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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB/A

Amendment No. 1



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(Mark One)

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



For the quarterly period ended September 30, 2004



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



Commission file number: 33-55254-36



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E Med Future, Inc.

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



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



794 Morrison Road,
Suite 911, Columbus, Ohio 43230

(Address of principal executive offices)



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



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



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



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



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EXPLANATION OF AMENDMENT



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



During the second quarter of 2004 we recognized revenues of $379,720 from a purchase order
placed by our former distributor, TransGlobal Medical Sales & Services, LLC. TransGlobal never paid for the order and we have reversed the sale. During the third quarter of 2004 we recognized revenues of $312,500 from an order placed by our
Pennsylvania distributor. The distributor did not take delivery of the units and we have reversed the sale. Due to these reversals, our next sales for the nine months ended September 30, 2004, were decreased by $692,220 and accounts receivable were
reduced by a corresponding amount. Costs of good sold of $180,194 corresponding to the TransGlobal order were also recorded during the second quarter of 2004 and have been reversed and added back into inventory. Costs of goods sold of $120,800
corresponding to the Pennsylvania distributors order were recorded in the third quarter and have been reversed and added back into inventory. As a result of these reversals, costs of goods sold were decreased $300,994 for the nine months ended
September 30, 2004.



During the second and third quarters of 2004 one of our
lenders made payments of $575,000 on our behalf directly to our primary vendor, PR Market Research Company, which is owned by our director of research. These payments were recorded as an increase in inventory with a corresponding increase in our
convertible promissory note payable to the lender. These payments were not authorized by our board and we subsequently amended our loan agreement with the lender to reduce the loan amount. Our September 30, 2004 balance sheet has been restated to
reduce inventory by $575,000 and the promissory note by $575,000. For more information relating to the loan amendment, please see the Financial Condition and Liquidity section of our December 31, 2004 Form 10-KSB.



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



1



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PART I  FINANCIAL INFORMATION



Item 1. Financial Statements



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



Item 2. Managements Discussion and Analysis



Results of Operations



Third Quarter of 2004 Compared to 2003



Net Sales



We had net sales of $9,690 in the quarter ended September 30, 2004, compared with $96,094 for the same period in 2003, a decrease of $86,404 or 89.9%. The decrease is primarily attributable to expected repeat sales
not being realized in 2004 because our distributors who placed initial stocking orders in 2003 required more time to gain approvals and develop sales in their markets during 2004 than anticipated. Our global distributors continue to work to obtain
all necessary approvals to sell our products in their markets. In 2004 we did not add any new distributors and instead focused our marketing efforts on several large potential customers.



Costs and Expenses



Operating costs and expenses increased $16,159, or 11.1%, to $162,342 in the third quarter of 2004 from $146,183 in 2003. As a percentage of net sales, cost of goods sold
increased to 1,675.4% in 2004 from 56.6% in 2003 due to an increase in the cost of goods sold primarily attributable to a voluntary recall and replacement of NeedleZap® units sold prior to FDA approval. Other expenses increased to $5,226 in 2004 from none in 2003, due to an increase in
interest expense resulting from higher balances outstanding on our interest bearing debt in 2004.



Net Loss



In the third quarter of 2004,
we had a net loss of $152,652, compared to a loss of $50,089 in 2003 as a result of higher expenses combined with reduced sales.



First Nine Months of 2004 Compared to 2003



Net Sales



We had net sales of $198,970 in the nine months ended September 30, 2004, compared with $343,623 for the same period in 2003, a decrease of $144,653 or 42.1%. This decrease is attributable to the failure of our
distributors to generate sales of our products in the second and third quarters of 2004.



Costs and Expenses



Operating costs and
expenses decreased $327,051, or 34.4%, to $625,001 in the first nine months of 2004 from $952,052 in 2003. 2003 was impacted by $600,000 in stock based compensation, while 2004 expenses included only $18,333 of stock based compensation. The decrease
in stock



2



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based compensation in 2004 was partially offset by increases in the cost of goods sold and selling, general and administrative expenses due to costs related
to the voluntary product recall and higher distributor and promotional costs. As a percentage of next sales, cost of goods sold increased to 135.7% in 2004 from 35.6% in 2003. Other expenses increased to $26,706 in 2004 from none in 2003, due to an
increase in interest expense resulting from higher balances outstanding on our interest bearing debt in 2004.



Net Loss



In the first nine months of
2004, our net loss decreased to $452,837 from a net loss of $608,429 in 2003 as a result of expense reductions exceeding decreased sales.



