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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, 2005



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



Commission file number: 33-55254-36



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E Med Future, Inc.

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



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



794 Morrison Road,
Suite 911, Columbus, OH 43230

(Address of principal executive offices)



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



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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date:
34,013,415 shares of common stock, $0.001 par value per share, as of August 1, 2005



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



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TABLE OF CONTENTS



|                                                                    |  |    
|------------------------------------------------------------------- |  | ---
|PART I 
FINANCIAL INFORMATION                                      |  | 1  
|Item 1.
Financial Statements                                        |  | 1  
|Item 2.
Managements Discussion and Analysis                        |  | 1  
|Our Products                                                        |  | 1  
|Recent Events                                                       |  | 2  
|Looking Ahead                                                       |  | 2  
|Our History                                                         |  | 2  
|Results of Operations                                               |  | 3  
|Second Quarter of 2005 Compared to 2004                             |  | 3  
|Net Sales                                                           |  | 3  
|Costs and Expenses                                                  |  | 3  
|Net Loss                                                            |  | 4  
|First Six Months of 2005 Compared to 2004                           |  | 4  
|Net Sales                                                           |  | 4  
|Costs and Expenses                                                  |  | 4  
|Net Loss                                                            |  | 4  
|Financial Condition and Liquidity                                   |  | 4  
|Off-Balance Sheet Arrangements                                      |  | 5  
|Forward Looking Statements                                          |  | 5  
|How to Learn More About E Med                                       |  | 6  
|Item 3.
Controls and Procedures                                     |  | 6  
|PART II 
OTHER INFORMATION                                         |  | 7  
|Item 1.
Legal Proceedings                                           |  | 7  
|Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds |  | 7  
|Item 3.
Defaults Upon Senior Securities                             |  | 7  
|Item 4.
Submission of Matters to a Vote of Security Holders         |  | 7  
|Item 5.
Other Information                                           |  | 7  
|Item 6.
Exhibits                                                    |  | 7  
|SIGNATURES                                                          |  | 8  
|June 30, 2005 Financial Statements                                  |  | F-1



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PART I  FINANCIAL INFORMATION



Item 1. Financial Statements



Our June 30, 2005
unaudited consolidated financial statements follow this quarterly report beginning on page F-1.



Item 2. Managements Discussion and Analysis



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



Our Products



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



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



The dental parking station is intended to provide a safer, temporary resting place for a hypodermic syringe. During a procedure, dentists often reuse a hypodermic needle
on the same patient when additional anesthesia is required. Since the needle is not destroyed immediately after the initial use, dentists generally recap the needle or leave the needle exposed, increasing the risk of an accidental needlestick
injury. The NeedleZap® unit 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.



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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 channel we are building. However, we are not presently
pursuing the sharps receptacle as management believes resources should be conserved for marketing the currently approved product.



Recent Events



On July 21, 2005, Robert J.
Ochsendorf and John J. Perez stepped down from our board of directors to focus on other business interests. Ronald L. Alexander and Donald Sullivan were immediately appointed to fill the vacancies in the board resulting from the departure of Messrs.
Ochsendorf and Perez. Mr. Alexander was an original investor in E Med when the company was founded in 2000. He currently owns and operates several businesses, including funeral homes and a hospital bed sale and rental company. Mr. Sullivan has
served as our CFO since November 2004.



Looking Ahead



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



Our History



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



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



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



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



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



Results of Operations



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



Second Quarter of 2005 Compared to 2004



Net Sales



We had net sales of $6,610 in the
quarter ended June 30, 2005, compared with $60,154 for the same period in 2004, a decrease of $53,544 or 89.0%. This decrease is primarily attributable to decreased domestic and international sales due to our new marketing program for domestic sales
not being fully implemented in the second quarter and delays in shipping international orders due to our requiring payment in advance of shipment.



Costs and Expenses



Operating costs and expenses
decreased $22,756, or 10.9%, to $185,742 in the second quarter of 2005 from $208,498 in 2004. As a percentage of net sales, cost of goods sold decreased to 38.4% in 2005 from 207.8% in 2004 due to decreased manufacturing and FDA compliance costs in
2005.



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Other expenses decreased $7,054, or 35.7%, to $12,688 in 2005 from $19,742 in 2004, due to a decrease in interest expense
resulting from lower balances outstanding on our interest bearing debt in 2005.



