**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-KSB/A**





x ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
      the
      Fiscal year ended June 30, 2005





 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT
      OF 1934





For
      the
      transition period from ------ To: ------





Commission
      file number: 333-51880





**NEW
      MEDIUM ENTERPRISES, INC.**


(Name
      of
      Small Business Issuer in its Charter)





Nevada
            
            13502174State
                or Other Jurisdiction of Incorporation of Organization)
            
            (I.R.S.
                Employer Identification No.)





**MAHESH
      JAYANARAYAN, CEO**


195
      The
      Vale


London
      W3
      7QS


Tel:
      011
      44 208 746 2018


Fax:
      011 44 208 749-8025


(Address,
      including zip code, and telephone number, including area code,


of
      registrant's principal executive offices)





Securities
      registered pursuant to Section 12(b) of the Act:





OTC
      Bulletin Board


Name
      of
      each exchange on which registered





Common


Title
      of
      each class





Securities
      Registered Pursuant to Section 12(g) of the Act:





Common
      Stock


(Title
      of
      class)











Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 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  ̈ No x





The
      Company is late in its filing of the 10K report which is the current filing.
      All
      other reports have been filed.





State
      the
      aggregate market value of the voting stock held by non-affiliates of the
      registrant. The aggregate market value shall be computed by reference to the
      price at which the stock was sold, or the average bid and asked prices of such
      stock, as of a specified date within 60 days prior to the date of filings.
      As of
      trade date June 30, 2005 the aggregate market value of the voting stock held
      by
      non-affiliates of the registrant was $1,730,150.





(See
      definition of affiliate in Rule 405).





NOTE:
      If
      a determination as to whether a particular person or entity is an affiliate
      cannot be made without involving unreasonable effort and expense, the aggregate
      market value of the common stock held by non-affiliates may be calculated on
      the
      basis of assumptions reasonable under the circumstances, provided that the
      assumptions are set forth in this form.





APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
      DURING THE PRECEDING FIVE YEARS:





Indicate
      by check mark whether the issuer has filed all documents and reports required
      to
      be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
      subsequent to the distribution of securities under a plan confirmed by a
      court.





Yes
      No -
      N.A.





APPLICABLE
      ONLY TO CORPORATE ISSUERS:





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date.





Common
                Stock, $.0001 par value
            132,606,000(Title
                of Class)
            (Shares
                outstanding at October 17, 2005)


-
            2
            -




**NEW
      MEDIUM ENTERPRISES, INC.**


Form
      10-K
      for the Year Ended June 30, 2005


Table
      of Contents





PAGE**PART
                I**ITEM
                1. BUSINESS
            4ITEM
                2. PROPERTIES
            16ITEM
                3. LEGAL PROCEEDINGS
            17ITEM
                4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                HOLDERS
            17**PART
                II**ITEM
                5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED
                SHAREHOLDER MATTERS
            18ITEM
                5A. SELECTED FINANCIAL DATA
            18ITEM
                6. MANAGEMENT DISCUSSION & ANALYSIS OF
                FINANCIAL CONDITION
            19ITEM
                7. FINANCIAL STATEMENTS AND SUPPLEMENTARY
                DATA
            24ITEM
                8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                ON ACCOUNTING AND FINANCIAL DISCLOSURE
            41ITEM
                8A. CONTROLS AND PROCEDURES
            41ITEM
                8B. OTHER INFORMATION
            43**PART
                III**ITEM
                9. DIRECTORS & EXECUTIVE OFFICERS OF THE
                REGISTRANT
            44ITEM
                9A. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
                ACT
            47ITEM
                10. EXECUTIVE COMPENSATION
            47ITEM
                11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                OWNERS AND MANAGEMENT
            49ITEM
                12. CERTAIN RELATIONSHIPS AND RELATED
                TRANSACTIONS
            50ITEM
                13. PRINCIPAL ACCOUNTANT FEES AND
                SERVICES
            52ITEM
                14. EXHIBITS INCORPORATED BY
                REFERENCE
            53**PART** **IV**ITEM
                15. EXHIBITS INDEX
            54ITEM
                16. SUBSEQUENT EVENTS
            54SIGNATURES
            55





-
            3
            -





**ITEM
      1. BUSINESS**





We
      were
      incorporated in Nevada on August 2, 1999 under the name Shopoverseas.com Inc.
      On
      July 10, 2000, we changed our name to New Medium Enterprises, Inc.





On
      January 13, 2004 we acquired the business and all of the intellectual property
      assets of a new and emerging DVD format known as VMD (Versatile MultiLayer
      Disc). We have discontinued all our internet and wireless businesses and have
      since focused all of our resources to developing our proprietary VMD prototypes
      and pipeline of products as our core business. As a result, we are positioned
      in
      the Optical Disc Storage sector, a huge and growing segment of the data storage
      market, of which DVD formats have an effective monopoly presently. This sector
      of the storage market is currently undergoing a cycle of change precipitated
      by
      the emergence of high definition TV into the marketplace.





NME
      has
      acquired and developed a technology which increases the capacity of a
      conventional DVD by a factor of 5-10, allowing much greater storage for data
      and
      film content. This new technology is called Versatile Multilayer Disc (VMD).
      Because VMD is based on current DVD 'red laser' technology it means that after
      a
      simple software upgrade VMD is compatible with new DVD drives and potentially
      all existing 1Bn drives currently used by businesses and consumers around the
      globe.





Significantly,
      VMD can be produced by every standard DVD-9 replicator in the world without
      modification to the plant. The Company is negotiating valuable partnerships
      with
      major production facilities, drive manufacturers and content owners to exploit
      VMD's capabilities.





In
      the
      information driven, digitally dependant marketplace, controlling, accessing
      and
      storing large quantities of data is a fundamental requirement. These markets
      now
      consume 6bn DVDs each year, largely pre-recorded with film content and
      increasing capacity is a key driver. We believe VMD represents a huge leap
      in
      the availability of that capacity, yet based on current market
      products.





As
      VMD
      can work in existing DVD players and allow content owners to deliver their
      material in much higher quality (such as the new High Definition standard in
      film), uniquely it also avoids persuading consumers to replace their existing
      DVD collection or DVD player. This is a crucial advantage in terms of VMD's
      market potential.





We
      are
      targeting the pre-recorded video segment of the entertainment industry by
      offering them VMD as a solution to thwart video piracy.





As
      the
      desire for ever greater capacities rises, consumers are traditionally reluctant
      to adopt new technologies unless there is a clear market leader. The blue laser
      technologies have several competing approaches by rival companies, and no single
      format has emerged. The battle between Betamax and VHS is being
      revisited.





VMD
      on
      the other hand, requires no such ultimatum to the consumer.





-
            4
            -





We
      believe this represents a significant market opportunity for NME with VMD,
      particularly as we believe the blue laser based systems will take three to
      four
      years to become mainstream even if one format does become dominant.





We
      are
      centered on further developing innovative storage technologies, along with
      congruous video compression technology; enabling a new generation of high
      performance, low cost digital storage devices. We believe the convergence of
      High Definition with VMD technology leverages the company's expertise in the
      development of high definition players, recorders and personal video
      recorders.





How
      It
      Works





VMD
      is a
      system based on currently available technology. We believe it therefore delivers
      capacity, flexibility and market potential far greater than currently available
      and which is also capable of competing with emerging technologies in blue
      laser.





