 275,168    |  
|Customer deposits                                                              |  |                                | 99,480   |   |                                                         |   |            |   |  |   | 99,480     |  
|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Net cash provided by (used in) operating activities                            |  |                                | (26,309  | ) |                                                         |   | (17,540    | ) |  |   | (1,228,224 | )
|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                           |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Purchases of property and equipment                                            |  |                                | (4,280   | ) |                                                         |   |            |   |  |   | (99,086    | )
|Proceeds from sale of equipment                                                |  |                                | 7,419    |   |                                                         |   |            |   |  |   | 7,419      |  
|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Net cash used in investing activities                                          |  |                                | 3,139    |   |                                                         |   |            |   |  |   | (91,667    | )
|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                           |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Bank overdraft                                                                 |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Proceeds from issuance of common stock                                         |  |                                | 45,000   |   |                                                         |   |            |   |  |   | 45,000     |  
|Initial capitalization                                                         |  |                                |          |   |                                                         |   |            |   |  |   | 1,666      |  
|Cash acquired in acquisition                                                   |  |                                |          |   |                                                         |   |            |   |  |   | 200,000    |  
|Notes payable                                                                  |  |                                | (1,624   | ) |                                                         |   | (6,783     | ) |  |   | 150,582    |  
|Convertible promissory notes payable                                           |  |                                |          |   |                                                         |   |            |   |  |   | 548,000    |  
|Notes payable to related party                                                 |  |                                | 14,090   |   |                                                         |   | 10,225     |   |  |   | 408,574    |  
|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|Net cash provided by financing activities                                      |  |                                | 57,466   |   |                                                         |   | 17,008     |   |  |   | 1,353,822  |  
|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|NET INCREASE (DECREASE) IN CASH                                                |  |                                | 34,296   |   |                                                         |   | (532       | ) |  |   | 33,931     |  
|                                                                               |  |                                |         
|CASH (OVERDRAFT), BEGINNING OF YEAR                                            |  |                                | (365     | ) |                                                         |   | 2,810      |   |  |   |            |  
|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  
|CASH, END OF PERIOD                                                            |  | $                              | 33,931   |   |                                                         | $ | 2,278      |   |  | $ | 33,931     |  
|                                                                               |  |                                |          |   |                                                         |   |            |   |  |   |            |  

See accompanying notes to consolidated financial statements



F-3



---

##### Table of Contents

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)

(UNAUDITED)



|                                                                                                                     |  |                                 |        |                                                         |   |         |  |   |          
|-------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | ------------------------------------------------------- | - | ------- |  | - | ---------
|                                                                                                                     |  | Nine Months Ended September 30, |        | Period March 14, 1994 (Inception) to
September 30, 2006
|                                                                                                                     |  | 2006                            |        | 2005                                                    |  
|Supplemental Disclosure of Cash Flow Information:                                                                    |  |                                 |        |                                                         |   |         |  |   |          
|Interest paid                                                                                                        |  | $                               | 42,034 |                                                         | $ | 16,729  |  | $ | 76,573   
|                                                                                                                     |  |                                 |       
|Supplemental Schedule of Non-Cash Investing and Financing Activities:                                                |  |                                 |        |                                                         |   |         |  |   |          
|Needlezap Partnership Contribution of Assets to Company                                                              |  |                                 |        |                                                         |   |         |  |   |          
|Inventory                                                                                                            |  |                                 |        |                                                         |   |         |  |   | 151,015  
|Equipment                                                                                                            |  |                                 |        |                                                         |   |         |  |   | 133,912  
|Patent                                                                                                               |  |                                 |        |                                                         |   |         |  |   | 189,089  
|Issuance of common stock for consulting services and compensation                                                    |  |                                 | 25,500 |                                                         |   | 627,900 |  |   | 2,281,567
|Loss on inventory obsolescence                                                                                       |  |                                 |        |                                                         |   |         |  |   | 225,110  
|Impairment of long lived assets                                                                                      |  |                                 |        |                                                         |   |         |  |   | 251,344  
|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                                                                          |  |                                 | 70,000 |                                                         |   |         |  |   | 336,484  
|Issuance of common stock in payment of accounts payable                                                              |  |                                 | 12,000 |                                                         |   |         |  |   | 12,000   
|Issuance of common stock in payment of accrued wages                                                                 |  |                                 | 70,000 |                                                         |   |         |  |   | 70,000   

See accompanying notes to consolidated financial statements



F-4



---

##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE A - 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 nine months ended
September 30, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006. 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, 2005.

NOTE B -
GOING CONCERN

As indicated in the accompanying financial statements, the Company incurred a net loss of $245,569 for the nine months ended
September 30, 2006, and has a negative working capital of $660,671 and Stockholders Deficit of $1,191,011 at September 30, 2006, and is considered a company in the development stage. Managements plans include the raising of
capital through short- term financing to fund future operations and the generating of revenue through its business. Failure to raise capital, keep its products and manufacturing facilities in FDA compliance, and generate sales revenues could result
in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate revenues, there can be no assurances that the revenue will be sufficient to enable
it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Companys ability to continue as a going concern. However, the accompanying financial statements
have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the
recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE C - CONCENTRATION

Approximately 65% of the Companys sales for the nine months ended
September 30, 2006 were with one customer.

NOTE D - ISSUANCE OF COMMON STOCK

On June 15, 2006, the Company issued 3,500,000 shares of its common stock to each of Ronald L. Alexander, a director of the Company, and Donald
Sullivan, the Chief Financial Officer and Interim Chief Executive Officer and a director of the Company. All shares were issued at a price of $0.02 a share. The shares issued to Mr. Alexander were issued as consideration for amounts advanced by
Mr. Alexander to the Company. The shares issued to Mr. Sullivan were issued as consideration for accrued, unpaid salary.



F-5



---

##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE D - ISSUANCE OF COMMON STOCK (Continued)

During the nine months ended September 30, 2006, the
Company issued 400,000 shares at $0.03 a share to settle accounts payable. Additionally, the Company issued a total of 850,000 shares at $0.03 a share for services performed. As such, $25,500 in expense has been recorded within the Selling, general
and administrative expenses within the Statement of Operations.

During the nine months ended September 30, 2006, the Company received
$45,000 in exchange for 1,500,000 shares of common stock.

NOTE E  CONVERTIBLE PROMISSORY NOTE PAYABLE

The Company is in default of the convertible promissory note of $548,000. The note holder has filed an action against the Company seeking the
appointment of a receiver and the repayment of the note. The initial claim to appoint a receiver was declined by the court. The Company is in the process of working with the note holder to arrive at a mutually agreeable settlement. Failure to settle
this claim may have a significant negative impact on the Companys financial positions and results of operations.



F-6