Net Loss



In the second quarter of 2005, our net
loss increased to $191,820, or $0.01 a share, from a net loss of $168,086 in 2004 as a result of decreased sales only partially offset by lower costs.



First Six Months of 2005 Compared to 2004



Net Sales



We had net sales of $19,530 in the
six months ended June 30, 2005, compared with $189,180 for the same period in 2004, a decrease of $169,650 or 89.7%. This decrease is attributable our new marketing program not being fully implemented in 2005. To date sales have been positive for
the third quarter.



Costs and Expenses



Operating costs and expenses
increased $576,657, or 124.6%, in the first six months of 2005 to $1,039,316 from $462,659 in 2004. The first six months of 2005 were impacted by $627,900 of stock based compensation that was not present in 2004. During January 2005, we issued
4,830,000 shares of common stock for consulting services. Stock based compensation was recorded in the amount of $0.39 per share, or $1,883,700 in total, for these services. In July 2005, we hired a qualified valuation consultant to perform a
valuation of the Company stock. Pursuant to this valuation, the shares of stock were revalued at $0.13 per share and the stock based compensation charge was reduced to $627,900. As a percentage of net sales, cost of goods sold decreased to 87.0% in
2005 from 106.1% in 2004 due to decreased manufacturing and FDA compliance related costs in 2005.



Other expenses increased $3,638, or 16.9%, to $25,118 in 2005 from $21,480 in 2004 due to an increase in interest expense resulting from higher balances outstanding on our interest bearing debt in 2005.



Net Loss



In the first half of 2005, our net
loss increased to $1,044,904, or $0.03 a share, from a net loss of $294,959 in 2004 as a result of an increase in stock based compensation expense in 2005 and decreased sales without a corresponding decrease in operating costs.



Financial Condition and Liquidity



We had no
available cash on June 30, 2005, compared to $2,810 at the end of the second quarter of 2004. Cash used in operations decreased 85.2% to $26,660 in the second quarter of 2005 from $312,964 in 2004, primarily caused by an increase in accounts payable
and accrued expenses in 2005 and reductions in accounts receivable and inventory.



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



On April 1, 2004, we entered into a loan agreement with a private investor in the amount of
$750,000. The convertible promissory note bears interest at 7.5% payable quarterly with the principal due in five years and is secured by all of our assets. The note is convertible at the holders option into 1.5 million shares of our
unregistered common stock, subject to adjustment for dilutive issuances. In connection with the loan, we also agreed to pay the lender a $3.00 royalty on each of the next 1.0 million NeedleZap® units sold, with maximum total royalty payments of
$5.0 million. The loan agreement was amended effective December 31, 2004 to reduce the loan amount to $548,000. Payment of interest and royalties was deferred until January 1, 2006, provided we provide monthly sales reports to the lender when due.
In addition, if we arrange an increase in bank financing, the lender agreed to subordinate its security interests to the secured interests of the banking institution up to a maximum of $500,000.



Our primary need for capital is to fund operations and the development of new products.
Historically, our capital requirements have been met by a combination of loans from stockholders and other investors, our line of credit with Key Bank, and funds from operations. Now that our distributors have had sufficient ramp-up time, we expect
increased sales to meet our capital needs. In addition, we are developing new NeedleZap® products to help generate additional revenues. However, sales may not be adequate to meet our cash needs, which would negatively impact our operations and
development of new and ancillary products.



Off-Balance Sheet Arrangements



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



Forward Looking Statements



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



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



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



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



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



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



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



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



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



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



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



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



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



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



How to Learn More About E Med



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



E Med Future, Inc.

794 Morrison Road

Suite 911

Columbus, Ohio 43230

Phone: 877- 855-1319

Email: info@NeedleZap.com



Item 3. Controls and Procedures



D. Dane
Donohue, our president and chief executive officer, and Donald Sullivan, our chief financial officer, have reviewed E Meds disclosure controls and procedures as of June 30, 2005. Based upon their review, they believe that our disclosure
controls and procedures are effective in ensuring that material information related to E Med is communicated to them by others within the company responsible for reporting this information.



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PART II  OTHER INFORMATION



Item 1. Legal Proceedings



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



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



Not applicable.



Item 3. Defaults Upon Senior Securities



Not
applicable.



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



Not applicable.



Item 5. Other Information



Not applicable.