Conventional
      DVDs are either single, or increasingly, dual layer discs which store and
      retrieve digital (e.g. film) content from a data layer(s) within the thickness
      of the DVD. DVDs are usually 0.8mm thick and have a reflective layer to bounce
      the laser back that is used to read or record the data.





VMD
      works
      by being able to store data on multiple layers within the standard DVD disc
      format. NME's scientific team have pioneered and patented two crucial processes
      to make this technology commercially viable:





Producing
      multiple layers within the 0.8mm DVD thickness, each capable of storing nearly
      as much data as a conventional DVD.





Basing
      this on existing red laser drives and being able to manufacture these discs
      using existing DVD production lines.





As
      VMD
      discs can be read by standard DVD-R drives once their internal software
      (firmware) has been updated, this enables VMD to be reverse compatible with
      many
      existing DVD drives, of which it is estimated there will be 450m in the market
      by the end of 2005. All current DVDs and CDs are still playable on the updated
      DVD drive.





We
      anticipate the VMD player technology will be delivered into a number of other
      devices, such as PC's, set-top boxes, access devices and game consoles. We
      anticipate the software up-grade will be available free to download on the
      internet for PC users, or burnt on a specific track within every VMD disc.
      Manufacturers find this attractive since it represents zero cost and yet enables
      their drives for greater capacity and future proofing.





Key
      Advantages:





Versatile:
      Inherent backward compatibility with all the existing and previous Disc formats.
      VMD Drives will be able to read other standard formats including CD and
      DVD.





-
            5
            -





Adaptable:
      VMD multilayer technology does not strictly function with red laser only, but
      can easily be applied to blue laser as well once the Blue laser technology
      is
      flawless. We anticipate that VMD would therefore attain even larger storage
      capacities by offering increased storage whichever base it uses.





Affordable:
      We anticipate VMD will require only marginal modifications of the manufacturing
      equipment but practically keeps untouched all basic components that are used
      today. This would translate into lower costs to the producers and will have
      no
      trickle-down effect burdening the end-consumer. In other words, we anticipate
      prices will barely differ from existing DVDs and players. VMD technology is
      based on classical CD/DVD machinery, technologies and inexpensive commercial
      red
      lasers and consequently holds the advantage of simplicity in disc and drive
      manufacturing.





Significantly,
      we believe VMD can be produced by every standard DVD-9 replicator in the world
      without modification to the plant. The Company is negotiating valuable
      partnerships with major production facilities, drive manufacturers and content
      owners to exploit VMD's capabilities.





In
      the
      information driven, digitally dependant marketplace, controlling, accessing
      and
      storing large quantities of data is a fundamental requirement. These markets
      now
      consume 6bn DVDs each year, largely pre-recorded with film content and
      increasing capacity is a key driver.





As
      VMD
      can work in existing DVD players and allow content owners to deliver their
      material in much higher quality (such as the new High Definition standard in
      film), uniquely it also avoids persuading consumers to replace their existing
      DVD collection or DVD player. We believe this is a crucial advantage in terms
      of
      VMD's market potential.





OUR
      PRODUCTS AND SERVICES





We
      anticipate the VMD disc will be produced in a number of formats:





·
            READ
                ONLY


·
            WRITE
                ONCE


·
            RE-WRITABLE


·
            READ
                ONLY/RE-WRITABLE COMBINED





We
      anticipate the VMD will be mass manufactured at low cost using standard DVD-9
      manufacturing facilities and equipment. The technology is patented and has
      a
      self protect feature as it is completely impregnable to analysis after
      manufacture.





THE
      PLAYER





The
      VMD
      drive is very similar to the standard DVD drive with only simple modifications
      to the firmware to instruct the laser to read multiple layers. The modifications
      in the software re-calibrate the red laser, enabling it to read data on all
      data
      layers (not just top and bottom as in conventional DVDs). Most modern DVD
      players can be upgraded in this way.





-
            6
            -





We
      anticipate VMD will provide the same storage as five to ten DVD-9 discs using
      the existing DVD burner/player.





Content
      market: Vendors will be able to retail HD quality films at a premium price,
      or
      provide whole collections of films on one disk, thus minimizing both disk
      purchase and packaging prices.





Gaming
      vendors: We anticipate VMD will provide a large capacity, standard delivery
      platform for the new generation of High Definition gaming products across the
      globe.





As
      of
      June 30, 2005, we completed the development of the initial pre-industrial
      prototype with storage capacity of approximately 30GB.





MARKET
      OPPORTUNITY





Global
      DVD Market





Competing
      technologies coming to market are blue laser based and although offering higher
      data densities, currently provide less storage capacity than VMD and require
      the
      consumer to buy new content and replace their DVD drive or player with expensive
      and proprietary new equipment. In many regions of the world, the DVD type
      optical disc technologies have, or are gradually becoming the dominant consumer
      storage and transport medium, primarily due to their low cost of production,
      ready distribution and relative longevity and reliability.





DVD
      disk
      replication worldwide in 2004 consisted of over 6.7 billion units. By value,
      the
      International market for DVDs will be worth approximately $85bn (USD) by 2010
      (Source: Informa Telecomms and Media).





The
      pre-recorded market consists almost exclusively of pre-recorded feature film
      content. This market is dominated by Hollywood film studios in the West and
      equivalents in the East and Far East. It is these content owners who control
      who
      replicates for them, with Hollywood studios being the most influential. The
      net
      result of this is that the majority of the current pre-recorded DVD supply
      chain
      is concentrated into five replication companies, which between them will provide
      an estimated 63% of 2005's projected total global output.





Although
      pre-recorded DVDs currently outstrip sales of blank media by 4:1, by 2009 this
      will have reduced to just over 50% of the market, driven by the increase in
      popularity of DVD as a home data storage medium. Most manufacturing for both
      blank and pre-recorded DVDs is handled by a small number of very large scale
      manufacturers located in S.E. Asia.





Most
      DVD-ROM discs are also pre-recorded for computer games. All three leading games
      consoles use DVD as a delivery platform. The greatest quantity of X-box and
      Sony
      PlayStation2 discs are replicated in the USA and 'in-house' while Nintendo
      Game
      Cube discs are replicated by Panasonic in the USA and Japan.


-
            7
            -




We
      anticipate that emerging markets for red laser based DVD formats are likely
      to
      be the most attractive, whilst established DVD markets keen to adopt blue laser
      technologies will be the most difficult to compete in. We anticipate the UK
      and
      Europe will likely present a legacy market, where consumers who do not wish
      to
      change formats or replace equipment will provide commercially fertile group
      for
      VMD for some years, provided appropriate channels can be found.





Latin
      America is an emerging DVD market, but which is likely to follow North American
      trends due to their attraction to Hollywood content.





DVD
      Players





A
      DVD
      disc is only useful if it can be played or recorded on in a DVD player or DVD
      recorder. Although there are some minor differences, the actual DVD drives
      found
      in most personal computers, game consoles and stand alone DVD players/recorders,
      are identical. There are currently approximately one billion of these in use
      in
      the market today.





Of
      this
      one billion, Understanding and Solution's research suggest that 450m of these
      are DVD-R drives. It is these drives that are most suitable for a simple
      firmware upgrade to enable them to read the extra data that VMD discs can
      store.