Item 6. Exhibits and Reports on Form 8-K



(a) Exhibits



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



3



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SIGNATURES



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



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



4



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E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED BALANCE SHEET (UNAUDITED)

September 30, 2004



|                                                                                                                     |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------- |  | - | ---------- | -
|ASSETS                                                                                                               |  |   |            |  
|CURRENT ASSETS                                                                                                       |  |   |            |  
|Cash                                                                                                                 |  | $ | 2,978      |  
|Accounts receivable, net of allowance for doubtful accounts of $84,303                                               |  |   | 149,652    |  
|Inventory                                                                                                            |  |   | 434,170    |  
|Prepaid expenses                                                                                                     |  |   | 8,475      |  
|Prepaid consulting                                                                                                   |  |   | 440,000    |  
|                                                                                                                     |  |   |            |  
|Total Current Assets                                                                                                 |  |   | 1,035,275  |  
|                                                                                                                     | 
|PREPAID CONSULTING, net of current portion                                                                           |  |   | 421,667    |  
|EQUIPMENT, net of depreciation                                                                                       |  |   | 170,872    |  
|PATENTS AND LICENSES                                                                                                 |  |   |            |  
|Patents, net of amortization $52,462                                                                                 |  |   | 331,934    |  
|                                                                                                                     |  |   |            |  
|                                                                                                                     |  |   | $1,959,748 |  
|                                                                                                                     |  |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                 |  |   |            |  
|CURRENT LIABILITIES                                                                                                  |  |   |            |  
|Notes payable to bank                                                                                                |  | $ | 141,098    |  
|Current portion of long-term debt                                                                                    |  |   | 1,828      |  
|Accounts payable                                                                                                     |  |   | 438,396    |  
|Accounts payable to related party                                                                                    |  |   | 19,877     |  
|Accrued expenses                                                                                                     |  |   | 178,041    |  
|                                                                                                                     |  |   |            |  
|Total Current Liabilities                                                                                            |  |   | 779,240    |  
|                                                                                                                     | 
|LONG-TERM DEBT                                                                                                       |  |   |            |  
|Notes payable to finance company                                                                                     |  |   | 2,868      |  
|Convertible promissory note                                                                                          |  |   | 175,000    |  
|Notes payable to related parties                                                                                     |  |   | 32,100     |  
|                                                                                                                     | 
|STOCKHOLDERS EQUITY                                                                                                 |  |   |            |  
|Common stock $0.001 par value, 50,000,000 shares authorized, 28,883,415 issued and outstanding at September 30, 2004 |  |   | 28,883     |  
|Paid-in-capital                                                                                                      |  |   | 2,643,367  |  
|Deficit accumulated during development stage                                                                         |  |   | (1,701,710 | )
|                                                                                                                     |  |   |            |  
|                                                                                                                     |  |   | 970,540    |  
|                                                                                                                     |  |   |            |  
|                                                                                                                     |  | $ | 1,959,748  |  
|                                                                                                                     |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-1



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E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)



|                                              |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|--------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------- | - | ---------- | --------------------------------------------------------- |  | - | ---------- | - |  | ---- | ---------- | - |  | - | ---------- | -
|                                              |  | Three Months EndedSeptember 30, |            |   | Nine Months Ended September 30, |   |            | For the Period March 14, 1990(Inception) to September
30, | 
|                                              |  | 2004                            |            |   | 2003                            |   |            | 2004                                                      |  |   | 2003       |   |  | 2004 |           
|NET SALES                                     |  | $                               | 9,690      |   |                                 | $ | 96,094     |                                                           |  | $ | 198,870    |   |  | $    | 343,623    |   |  | $ | 880,355    |  
|                                              |  |                                 |            |   |                                
|COSTS AND EXPENSES-                           |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|Cost of goods sold                            |  |                                 | 67,250     |   |                                 |   | 54,346     |                                                           |  |   | 267,970    |   |  |      | 122,215    |   |  |   | 633,827    |  
|Selling, general and administrative           |  |                                 | 85,822     |   |                                 |   | 84,507     |                                                           |  |   | 332,423    |   |  |      | 208,153    |   |  |   | 1,130,672  |  
|Research and development                      |  |                                 | 550        |   |                                 |   |            |                                                           |  |   | 550        |   |  |      |            |   |  |   | 9,433      |  
|Stock based compensation                      |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      | 600,000    |   |  |   | 605,000    |  
|Depreciation and amortization                 |  |                                 | 8,720      |   |                                 |   | 7,330      |                                                           |  |   | 24,058     |   |  |      | 21,684     |   |  |   | 98,942     |  
|                                              |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|Total Costs and Expenses                      |  |                                 | 162,342    |   |                                 |   | 146,183    |                                                           |  |   | 625,001    |   |  |      | 952,052    |   |  |   | 2,477,874  |  
|                                              |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|NET OPERATING (LOSS)                          |  |                                 | (152,652   | ) |                                 |   | (50,089    | )                                                         |  |   | (426,131   | ) |  |      | (608,429   | ) |  |   | (1,597,519 | )
|                                              |  |                                 |            |   |                                
|OTHER INCOME (EXPENSE)                        |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|Interest and other income                     |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   | 23         |  
|Interest expense                              |  |                                 | (5,226     | ) |                                 |   |            |                                                           |  |   | (26,706    | ) |  |      |            |   |  |   | (35,019    | )
|                                              |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|Total Other Expenses                          |  |                                 | (5,226     | ) |                                 |   |            |                                                           |  |   | (26,706    | ) |  |      |            |   |  |   | (34,996    | )
|                                              |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|NET INCOME (LOSS)                             |  | $                               | (157,878   | ) |                                 | $ | (50,089    | )                                                         |  | $ | (452,837   | ) |  | $    | (608,429   | ) |  | $ | (1,632,515 | )
|                                              |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|NET LOSS PER COMMON SHARE (Basic and diluted) |  | $                               | (.01       | ) |                                 | $ |            |                                                           |  | $ | (.02       | ) |  | $    | (.03       | ) |  | $ | (.44       | )
|                                              |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING    |  |                                 | 27,209,502 |   |                                 |   | 24,884,000 |                                                           |  |   | 26,389,295 |   |  |      | 23,559,670 |   |  |   | 3,718,290  |  
|                                              |  |                                 |            |   |                                 |   |            |                                                           |  |   |            |   |  |      |            |   |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-2