Item 6. Exhibits



|     |  |                                                                                                 
|---- |  | ------------------------------------------------------------------------------------------------
|31.1 |  | CEOs Rule 13a-14(a)/15d-14(a) Certification Pursuant to § 302 of the Sarbanes-Oxley Act of 2002
|     | 
|31.2 |  | CFOs Rule 13a-14(a)/15d-14(a) Certification Pursuant to § 302 of the Sarbanes-Oxley Act of 2002
|     | 
|32   |  | Rule 13a-14(b)/15d-14(b) Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002      



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SIGNATURES



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



|                      |  |                                            
|--------------------- |  | -------------------------------------------
|                      |  | E MED FUTURE, INC.                         
|                      | 
|Date: August 15, 2005 |  | /s/ Donald Sullivan                        
|                      |  | By Donald Sullivan, Chief Financial Officer



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E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                                                                                                                                    |  | June 30, 2005 |            |   | December 31,2004 |  
|                                                                                                                                                                    |  | (Unaudited)   |            |   |                  |  
|ASSETS                                                                                                                                                              |  |               |            |   |                  |   |            |  
|CURRENT ASSETS                                                                                                                                                      |  |               |            |   |                  |   |            |  
|Cash                                                                                                                                                                |  |               |            |   |                  | $ | 2,810      |  
|Accounts receivable, net of allowance for doubtful account of $64,744 and $67,744, respectively                                                                     |  | $             | 6,760      |   |                  |   | 2,511      |  
|Inventory                                                                                                                                                           |  |               | 486,622    |   |                  |   | 488,153    |  
|Prepaid expenses                                                                                                                                                    |  |               | 8,400      |   |                  |   | 17,713     |  
|Current portion of prepaid compensation                                                                                                                             |  |               | 440,000    |   |                  |   | 440,000    |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Current Assets                                                                                                                                                |  |               | 941,782    |   |                  |   | 951,187    |  
|                                                                                                                                                                    |  |              
|PREPAID CONSULTING COMPENSATION                                                                                                                                     |  |               | 91,667     |   |                  |   | 311,667    |  
|EQUIPMENT, net of depreciation of $72,363 and $60,932, respectively                                                                                                 |  |               | 156,356    |   |                  |   | 167,787    |  
|PATENTS AND LICENSES                                                                                                                                                |  |               |            |   |                  |   |            |  
|Patents, net of amortization $53,008 and $46,772, respectively                                                                                                      |  |               | 134,080    |   |                  |   | 140,316    |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Assets                                                                                                                                                        |  | $             | 1,323,885  |   |                  | $ | 1,570,957  |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                |  |               |            |   |                  |   |            |  
|                                                                                                                                                                    |  |              
|CURRENT LIABILITIES                                                                                                                                                 |  |               |            |   |                  |   |            |  
|Bank overdraft                                                                                                                                                      |  | $             | 2,417      |   |                  |   |            |  
|Notes payable to bank                                                                                                                                               |  |               | 149,098    |   |                  | $ | 141,098    |  
|Current portion of long-term debt                                                                                                                                   |  |               | 1,828      |   |                  |   | 1,828      |  
|Notes payable to related parties                                                                                                                                    |  |               | 39,025     |   |                  |   | 25,000     |  
|Accounts payable                                                                                                                                                    |  |               | 272,250    |   |                  |   | 206,611    |  
|Accounts payable to related party                                                                                                                                   |  |               | 37,198     |   |                  |   | 25,376     |  
|Accrued expenses                                                                                                                                                    |  |               | 124,144    |   |                  |   | 55,523     |  
|Customer deposits                                                                                                                                                   |  |               | 100,000    |   |                  |   | 100,000    |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Current Liabilities                                                                                                                                           |  |               | 725,960    |   |                  |   | 555,436    |  
|                                                                                                                                                                    |  |              
|LONG-TERM DEBT                                                                                                                                                      |  |               |            |   |                  |   |            |  
|Convertible promissory note payable                                                                                                                                 |  |               | 548,000    |   |                  |   | 548,000    |  
|Note payable, less current portion                                                                                                                                  |  |               | 2,108      |   |                  |   | 2,700      |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Long-Term Debt                                                                                                                                                |  |               | 550,108    |   |                  |   | 550,700    |  
|                                                                                                                                                                    |  |              
|STOCKHOLDERS EQUITY                                                                                                                                                |  |               |            |   |                  |   |            |  
|Common stock, $0.001 par value, 50,000,000 shares authorized, 34,013,415 and 29,183,415 issued and outstanding at June 30, 2005 and December
31, 2004, respectively |  |               | 34,013     |   |                  |   | 29,183     |  
|Paid-in-capital                                                                                                                                                     |  |               | 3,425,137  |   |                  |   | 2,802,067  |  
|Deficit accumulated during development stage                                                                                                                        |  |               | (3,411,333 | ) |                  |   | (2,366,429 | )
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Stockholders Equity                                                                                                                                          |  |               | 47,817     |   |                  |   | 464,821    |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  
|Total Liabilities and Stockholders Equity                                                                                                                          |  | $             | 1,323,885  |   |                  | $ | 1,570,957  |  
|                                                                                                                                                                    |  |               |            |   |                  |   |            |  