OUR
      COMPETITION





Blue
      Laser Based Technology





The
      USA
      is the biggest global consumer and producer of pre-recorded DVDs with European
      based factories contributing a further 25%. The market is set to change
      significantly with the emergence of two new higher specification technologies:
      Blu-ray and HD DVD, both being blue laser based optical disc technologies
      allowing greater storage capacities.





Blu-ray,
      is the next-generation optical disc format jointly developed by the Blu-ray
      Disc
      Association (BDA), a group of leading consumer electronics companies including
      Panasonic, Samsung, Apple, Dell and Hewlett-Packard but is effectively a Sony
      product. The format uses blue laser rather than current red laser to enable
      recording, rewriting and playback of large amounts of data. A single-layer
      Blu-ray Disc can hold 25GB of data, which can record over 2 hours of HD or
      13
      hours of standard TV. HD DVD was developed by Toshiba and NEC, and is supported
      by Warner Bros., Paramount and Universal. Like Blu-ray, this enables a disc
      the
      size of a current DVD disc, but with much greater storage capacity to hold
      an
      entire film at HDTV resolution with single-layer disc storage capacity of 15GB
      and dual-layer 30GB.





Although
      Toshiba and Sony have been in dialogue since last year, after pressure by the
      content owners fearing a format war, agreement on a combined format has been
      abandoned for now and we believe will cause indecision in the market and aid
      the
      case for VMD significantly.





-
            8
            -





Microsoft
      is supporting HD DVD in its next version of Windows, but the new Xbox 360
      contains neither an HD DVD nor Blu-ray drive. Sony will include a blue laser
      drive in PlayStation 3.





USA
&
      Europe





Both
      the
      USA and Europe pose significant barriers to entry for the new or small player
      wishing to enter the market. The key inhibitors are cash flow rich, aggressive
      competitors in Blu-ray and HD DVD who are Hollywood driven. Access to these
      markets can be extremely difficult, particularly as all key enterprises within
      the market place are aligned with one or other of the blue laser based
      technologies.





We
      have
      therefore focused on the other world markets and content vendors such as Eros.
      Eros distributes Bollywood content worldwide and enjoys significant sales in
      Europe and specifically the UK. We anticipate that VMD technology will trickle
      down into the market through such partners, who see VMD as a market ready,
      compatible technology which enhances their own business development
      plans.





China





In
      China
      there is also a competing High Definition technology - digital videodisk (HDV)
      player and also independently developed IDVD (Internet DVD) player. However
      only
      EVD is proven technology, currently available in the shops and government backed
      and with who we are negotiating a commercial partnership.





INTELLECTUAL
      PROPERTY PROTECTION





The
      first
      comprehensive patent titled "Multi-layer quasi-reflective media and method
      of
      its manufacturing" has been filed initially as a provisional US patent
      application with the enlarged version prepared as regular PCT & US
      application which has been submitted in 2003.





This
      patent covers the basic technological principles and processes of manufacturing
      of VMD. In addition, as per the acquisitions of MultiDisk and we acquired from
      TriGm International S.A., a portfolio of researched and isolated patentable
      inventions related to VMD technologies for which we plan to apply for patent
      protection in the future. We have so far refrained from applying for these
      more
      detailed patents on the basis that by making the information public as required
      by the application, they are more likely to give away the technology in
      territories where patents are near impossible to enforce e.g. China. Instead
      we
      are strongly pursuing a commercial strategy for protecting the VMD technology.
      By partnering with the biggest content providers in the market, and in the
      case
      of China - a government backed company, it is effectively locking out any
      potential competitors from the market. In the long-run we believe this should
      prove far more effective than any legal redress. It is also expected that we
      will develop new derivative concepts, as well as supplementary technological
      solutions and processes, resulting in patents and/or know-how, which we
      anticipate will be expanded upon and enhance the original VMD concept and
      intellectual property.





-
            9
            -





We
      have
      three patents relating to our VMD technologies. Supporting these are a variety
      of unique skills and core operational IPR and although may not necessarily
      be
      patentable in themselves, will necessarily be jealously guarded and ruthlessly
      protected by the Company.





RISKS
      FACTORS





GENERAL
      RISKS





With
      the
      acquisitions of the VMD business and intellectual property assets, we are
      subject to certain risks and uncertainties. In considering whether to acquire
      our common stock, you should carefully consider the risk factors described
      below. You should consider these risk factors, together with all of the other
      information in this 10K Report and the documents we have incorporated by
      reference, before you decide to purchase shares of our common
      stock.





The
      following risks and uncertainties are not the only ones we face. Risks and
      uncertainties which either we do not know about or we currently believe are
      immaterial may also materially impair our business operations. If any of the
      following risks occur, our business, results of operations, financial position
      or cash flows, could be materially adversely affected. In that event, the
      trading price of our common stock could decline, and you may lose all or part
      of
      your investment.





TECHNOLOGY
      RISKS





We
      have
      no history of revenue, and expect to continue to incur operating losses until
      such time as our first generation products achieve commercial
      acceptance.





We
      have
      no revenue history and therefore we have not achieved profitability. We expect
      to continue to incur operating losses for the foreseeable future at least until
      such time the first generation products are commercialized, and only provided
      we
      are able to generate fees through royalty agreements and joint venture
      agreements. Any fees we could potentially generate would most likely not occur
      until and unless the actual products are produced after validation of the
      industrial prototype.





We
      have
      never generated any revenues or profits, and there is no assurance that, in
      the
      future, we will be profitable on a quarterly or annual basis. We anticipate
      that
      we will continue to incur losses until, at the earliest, our first generation
      of
      products achieve commercial acceptance and we generate enough revenue from
      the
      sale or licensing of our products to offset our operating costs. We have limited
      capital resources.




OUR
        LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO EVALUATE OUR
        BUSINESS
 
 We
        have
        not yet generated any revenues from the sale of products. Although we have
        completed our industrial prototypes, we do not anticipate generating material
        revenue from the sale of products in the immediate future. Accordingly, there
        are no meaningful period-to-period comparisons of our operating results from
        which to evaluate our performance. The lack of performance history of our
        products, our limited forecasting experience and processes and the emerging
        nature of our target markets makes forecasting our future sales and operating
        results difficult.
 -
              10
              -




We
      cannot
      assure you that any revenues generated in the future, if any, will be sufficient
      to finance the complete cost of our research and development. We will require
      significant additional funds before we achieve positive cash flow from
      operations. Our future capital requirements and profitability depend on many
      factors, such as the timely success of product development projects, the
      timeliness and success of joint venture and corporate alliance strategies and
      our marketing efforts. Terms on which we may raise additional capital may
      include restrictions that could create difficulties in obtaining future
      financings limit our options for changing the business and cause substantial
      cash flow problems. Any equity raises of additional stock or convertible debt
      financing which we obtain, if any, could result in substantial dilution to
      stockholders.





NEED
      FOR
      ADDITIONAL CAPITAL





We
      may
      have to raise additional capital through Private Placements of equity shares.
      If
      we are unable to secure additional sources of capital we will need to
      substantially curtail our level of research and development efforts and other
      activities. We anticipate that we will require substantial additional financing
      to fund our working capital requirements. There can be no assurance, however,
      that additional funding will be available or, if available, that it will be
      available on terms acceptable to us. There can be no assurance that we will
      be
      able to raise additional cash if our cash resources are exhausted. Our ability
      to arrange such financing in the future will depend, in part, upon the
      prevailing capital market conditions as well as our business performance and
      the
      success of our prototypes.