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E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)



|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|--------------------------------------------------------------------------- |  | ------------------------------ | -------- | - | ------------------------------------------------------- | - | -------- | ---- |  | - | ---------- | -
|                                                                            |  | Nine Months EndedSeptember 30, |          |   | For the PeriodMarch 14, 1990(Inception) toSeptember 30, |  
|                                                                            |  | 2004                           |          |   | 2003                                                    |   |          | 2004 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                        |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|Net loss                                                                    |  | $                              | (452,837 | ) |                                                         | $ | (608,429 | )    |  | $ | (1,301,710 | )
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|Depreciation and amortization                                               |  |                                | 24,058   |   |                                                         |   | 21,684   |      |  |   | 98,942     |  
|Stock based compensation                                                    |  |                                |          |   |                                                         |   | 600,000  |      |  |   | 605,000    |  
|Research and development costs                                              |  |                                |          |   |                                                         |   |          |      |  |   | 8,808      |  
|Start-up costs                                                              |  |                                |          |   |                                                         |   |          |      |  |   | 19,177     |  
|Amortization of prepaid expense                                             |  |                                | 32,358   |   |                                                         |   | 8,925    |      |  |   | 48,933     |  
|Changes in operating assets and liabilities:                                |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|Accounts receivable                                                         |  |                                | (50,090  | ) |                                                         |   | (222,246 | )    |  |   | (149,652   | )
|Inventory                                                                   |  |                                | (121,902 | ) |                                                         |   | (156,337 | )    |  |   | (283,155   | )
|Prepaid expenses                                                            |  |                                | (8,474   | ) |                                                         |   | 160      |      |  |   | (8,474     | )
|Accounts payable                                                            |  |                                | 187,473  |   |                                                         |   | 149,574  |      |  |   | 438,392    |  
|Accounts payable to related party                                           |  |                                | (47,099  | ) |                                                         |   |          |      |  |   | 19,878     |  
|Accrued expenses                                                            |  |                                | 134,211  |   |                                                         |   | 59,400   |      |  |   | 178,041    |  
|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|Net Cash Used in Operating Activities                                       |  |                                | (302,302 | ) |                                                         |   | (147,269 | )    |  |   | (725,820   | )
|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                        |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|Purchases of property and equipment                                         |  |                                | (56,858  | ) |                                                         |   | (6,703   | )    |  |   | (92,246    | )
|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|Net Cash Used in Investing Activities                                       |  |                                | (56,858  | ) |                                                         |   | (6,703   | )    |  |   | (92,246    | )
|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                        |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|Initial capitalization                                                      |  |                                |          |   |                                                         |   | 1,666    |      |  |   | 1,666      |  
|Cash acquired in acquisition                                                |  |                                |          |   |                                                         |   |          |      |  |   | 200,000    |  
|Notes payable to bank                                                       |  |                                |          |   |                                                         |   | 65,000   |      |  |   | 141,098    |  
|Notes payable to financing company                                          |  |                                | 4,696    |   |                                                         |   |          |      |  |   | 4,696      |  
|Notes payable to related party                                              |  |                                | (22,001  | ) |                                                         |   | 77,000   |      |  |   | 298,584    |  
|Convertible promissory note                                                 |  |                                | 175,000  |   |                                                         |   |          |      |  |   | 175,000    |  
|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|Net Cash Provided by Financing Activities                                   |  |                                | 157,695  |   |                                                         |   | 143,666  |      |  |   | 821,044    |  
|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|NET (DECREASE) INCREASE IN CASH                                             |  |                                | (201,465 | ) |                                                         |   | (10,306  | )    |  |   | 2,978      |  
|                                                                            |  |                                |         
|CASH BEGINNING OF YEAR                                                      |  |                                | 204,443  |   |                                                         |   | 13,217   |      |  |   |            |  
|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  
|CASH END OF YEAR                                                            |  | $                              | 2,978    |   |                                                         | $ | 2,911    |      |  | $ | 2,978      |  
|                                                                            |  |                                |          |   |                                                         |   |          |      |  |   |            |  



See accompanying notes
to consolidated financial statements.