See accompanying notes
to consolidated financial statements.



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E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



CONSOLIDATED STATEMENTS OF OPERATIONS



|                                           |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|------------------------------------------ |  | ------------------------------- | ---------- | - | ------------------------------- | - | ---------- | ----------------------------- |  | - | ----------------------------- | - |  | ------------------------------------------------ | ---------- | - |  | - | ---------- | -
|                                           |  | Three MonthsEnded June 30, 2005 |            |   | Three MonthsEnded June 30, 2004 |   |            | Six MonthsEnded June 30, 2005 |  |   | Six MonthsEnded June 30, 2004 |   |  | Period March 14, 1990(Inception) toJune 30, 2005 |           
|NET SALES                                  |  | $                               | 6,610      |   |                                 | $ | 60,154     |                               |  | $ | 19,530                        |   |  | $                                                | 189,180    |   |  | $ | 819,522    |  
|                                           |  |                                 |            |   |                                
|COSTS AND EXPENSES-                        |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|Cost of goods sold                         |  |                                 | 2,541      |   |                                 |   | 124,991    |                               |  |   | 16,998                        |   |  |                                                  | 200,720    |   |  |   | 558,228    |  
|Selling, general and administrative        |  |                                 | 174,367    |   |                                 |   | 75,837     |                               |  |   | 376,401                       |   |  |                                                  | 246,601    |   |  |   | 1,770,113  |  
|Research and development                   |  |                                 |            |   |                                 |   |            |                               |  |   | 350                           |   |  |                                                  |            |   |  |   | 9,783      |  
|Stock based compensation                   |  |                                 |            |   |                                 |   |            |                               |  |   | 627,900                       |   |  |                                                  |            |   |  |   | 1,520,233  |  
|Impairment of goodwill                     |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   | 188,500    |  
|Depreciation and amortization              |  |                                 | 8,834      |   |                                 |   | 7,670      |                               |  |   | 17,667                        |   |  |                                                  | 15,338     |   |  |   | 125,372    |  
|                                           |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|Total Costs and Expenses                   |  |                                 | 185,742    |   |                                 |   | 208,498    |                               |  |   | 1,039,316                     |   |  |                                                  | 462,659    |   |  |   | 4,172,229  |  
|                                           |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|NET OPERATING LOSS                         |  |                                 | (179,132   | ) |                                 |   | (148,344   | )                             |  |   | (1,019,786                    | ) |  |                                                  | (273,479   | ) |  |   | (3,352,707 | )
|                                           |  |                                 |            |   |                                
|OTHER INCOME (EXPENSE)                     |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|Interest and other income                  |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   | 23         |  
|Interest expense                           |  |                                 | (12,688    | ) |                                 |   | (19,742    | )                             |  |   | (25,118                       | ) |  |                                                  | (21,480    | ) |  |   | (58,649    | )
|                                           |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|Total Other Expenses                       |  |                                 | (12,688    | ) |                                 |   | (19,742    | )                             |  |   | (25,118                       | ) |  |                                                  | (21,480    | ) |  |   | (58,626    | )
|                                           |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|NET LOSS                                   |  | $                               | (191,820   | ) |                                 | $ | (168,086   | )                             |  | $ | (1,044,904                    | ) |  | $                                                | (294,959   | ) |  | $ | (3,411,333 | )
|                                           |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|NET LOSS PER COMMON SHARE -                |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|(Basic and diluted)                        |  | $                               | (0.01      | ) |                                 | $ | (0.01      | )                             |  | $ | (0.03                         | ) |  | $                                                | (0.01      | ) |  | $ | (0.66      | )
|                                           |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |  |                                 | 34,013,415 |   |                                 |   | 26,134,000 |                               |  |   | 33,639,824                    |   |  |                                                  | 26,134,000 |   |  |   | 5,199,760  |  
|                                           |  |                                 |            |   |                                 |   |            |                               |  |   |                               |   |  |                                                  |            |   |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-2