RISKS
        IN
        COST ESTIMATES FOR FUTURE MASS PRODUCTION
 
 These
        risks are the most difficult to assess at this stage of development. Changes
        might occur in the estimated cost of equipment needed for commercial VMD
        mass
        production and distribution. An important attribute of our technology is
        that it
        is based on standard red laser technology which we believe will result in
        minimum infrastructure costs as opposed to the competing Blue-Ray products,
        which are believed to require significant infrastructure costs. This is the
        most
        important competitive edge we may have over industry giants such as Sony
        and the
        Blu-Ray consortium, and other giants such as Toshiba and NEC, and others.
        In the
        event the cost for mass producing the products proves to be materially more
        expensive than anticipated, it may cause the product to be too expensive
        as a
        result of the higher than anticipated production cost, and thus less competitive
        with the Blu-Ray products or other products developed by industry giants
        such as
        NEC and Toshiba which may have a material adverse effect on our company and
        on
        the price of our stock.
 
 INTELLECTUAL
        PROPERTY RISK
 
 WE
        CANNOT
        ASSURE YOU THAT WE WILL SUCCESSFULLY PROTECT OUR VMD TECHNOLOGY AND ENFORCE
        OUR
        INTELLECTUAL PROPERTY RIGHTS
 
 Intellectual
        property Risks - Our initial patent application has not yet been fully assessed
        by a patent office, so there is still a possibility, that some prior art
        or
        similar recent application may be found that would significantly reduce the
        value of intellectual property which would have a material adverse effect
        on our
        company and the price of our stock. We expect to develop trade secrets and
        may
        seek patent or copyright protection for trade secrets. We cannot assure you
        that
        we will develop trade secrets or seek patent or copyright protection for
        any or
        all of them. We have entered into and intend to enter into confidentiality
        and
        non-disclosure agreements to protect one or more trade secrets which we or
        our
        employees or independent contractors may develop, but we cannot assure you
        that
        we will do so or that the appropriate parties will maintain the confidentiality
        necessary to protect our trade secrets. A failure to maintain one or more
        trade
        secrets could have a material adverse impact on us.


-
            11
            -




We
      may
      offer products in the U.S. and in foreign countries based on the patented
      Versatile Multilayer Disc (VMD). However, certain countries in the Pacific
      Rim
      and elsewhere may not offer the same degree of intellectual property protection
      that the U.S., European Community and Japan afford. Therefore, we may be unable
      to enforce our patent rights in those jurisdictions, even if we are able to
      obtain intellectual property rights.





We
      cannot
      guarantee that any patents, copyrights, trade secrets, trademarks or domain
      names that we develop or obtain will provide sufficient protection to us.
      Furthermore, we cannot assure you that other parties will not challenge the
      validity of our intellectual property results or that other parties will not
      assert affirmative defenses to infringement or dilution. If another party
      succeeds in developing optical data storage technology comparable to VMD without
      infringing, diluting, misusing, misappropriating or otherwise violating our
      intellectual property rights, our financial condition may materially
      suffer.




WE
      MAY
      REQUIRE ADDITIONAL TECHNOLOGY IN ORDER TO SUCCESSFULLY DEVELOP AND LICENSE
      OUR
      TECHNOLOGY





We
      believe that we have researched a substantial amount of technology for our
      products. However, we may need to develop or acquire some additional technology
      in order to produce products that are ready for commercial sale or licensing.
      If
      we cannot develop the additional technology that we need in order to be able
      to
      sell the products, we may have to purchase technology from others. We cannot
      promise or accurately forecast whether we will succeed in performing these
      acquisitions.





BUSINESS
      RISK





DEPENDENCE
      ON KEY PERSONNEL





We
      depend
      upon certain key personnel, and we may become unable to maintain or attract,
      knowledgeable and experienced personnel vital to our financial
      success.





In
      order
      to succeed, we depend upon our ability to attract and retain highly qualified
      technical and management personnel, including experts in the field of optical
      storage technology and the sciences underlying such technology. We cannot assure
      you that we will be able to attract and retain the qualified personnel we need
      for the business. We have entered into an Agreement with V-Tech, LaDIS and
      Silicone Valley Plc. for the research and development of the prototypes and
      commercializing the products. Should any of the required crucial scientists
      leave V-Tech, LaDIS or Silicon Valley Plc. our research and development efforts
      and capabilities might be adversely impacted. A departure of required scientist
      could delay our ability to successfully market or bring our products to market.
      Qualified scientists and other technical personnel are in high demand and are
      often subject to competing offers. We face competition for such personnel from
      other companies, research and academic institutions, government entities and
      other organizations. We do not currently maintain "key man" insurance for any
      personnel. We have attempted to retain our key personnel, including our officers
      & directors by providing them with attractive incentive packages, which
      include competitive salaries and stock grants. However, we cannot assure you
      that these incentives will guarantee retention of our key
      employees.




-
            12
            -


WE
      MAY
      BECOME FINANCIALLY DEPENDENT ON ONE OR A SMALL NUMBER OF CUSTOMERS





Because
      we are a research and development company, we have not developed a customer
      base
      for our products. We hope to establish joint ventures and licensing arrangements
      with strategic partners to license VMD technology. In the future, it is possible
      that we, the joint ventures and licensees will have sales to one or a small
      number of customers which equal ten percent or more of our consolidated
      revenues. This would subject us to depending on that supplier or joint venture
      partner, which could have an adverse effect on our company and on the price
      of
      our shares.




CONCENTRATION
      OF OWNERSHIP OF OUR COMMON STOCK AMONG THE SHAREHOLDERS TO WHOM WE ISSUED SHARES
      IN EXCHANGE OF THE VMD ASSETS, INCLUDING NEWLY APPOINTED OFFICERS AND DIRECTORS,
      MAY PREVENT CURRENT AND NEW INVESTORS FROM INFLUENCING SIGNIFICANT CORPORATE
      DECISIONS





In
      connection with the acquisition the Company issued 72,605,776 shares of its
      stock to the shareholders of MultiDisk and TriGM. On May 10, 2005, an additional
      10,000,000 shares were issued to an affiliate of the company in exchange of
      $200,000 investment. See also Subsequent Events regarding additional issuance
      of
      shares to principals and executive staff.





PROVISIONS
      OF CORPORATE LAW AND OUR CERTIFICATE OF INCORPORATION COULD DETER TAKEOVER
      ATTEMPTS





The
      provisions of the corporate law of our state of incorporation and our
      certificate of incorporation could make it more difficult for a third party
      to
      acquire control of us, even if the change of control would benefit the
      stockholders.





COMPETITION





The
      market for our technology is very competitive, is subject to rapid technological
      changes and varies for different individual products. We believe that there
      are
      potentially many competitive approaches being pursued in competition to our
      technology, including some by private companies for which information is
      difficult to obtain. Most of all, our competitors have significantly greater
      resources, more product candidates and have developed product candidates and
      processes that directly compete with our technology. Our competitors may have
      developed, or could in the future develop, new technologies that compete with
      our technology or even render our technology obsolete. Our technology is
      designed to produce high capacity, next generation discs that could effectively
      compete with the current blue-ray products being produced by Industry Giants
      such as Sony, NEC, Toshiba, etc. Even if we are able to demonstrate improved
      or
      equivalent results, researchers and practitioners may not use our technology
      and
      we will suffer a competitive disadvantage. As a result, we may be unable to
      compete successfully in the market place which could have a material adverse
      effect on the price of our stock.