F-3



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E MED FUTURE, INC.

(A Development Stage Company)



CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)(CONTINUED)



|                                                                                                                     |  |                                |  |                                                           |        |      |   |        
|-------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ |  | --------------------------------------------------------- | ------ | ---- | - | -------
|                                                                                                                     |  | Nine Months EndedSeptember 30, |  | For the PeriodMarch 14, 1990 (Inception) to September
30,
|                                                                                                                     |  | 2004                           |  | 2003                                                      |        | 2004
|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 34,000 shares at $0.90 per share for Strategic Allowance Agreement                                       |  |                                |  | $                                                         | 30,600 |      |   | 30,600 
|Issuance of 1,250,000 shares valued at $0.3108 per share to acquire MSTI and allocation of purchase price to license |  |                                |  |                                                           |        |      |   | 188,500
|Note payable related party converted into common stock                                                               |  | 266,484                        |  |                                                           |        |      |   | 266,484
|Issuance of 2,000,000 shares at $0.44 per share for consulting agreement                                             |  | 880,000                        |  |                                                           |        |      |   | 880,000
|                                                                                                                     |  |                                | 
|CASH PAID FOR:                                                                                                       |  |                                |  |                                                           |        |      |   |        
|Interest                                                                                                             |  | 8,433                          |  |                                                           |        |      |   | 16,746 



See accompanying notes
to consolidated financial statements.



F-4



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E MED FUTURE, INC.

(A Development Stage Company)



NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS



NOTE 1 BASIS OF PRESENTATION



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



NOTE 2 STOCKHOLDERS EQUITY



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



NOTE 3 CONVERTIBLE PROMISSORY NOTE



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



NOTE 4 DISTRIBUTION AND MARKETING AGREEMENT



On April 30, 2004, the Company entered into a Distribution and Marketing Agreement with TransGlobal Medical Sales & Services, Inc. (hereafter referred
to as Distributor). The agreement provided for the marketing and distribution of E Med products to all territories outside the United States with the exception of nations where there were already existing agreements. The agreement was to
remain in effect so long as the Distributor was not in default with respect to the agreement. The agreement provided that upon execution, the Distributor would issue a purchase order to the Company for E Med products in the amount of 100,000 units
for delivery within 12 months of the execution of the agreement.



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E MED FUTURE, INC.

(A Development Stage Company)



NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (CONTINUED)



NOTE 4 DISTRIBUTION AND MARKETING AGREEMENT (CONTINUED)



Additionally, the Distributor was to order with submission of
the purchase order, a request for 10,000 units. Payment in the amount of $560,000 for these units was to be paid in full within 90 days of execution of the agreement. As at June 30, 2004, the Distributor had been invoiced for 6,780 units. Payment
was due on July 31, 2004, but was not made. On October 19, 2004, the Distributor was formally notified that it was in material breech of the agreement, specifically, payment was not made when due as required by the agreement. The Distributor had
until November 19, 2004 to cure its breech of the agreement to avoid termination. The Company has initiated litigation to recover damages from the Distributor resulting from its default on the agreement.



NOTE 5 LICENSE AND DISTRIBUTION AGREEMENT



On September 16, 2004, the Company entered into a license and distribution
agreement with ITDevelopment Solutions, Inc. (ITD), granting ITD the exclusive right to manufacture, distribute and sell the NeedleZap unit in Pakistan and the United Arab Emirates. IDT has completed construction of a new high-tech manufacturing
facility in Pakistan that will reduce the production cost of NeedleZap by 58%. IDT bears all the costs of the new facility as part of the arrangements. In connection with the IDT arrangement, the Company entered into a two year consulting agreement
with IDT president, Patrick Downs, in which Mr. Downs agreed to perform consulting service as an independent contractor. Pursuant to the term of the agreement, Mr. Downs will render advice and assistance with respect to the development of the
Pakistan manufacturing facility. The agreement provides for the issuance to Mr. Downs of 2,000,000 shares of the Companys common stock as compensation for his service. The shares have been valued at an average price of $0.44 per share or
$880,000 as a prepaid consulting fee to be amortized over a two year period.



In connection with the license and manufacturing agreement, the Company is to receive 10,000 NeedleZap units without cost, $90,000 in cash within 8 weeks of the execution of the agreement and royalties for each unit
sold.



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