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##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|------------------------------------------------------------------------ |  | ------------------------- | ---------- | - | ------------------------------------------------- | - | -------- | - |  | - | ---------- | -
|                                                                         |  | Six Months Ended June 30, |            |   | Period March 14, 1990(Inception) to June 30, 2005 |  
|                                                                         |  | 2005                      |            |   | 2004                                              |   |         
|CASH FLOWS FROM OPERATING ACTIVITIES                                     |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|Net loss                                                                 |  | $                         | (1,044,904 | ) |                                                   | $ | (294,959 | ) |  | $ | (3,411,333 | )
|Adjustments to reconcile net loss to net cash from operating activities: |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|Depreciation and amortization                                            |  |                           | 17,667     |   |                                                   |   | 15,338   |   |  |   | 125,372    |  
|Stock based compensation                                                 |  |                           | 627,900    |   |                                                   |   |          |   |  |   | 1,520,233  |  
|Research and development costs                                           |  |                           |            |   |                                                   |   |          |   |  |   | 8,808      |  
|Start-up costs                                                           |  |                           |            |   |                                                   |   |          |   |  |   | 19,177     |  
|Amortization of prepaid expense                                          |  |                           |            |   |                                                   |   | 14,025   |   |  |   | 30,600     |  
|Amortization of prepaid compensation                                     |  |                           | 220,000    |   |                                                   |   |          |   |  |   | 220,000    |  
|Impairment of goodwill                                                   |  |                           |            |   |                                                   |   |          |   |  |   | 188,500    |  
|Changes in operating assets and liabilities:                             |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|Accounts receivable                                                      |  |                           | (4,249     | ) |                                                   |   | (66,324  | ) |  |   | (6,760     | )
|Inventory                                                                |  |                           | 1,531      |   |                                                   |   | (1,102   | ) |  |   | (335,607   | )
|Prepaid expenses                                                         |  |                           | 9,313      |   |                                                   |   | (4,074   | ) |  |   | (8,400     | )
|Accounts payable                                                         |  |                           | 65,639     |   |                                                   |   | (7,253   | ) |  |   | 272,250    |  
|Accounts payable to related party                                        |  |                           | 11,822     |   |                                                   |   | (57,447  | ) |  |   | 37,198     |  
|Accrued expenses                                                         |  |                           | 68,621     |   |                                                   |   | 88,832   |   |  |   | 124,144    |  
|Customer deposits                                                        |  |                           |            |   |                                                   |   |          |   |  |   | 100,000    |  
|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|Net Cash Used in Operating Activities                                    |  |                           | (26,660    | ) |                                                   |   | (312,964 | ) |  |   | (1,115,818 | )
|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                     |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|Purchases of property and equipment                                      |  |                           |            |   |                                                   |   | (12,839  | ) |  |   | (94,806    | )
|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|Net Cash Used in Investing Activities                                    |  |                           |            |   |                                                   |   | (12,839  | ) |  |   | (94,806    | )
|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                     |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|Bank overdraft                                                           |  |                           | 2,417      |   |                                                   |   |          |   |  |   | 2,417      |  
|Initial capitalization                                                   |  |                           |            |   |                                                   |   |          |   |  |   | 1,666      |  
|Cash acquired in acquisition                                             |  |                           |            |   |                                                   |   |          |   |  |   | 200,000    |  
|Notes payable to bank                                                    |  |                           | 8,000      |   |                                                   |   |          |   |  |   | 149,098    |  
|Notes payable                                                            |  |                           | (592       | ) |                                                   |   | 5,115    |   |  |   | 3,936      |  
|Convertible promissory note payable                                      |  |                           |            |   |                                                   |   | 175,000  |   |  |   | 548,000    |  
|Notes payable to related party                                           |  |                           | 14,025     |   |                                                   |   | (54,101  | ) |  |   | 305,507    |  
|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|Net Cash Provided by Financing Activities                                |  |                           | 23,850     |   |                                                   |   | 126,014  |   |  |   | 1,210,624  |  
|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|NET DECREASE IN CASH                                                     |  |                           | (2,810     | ) |                                                   |   | (199,789 | ) |  |   |            |  
|                                                                         |  |                           |           
|CASH BEGINNING OF YEAR                                                   |  |                           | 2,810      |   |                                                   |   | 204,443  |   |  |   |            |  
|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  
|CASH END OF PERIOD                                                       |  |                           |            |   |                                                   | $ | 4,654    |   |  |   |            |  
|                                                                         |  |                           |            |   |                                                   |   |          |   |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-3