-
            13
            -


INDUSTRY
      RISKS





OUR
      EXPECTED PRODUCTS MAY BE SUBJECT TO VARIOUS LEGAL AND REGULATORY
      CONTROLS





We
      are
      unaware of any particular electrical, telecommunication, environmental, health
      or safety laws and standards that will apply to our products. While we do not
      anticipate special regulations of our products, we cannot assure you that we
      will not have to comply with laws and regulations of domestic, international
      or
      foreign governmental or legal authorities. Compliance with these laws and
      regulations could have a material adverse affect on us.




WE
      MAY BE
      UNABLE TO OBTAIN SUFFICIENT COMPONENTS ON COMMERCIALLY REASONABLE OR
      SATISFACTORY TERMS, WHICH MAY HAVE A MATERIAL ADVERSE IMPACT ON OUR FINANCIAL
      CONDITION





It
      is
      common in the data storage technology manufacturing and assembly industry for
      certain components to be available only from a few or sole-source suppliers.
      We
      cannot assure you that the key components for future products will be available
      from more than a few suppliers. Therefore, we, our joint ventures and our
      licensees may experience difficulty in obtaining a sufficient supply of key
      components on a timely basis. We hope to develop relationships with qualified
      manufacturers with the goal of securing high-volume manufacturing capabilities,
      thus controlling the cost of current and future models of our future
      products.





We
      cannot
      assure you that we will be able to obtain a sufficient supply of components
      on a
      timely basis or on commercially reasonable terms. The same supply and cost
      problems could adversely affect our sales of products. The inability to obtain
      sufficient components and equipment, to obtain or develop alternative sources
      of
      supply at competitive prices and quality or to avoid manufacturing delays,
      could
      prevent joint ventures from producing sufficient quantities of our products
      to
      satisfy market demand. Additionally, in the case of a component purchased
      exclusively from one supplier, joint ventures could become unable to produce
      any
      quantity of the affected products until the component becomes available from
      an
      alternative source. These problems could cause delays to product shipments,
      thereby increasing the joint venture's material or manufacturing costs or
      causing an imbalance in the inventory levels of certain components. Moreover,
      difficulties in obtaining sufficient components may cause joint ventures and
      licensees to modify the design of our products to use a more readily available
      component. These design modifications may also result in product performance
      problems. Any or all of these problems could result in the loss of customers,
      provide an opportunity for competing products to achieve market acceptance
      and
      otherwise adversely affect our business and financial results.





Due
      to
      potential intellectual property claims and litigation that parties may initiate
      against us, we may suffer economic losses and become unable to research, develop
      or license the sale or manufacture of the technology.





-
            14
            -





As
      is
      typical in the data storage industry, other parties may in the future notify
      us
      of claims that may be infringing, diluting, misusing, misappropriating or
      otherwise violating our intellectual property rights. It is impossible to
      predict the outcome of such potential claims, and we cannot assure you that
      the
      relevant authorities will resolve the potential claims in our favor. We also
      cannot assure you that an unfavorable resolution of a claim will not have a
      material adverse effect on our business or financial results. In particular,
      there has been significant litigation in the data storage industry relating
      to
      infringement of patents and other intellectual property rights. We cannot assure
      you that future intellectual property claims will not result in litigation.
      If
      another party were to establish infringement, dilution, misuse, misappropriation
      or any other intellectual property rights violation, we or our joint ventures
      might have to pay substantial damages, or courts might enjoin us from
      developing, marketing, manufacturing and selling the infringing products in
      one
      or more countries. In addition, the costs of engaging in intellectual property
      litigation can be substantial regardless of outcome. If we seek licensure for
      intellectual property that we cannot otherwise lawfully use, we cannot assure
      you that we will be able to obtain such licensure on satisfactory terms. We
      might not own intellectual property that we believe we own or that we need
      in
      order to successfully research, develop and license our technology.





RISKS
      RELATED TO OUR COMMON STOCK





THE
      MARKET FOR OUR COMMON STOCK MAY BE ILLIQUID





Historically
      the trading volume of our common stock has been very low. There can be no
      assurance that volumes will increase to a consistently higher level or that
      holders of the shares will be able to sell their shares in a timely manner
      or at
      all.





WE
      MAY
      EXPERIENCE VOLATILITY IN OUR COMMON STOCK PRICE





The
      stock
      market and especially the stock prices of technology companies have been very
      volatile. This volatility may not be related to the operating performance of
      the
      companies. The broad market volatility and industry volatility may reduce the
      price of our common stock without regard to our operating performance. The
      market price of our common stock could significantly decrease at any time due
      to
      this volatility. The uncertainty that results from such volatility can itself
      depress the market price of our common stock.





We
      do not
      expect to generate cash flow from operations for the foreseeable future.
      Consequently, we will be required to raise additional capital against the
      issuance of equity which will cause dilution to existing shareholders. There
      is
      no assurance that we will be successful in raising additional capital under
      acceptable terms.


-
            15
            -




DOUBT
      ABOUT OUR ABILITY TO CONTINUE OPERATIONS AS A "GOING CONCERN"; YOU MAY LOSE
      ALL
      OF YOUR INVESTMENT IF WE ARE UNABLE TO CONTINUE OPERATIONS





Our
      ability to continue as a going concern is subject to substantial doubt given
      its
      current financial condition and requirements for additional funding. There
      can
      be no assurance that we will be able to obtain sufficient funds to continue
      the
      development of and, if successful, to commence the sale of our products and
      services under development. As a result of the foregoing, we anticipate that
      our
      auditors will express substantial doubt about our ability to continue as a
      going
      concern. If we cannot continue as a going concern, then you may lose all of
      your
      investment.





WE
      ARE
      CONSIDERED A PENNY STOCK





Our
      stock
      is characterized as a Penny Stock which has a huge adverse effect on the price
      and liquidity of our stock. The regulations relating to penny stocks limit
      the
      ability of broker-dealers to sell our common stock and thus affect the ability
      of shareholders to sell their common stock in the secondary market which may
      have a material adverse effect on the price of our stock.





INVESTORS
      WHO NEED IMMEDIATE OR FUTURE INCOME SHOULD REFRAIN FROM THE PURCHASE OF OUR
      COMMON STOCK





We
      do not
      intend to pay dividends to the holders of our outstanding common stock in the
      foreseeable future. Investors who need immediate or future income by way of
      dividends from their investment should refrain from the purchase of our common
      stock.





**ITEM
      2.DESCRIPTION OF PROPERTY**





In
      the
      second quarter of 2005 we moved our operations from Brooklyn, NY to the UK
      at
      the address of:





195
      The
      Vale London W3 7QS,


United
      Kingdom Tel: +44 208 746


2018
      Fax:
      +44 208 749 8025.




-
            16
            -


We
      conduct R&D in the following locations:





LaDIS
      Ltd.


Id
      No. 3
      0 5 3 8 6 9 2


Legal
      address: 79060, Ukraine


L`viv-60,
      3 Naukova Str.


Tel.:
      +380 (322) 40-97-55


Mailing
      address: 79060, Ukraine


L`viv-60,
      p/o box 2682




V-technology,
      Ltd.


2027729000880


Address:
      RF, Moscow 117454


Vernadskii
      Prospect, 78, Building 7





Silicon
      Valley PLC


19
      Cavendish Square


London
      W1A 2AW





Turtle
      Technologies (India) Pvt Ltd


'Prayogashala',
      Auroville 605101


Tamil
      Nadu, India





**ITEM
      3. LEGALPROCEEDINGS**





We
      are
      not currently nor have ever been a party to any legal proceedings.





**ITEM
      4. SUBMISSIONOF MATTERS TO A VOTE**





During
      the fiscal year ended on June 30, 2005, there were no matters submitted to
      a
      vote of the Company's shareholders.




-
            17
            -


**PART
      II**





**ITEM
      5. MARKETFOR REGISTRANT'S COMMON
      STOCK**





As
      of
      June 30, 2005, the company had issued and outstanding 110,287,285 Common Shares.
      No preferred shares have been issued to date.





On
      April
      20, 2001, the Company's registration statement was rendered effective by the
      SEC. The Company's common stock has been listed on the NASD OTC Bulletin Board
      with the symbol of NMEN. The following table sets forth the range of high and
      low sale prices for our common stock for each full quarterly period for the
      fiscal year ended June 30, 2005.





FISCAL
      YEAR ENDING June 30, 2005





Quarter
            Low
            HighFirst
            .07
            .46Second
            .05
            .37Third
            .055
            .26Fourth
            .04
            .25




**ITEM
      5A. SELECTED FINANCIAL DATA**





The
      selected historical financial data presented below were derived from the
      Company's financial statements, which as of and for the year ended June 30,
      2005
      Audited by Morgenstern & Company and for the year ending June 30, 2004
      audited by N. Blumenfrucht.





June
                30, 2005
            
            
            June
                30, 2004Income
                from Operations
            
            
            0
            
            
            0Total
                Current Assets
            
            
            241,388
            
            $
            143,147Total
                Assets
            
            
            15,539,062
            
            
            15,147,078Total
                Current Liabilities
            
            
            136,393
            
            
            53,314Total
                Stockholders’ Equity
            
            
            15,539,062
            
            
            15,093,764




-
            18
            -


**ITEM
      6. MANAGEMENT'SDISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION**





FORWARD
      LOOKING STATEMENTS





Some
      of
      the information in this 8-K Report or the documents we incorporate by reference
      in this 8-K Report may contain forward-looking statements. You can identify
      forward-looking statements by the use of forward-looking language such as "will
      likely result," "may," "believes," "is expected to," "is anticipated to," "is
      forecasted to," "is designed to," "plans to," "predicts," "seeks," "estimates,"
      "projects," "intends to" or other similar words. Important factors that could
      cause actual results to differ materially from expectations
      include:





·
            Failing
                to produce a workable product.


·
            failure
                to raise sufficient capital to fund business operating
                plans;


·
            market
                conditions and demand for new optical storage Media development and
                storage technology;


·
            our
                competitors' ability to successfully develop new technologies to
                satisfy
                demand for data storage;


·
            difficulties
                in achieving sales, gross margin and operating expense targets based
                on
                competitive market factors;


·
            difficulties
                in competing successfully in the markets for new products with established
                and emerging competitors;


·
            difficulties
                with single source supplies, product defects or product
                delays;


·
            difficulties
                in forming and maintaining successful joint venture
                relationships;


·
            difficulties
                in obtaining, maintaining and using intellectual property
                protections;


·
            changes
                in data storage technological protocols and
                standards;


·
            difficulties
                in state, federal, foreign and international regulation and licensing
                requirements;


·
            litigation
                actions by directors, employees, investors and
                others;


·
            limited
                operation and management history;


·
            dependence
                on key personnel;


·
            Inability
                to conclude the relationship as outlined in the letter of intent
                executed
                with E-World and Eros into definitive
                agreements.


·
            other
                factors discussed in this 10K
                Report





See
      Also
      Risk Factors in Item 1 under Business.





We
      are a
      development stage company currently engaged in the development of our
      proprietary technology, VMD, a next generation, high capacity storage discs
      as
      described in the "Business" description. We have generated no revenues to
      date.




-
            19
            -




We
      have
      entered into agreements with V-Tech, LaDIS and Silicon Valley Plc. For the
      research and development of the prototypes and Commercializing the Products.
      V
      Tech consists of a unique scientific and entrepreneurial team with many years
      of
      experience in optical storage Media development and specifically multi-layer
      technology. All intellectual property, patents, equipment, know-how and products
      developed by V-Tech, LaDis and Silicon Valley Plc. belongs to us. The overall
      management of our Company is carried out from our headquarters in the UK.
      Silicone Valley Plc. and V Tech are related parties. See Related Party
      Transactions # 3 and 6. See also LaDis Agreement Exhibit 2 to 10K
      Report.





As
      of
      September 30, 2004 we have completed the initial first-generation product
      prototype of prerecorded 120 mm Red Laser 20GB VMD (Multilayer Video Disc),
      providing 180 minutes of High-Definition (1080i) Video Content in full MPEG-2
      format. During the second quarter we achieved six layers yielding 30GB of
      storage capacity with bit rates up 60 Mbs maximal, capable of playing High
      Definition content for both HDTV and Digital Cinema on a single VMD Player.
      We
      have conducted a series of road shows across the globe to demonstrate the VMD
      products to select groups at CEBit, Germany in the UK, India and the
      US.





The
      company plans to begin to gear up for production of VMD discs in the fourth
      quarter 2005. In order to do so, the company will need to raise additional
      capital to finance the manufacturing facility and engineering
      teams.





On
      June
      23, 2005, the Company converted the following outstanding obligations owed
      to
      two of its principal shareholders into The Common stock of the company. May
      Ltd.
      $87,000 debt converted into 1,740,000 Common shares TriGM Ltd. $87,000 debt
      converted into 1,740,000 Common Shares. See Related Party Transactions # 9.
      See
      also Incorporation by reference Exhibit 7.





On
      June
      24, 2005, New Medium Enterprises, Inc. entered into a strategic agreement with
      Eros Media Ltd, a leading distributor of Bollywood movies worldwide and
      mainstream western media in India. See Incorporation by reference Exhibit
      9.




On
      June
      25, 2005, New Medium Enterprises, Inc. and E-World Technology Co. Ltd. Executed
      a Memorandum of Intent to form a joint R&D program for the production of a
      disc player which will incorporate/ combine EVD and VMD technologies. See
      Incorporation by reference Exhibit 10.





Plan
      of
      Operations for the next 12 months





The
      company's management plans to pursue an active policy towards growth and the
      creation of revenue through means of strategic alliances, joint ventures and
      acquisitions within the realm of content providers, manufactures, replicators
      and drive manufacturing OEMs.




-
            20
            -
  In
      the
      next twelve months, we plan to work towards finalizing the Letters of Intent
      with E-World and executing the agendas as described.





NME
      Inc
      and E-World have been in dialogue since the beginning of the year, and are
      working towards finalizing a definitive agreement for a commercial partnership
      to exploit NME's VMD technology under which the objective is for E-World to
      adopt VMD for the Chinese market and upgrade their standard EVD player to read
      VMD discs.