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##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)



|                                                                                                                     |  |                           |         |                                                  |   |         |  |   |          
|-------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ------- | ------------------------------------------------ | - | ------- |  | - | ---------
|                                                                                                                     |  | Six Months Ended June 30, |         | PeriodMarch 14, 1990(Inception) to June 30, 2005
|                                                                                                                     |  | 2005                      |         | 2004                                             |  
|Supplemental Disclosure of Cash Flows Information:                                                                   |  |                           |         |                                                  |   |         |  |   |          
|Interest paid                                                                                                        |  | $                         | 13,881  |                                                  | $ | 1,811   |  | $ | 37,663   
|                                                                                                                     |  |                           |        
|Supplemental Schedule of Non-Cash Operating and                                                                      |  |                           |         |                                                  |   |         |  |   |          
|Financing Activities:                                                                                                |  |                           |         |                                                  |   |         |  |   |          
|NeedleZap Partnership Contribution of Assets to Company                                                              |  |                           |         |                                                  |   |         |  |   |          
|Inventory                                                                                                            |  |                           |         |                                                  |   |         |  | $ | 151,015  
|Equipment                                                                                                            |  |                           |         |                                                  |   |         |  |   | 133,912  
|Patent                                                                                                               |  |                           |         |                                                  |   |         |  |   | 187,089  
|Issuance of common stock for consulting services                                                                     |  | $                         | 627,900 |                                                  |   |         |  |   | 1,520,233
|Issuance of 1,250,000 shares valued at $0.3108 per share to acquire MSTI and allocation of purchase price to license |  |                           |         |                                                  |   |         |  |   | 188,500  
|Issuance of common stock in payment of loan                                                                          |  |                           |         |                                                  |   |         |  |   | 266,484  
|Issuance of convertible debentures to acquire inventory                                                              |  |                           |         |                                                  | $ | 375,000 |  |   | 375,000  



See accompanying notes
to consolidated financial statements.



F-4



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##### Table of Contents

E MED FUTURE, INC.

Formerly Micro-Economics, Inc.

(A Development Stage Company)



NOTES TO 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 six months ended June 30, 2005 are
not necessarily indicative of the results that may be expected for the year ending December 31, 2005. For further information, refer to the financial statements and footnotes thereto included in the E Med Future, Inc., formerly Micro-Economics,
Inc., annual report on Form 10-KSB for the year ended December 31, 2004.



NOTE
2 - ISSUANCE OF COMMON STOCK



During January 2005, the
Company issued 4,830,000 shares of common stock, pursuant to Form S-8 at a value of $0.39 per share for consulting services. Stock based compensation was recorded in the amount of $1,883,700 for these services. In July 2005, the Company hired a
qualified valuation consultant to perform a valuation of the company stock. Pursuant to this valuation, the shares of stock were revalued at $0.13 per share and the stock based compensation has been adjusted to $627,900.



NOTE 3 - GOING CONCERN



As indicated in the accompanying financial statements, the Company had net operating losses of $4,667,133 since inception
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 4 - SUBSEQUENT EVENT



In July 2005, the Company terminated its license and distribution agreement,
entered into September 2004, with ITD Development Solutions, Inc. (ITD), whereby the Company had granted ITD the exclusive right to manufacture, distribute and sell the NeedleZap unit in Pakistan and the United Arab Emirates. In connection with this
agreement the Company entered into a two year consulting agreement with ITD president Patrick Downs for 2,000,000 shares of the Companys common stock valued at $880,000. At June 30, 2005, the unamortized balance is $531,667. The Company is
attempting to recover shares of its common stock representing the unamortized balance.



F-5