E-World
      is one of China's largest DVD and consumer electronics design companies. They
      own EVD, a technology that currently includes a lower quality High Definition
      optical disc and player format validated by the Chinese Government for the
      Chinese market. E-World's EVD and other technologies are DVD 'red laser' based
      as they see it as the current market standard.





E-World
      is currently seeking expansion funding and has aspirations to trade outside
      of
      mainland China.





We
      are
      seeking growth funding and are keen to expand in to Far Eastern and other
      emerging DVD markets.





E-World
      provides its customers with one-stop DVD based products and services such as
      software development, hardware design and system integration. The Company's
      current main products are special EVD chips developed in conjunction with US
      companies as LSI Logic (LSI), ST Microelectronic, and Sigma
      Designs.





E-World
      owns EVD key technologies and the EVD trademark. The company has applied for
      29
      items technology patents related to EVD of which 9 items have already acquired
      authorization and 20 are pending. An additional 40 items are being prepared
      for
      application.




The
      company's aim is to make high definition multimedia entertainment possible
      and
      affordable while allowing the partners upstream (content owners) and downstream
      (player manufacturers and content distributors) to maintain good profit margins.
      By using the current generation red lasers and current technology disc media,
      E-World recognized that red laser based disc formats were currently the only
      consumer affordable format able to make full use of High Definition Capable
      Televisions such as most Plasma Displays and LCD TV's as well as some Projection
      TV's and CRT's. This makes the EVD, and by agreement, VMD formats a very
      attractive and cost effective product for any markets where there is a high
      penetration or growing sales of HD capable TV.





Foreign
      control of core intellectual property has been a major problem restricting
      the
      development of the DVD industry of China for many years. Foreign companies
      mastered and control the kernel technology, and Chinese enterprises have been
      restricted to the role of only being the factories. The country's industry
      has
      hoped to develop its own kernel technology and set up new industrial standards
      to control its own fate. EVD became that solution, licensed for production
      in
      February 2005.




-
            21
            -
  The
      business combination would allow E-World to expand overseas whilst enhancing
      it's EVD red laser standard with VMD's compatible technology, gaining much
      greater capacity, NME's Western World momentum and potential
      markets.





E-World,
      China





NME
      Inc.
      has signed a Memorandum of Intent with E-World Technology Co., Ltd, a Chinese
      public listed company engaged in the development of electronic chip and board
      technology. E-world is the developer of EVD which is currently selling in China.
      Under the parameters of the agreement NME Inc. and E-world will collaborate
      on
      R&D to develop a dual EVD/VMD player.





E-world
      will have access to the VMD technology in China, royalty free while NME Inc.
      will be free to market the player technology to the rest of the world, and
      charge a royalty for it.





NME
      Inc.
      will also grant E-World the right to produce VMD optical discs in China under
      the Brand of EVD.





For
      such
      a right NME Inc. will have the right to royalty payments as will be agreed
      by
      separate agreement. E-World has agreed to place an order of 100,000 VMD discs
      from NME Inc. for pilot marketing work in China for 2005 subject to the positive
      result of the aforementioned R&D collaboration.





The
      parties are working towards establishing a joint international Marketing company
      operating from a jurisdiction outside of China, to market VMD and EVD products,
      including the players, compression technologies, audio systems, VMDs and the
      HD
      digital cinema systems.





Additionally,
      E-World will also allow NME to act as a marketing channel for E-World products
      in other world markets.




While
      negotiations are ongoing and look favorable, there is no assurance that there
      will be a successful conclusion to these negotiations and that the company
      will
      achieve its stated objectives in this relationship as enumerated above. As
      with
      any negotiations there is always the possibility of differences developing
      in
      the fine points that may hamper a successful conclusion to this
      relationship.




-
            22
            -


Eros,
      India





Bollywood
      is the most prolific film industry in the world. Eros is the single largest
      International distributor of Bollywood films worldwide with over 70% market
      share in the business. It has distributed some of the biggest Bollywood
      blockbusters of all times - Dil Se, Hum Aapke Hain Kaun, Taal, Saath Hain,
      Dilwale Dulhaniya Le Jayenge to name a few. Eros's content library includes:
      approximately 2,000 Indian film titles approximately 20,000 Indian music and
      dance videos documentaries, sport and other genres.





According
      to the Letter of Intent executed with Eros, see Exhibit 10, Eros will have
      rights to use VMD to distribute all the above content plus any new movies
      acquired or produced by Eros and plans to do this on 500,000 VMD discs later
      this year. Eros plans to show its movie Shabd at the Cannes film festival in
      High Definition on a VMD disc and corresponding VMD drive.





The
      other
      key terms of the agreement are; Eros has the right to showcase all of its
      content on VMD optical discs in high definition (HD) to promote itself and
      its
      content to the market. Eros will commercialize at its own expense 50 blockbuster
      Bollywood titles for 2005. These expenses will include: manufacturing of the
      VMD
      discs stamping the content onto the discs distribution and marketing of HD
      Bollywood movies on VMD Eros will place an order for 500,000 VMD discs (50
      films, 10,000 each) for Christmas 2005, with a mutually agreed replicator.
      Eros
      has taken a 5% stake in our Company.





Short
      Term





We
      anticipate the next stage of growth for the Company is securing the current
      bridgehead with partners and with funding in place the bring VMD to market:
      Conclude funding round and orchestrate pilot launch Early sales of content
      on
      VMD discs with content partners. In order to execute the planned agenda with
      E-World, we will be required to raise $5 Million in additional capital. See
      Also
      Subsequent Events Regarding the $1,500,000 recently raised in the sale of
      unregistered securities. According to E-world it is seeking $8.5m funding for
      growth expansion, which it anticipates will raise the revenues from $4.3m to
      $13.0m in the next financial period. We are seeking to raise an additional
      $3.5m
      to compliment the $4.0m already raised through investment and partner’s
      facilities. There is no assurance that we and or E-world will be successful
      in
      raising additional funds.





Medium
      Term





Provided
      we are successful at our Short Term agenda, we anticipate the focus will change
      to support much larger and wider scale operations in support of its partners
      and
      licensees, establishing VMD as the key content delivery and data storage
      platform in target markets: Building partners and channels for scalability
      through licensing Securing relationships with other OEMs, (for future HD
      markets) Providing support and marketing operations with partners in target
      markets and regions Licensing VMD to a major blank disc replicator for the
      PC
      market To have VMD firmware upgrade technology installed as standard in all
      new
      DVD players being produced for key markets.




-
            23
            -


Long
      Term





As
      market
      penetration increases in each region, the Company's priorities will emphasize
      bringing in key people to support an international development, licensing and
      brand marketing business, and with an underlying strategy for acquisition from
      this forward.





Liquidity
      and Capital Resources





On
      June
      30, 2005, we had available in cash the sum of $196,529. See also additional
      financing we secured in subsequent events item #14.





During
      the Fiscal year ending June 30, 2005, the company raised funds through warrant
      exercise and private equity transactions from various investors:





1.
            During
                the first quarter we generated $62,500 from warrant exercise
                proceeds.





2.
            In
                August 2004 the Company issued 5,000,000 common shares to an individual
                in
                exchange for $1,000,000. See Incorporated by Reference Exhibit
                1.





3.
            During
                the second quarter we generated $100.000 from warrant exercise
                proceeds.





4.
            On
                April 7, 2005 the Company received $200,000 investment from an accredited
                investor, May Ltd. an affiliate of the Company. The company issued
                10,000,000 Million common shares to the Investor at $0.02 cents (Two
                Cents) per share. See also Related Party Transactions. See also
                Incorporated by Reference Exhibit
                3.





5.
            On
                June 14, 2005 the company received $400,000.38 investment from an
                accredited investor. The company is issuing 5,804,594 common shares
                to the
                Investor at a price of $0.0689 cents per share. See also Incorporated
                by
                Reference Exhibit 5.




We
      intend
      to meet our long-term liquidity needs through available cash and cash flow
      as
      well as through additional financing from outside sources. We anticipate raising
      additional funds from the possible exercise of outstanding warrants or equity
      financing with private investors. As of June 30, 2005 no agreements have been
      undertaken to obtain any funding. The warrants are exercisable at price ranges
      from $.25 per share to $1.50 per share. The company does not expect that
      warrants will be exercised if the prevailing price of the stock at such time
      of
      exercise is below or at the exercise price.





We
      are
      currently in discussions with several possible sources of funds. Outside Of
      the
      investment of $1,500,000 described in Subsequent Events, #14, no new agreements
      have been entered into. There is no assurance that the company will enter into
      an agreement for funding, or that funding will be available at an acceptable
      cost of funds. In the event the company is unable to raise the necessary funds,
      it will be forced to significantly curb its activities in order to preserve
      its
      capital.




-
            24
            -


**ITEM
      7. FINANCIALSTATEMENTS**






***MORGENSTERN
      & COMPANY, CPA’s, P.C.***


*CERTIFIED
      PUBLIC ACCOUNTANTS*


40
      Exchange Place, Suite 1820


New
      York,
      NY 10005


TEL:
      (212) 925-9490


FAX:
      (212) 226-9134


E-MAIL:
      MORGENCPA@CS.COM





The
      Board
      of Directors and Stockholders


New
      Medium Enterprises, Inc.





We
      have
      audited the accompanying consolidated balance sheet of New Medium Enterprises,
      Inc. (A development stage company) as of June 30, 2005 and the related
      statements of operations, stockholders’ equity and cash flows for the year ended
      June 30, 2005. These financial statements are the responsibility of the
      Company’s management. Our responsibility is to express an opinion on these
      financial statements based on our audits.





We
      conducted our audit in accordance with standards of the Public Company Oversight
      Board (United States). Those standards require that we plan and perform the
      audit to obtain reasonable assurance about whether the financial statements
      are
      free of material misstatement. An audit includes examining, on a test basis,
      evidence supporting the amounts and disclosures in the financial statements.
      An
      audit also includes assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall financial
      statement presentation. We believe that our audits provide a reasonable basis
      for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of New Medium Enterprises, Inc. as
      of
      June 30, 2005 and the results of its operations and cash flows for the year
      ended June 30, 2005 in conformity with accounting principles generally accepted
      in the United States.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As shown in the financial statements, The
      Company has incurred net losses since its inception and has experienced severe
      liquidity problems. Those conditions raise substantial doubt about its ability
      to continue as a going concern. The financial statements do not include and
      adjustments that might result from the outcome of this uncertainty.








/s/
      Morgenstern & Company, CPA’s, P.C.


Certified
      Public Accountants








New
      York,
      NY


October
      21, 2005





-
            25
            -





New
      York,
      NY


October
      21, 2005




N.
      Blumenfrucht


1040
      East 22nd Street


Brooklyn,
      NY 11210


Tel
      - 718-692-2743


Fax
      - 718-692-2203





The
      Board
      of Directors and Stockholders


New
      Medium Enterprises, Inc.








We
      have
      audited the accompanying balance sheets of New Medium Enterprises, Inc. (A
      development stage company) as of June 30, 2004 and 2003 and the related
      statements of operations, stockholders' equity and cash flows for the period
      August 2, 1999 (inception) through June 30, 2004. These financial statements
      are
      the responsibility of the Company's management. Our responsibility is to express
      an opinion on these financial statements based on our audits.





We
      conducted our audits in accordance with standards of the Public Company
      Oversight Board (United States) Those standards require that we plan and perform
      the audit to obtain reasonable assurance about whether the financial statements
      are free of material misstatement. An audit includes examining, on a test basis,
      evidence supporting the amounts and disclosures in the financial statements.
      An
      audit also includes assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall financial
      statement presentation. We believe that our audits provide a reasonable basis
      for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of New Medium Enterprises, Inc as
      of
      the June 30, 2004 and 2003 and the results of its operations and its cash flows
      for the period August 2, 1999 through June 30, 2004 in conformity with
      accounting principles generally accepted in the United States.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. The Company is a development stage company
      and
      has had no significant income since inception, which raises substantial doubt
      about its ability to continue as a going concern. The financial statements
      do
      not include any adjustments that might result from the outcome of this
      uncertainty.







/s/
      N.
      Blumenfrucht CPA PC




Brooklyn,
      New York


August
      28, 2004


-
            26
            -




**NEW
      MEDIUM ENTERPRISES, INC.**


(A
      development stage company)


CONSOLIDATED
      BALANCE SHEET


For
      the
      years ending June 30, 2005 - June 30, 2004




June
                  30, 2005
              
              June
                  30, 2004**Assets**Current
                  assetsCash
                  and cash equivalents
              
              $
              196,529
              
              $
              103,930Investment
              
              
              --
              
              
              8,540Prepaid
                  expenses
              
              
              --
              
              
              30,667Escrow
                  deposits
              
              
              44,859
              
              
              --Total current assets
              
              
              241,388
              
              
              143,137Property
                  and equipment
              
              
              179,140
              
              
              158,040Less:
                  accumulated depreciation
              
              
              (65,326
              )
              
              (31,608
              )113,814
              
              
              126,432Intellectual
                  property
              
              
              15,183,860
              
              
              14,877,509**Total assets**
              
              $
              15,539,062
              
              $
              15,147,078**Liabilities and stockholders' equity**Current
                  liabilitiesAccrued
                  expenses
              
              $
              136,393
              
              $
              53,314Total current liabilities
              
              
              136,393
              
              
              53,314Commitments and contingenciesStockholders' equityPreferred
                  stock $.0001 par value, authorized 10,000,000 shares; none
                  issuedCommon
                  stock, $.0001 par value, authorized 200,000,000 & 100,000,000 shares,
                  issued and outstanding119,571,344
                  & 92,147,220 shares
              
              
              11,957
              
              
              9,215Additional
                  paid in capital
              
              
              18,827,404
              
              
              16,443,185Accumulated
                  other comprehensive (loss)
              
              
              (15,980
              )
              
              (11,658
              )Deficit
                  accumulated during the development stage
              
              
              (3,420,712
              )
              
              (1,346,978
              )Total stockholders’ equity
              
              
              15,402,669
              
              
              15,093,764**Total liabilities & stockholders' equity**
              
              $
              15,539,062
              
              $
              15,147,078
  The
      accompanying notes are an integral part of these financial
      statements.


-
            27
            -




**NEW
      MEDIUM ENTERPISES, INC.**


(A
      development stage company)


CONSOLIDATED
      STATEMENT OF OPERATIONS





For
                the PeriodsAccumulatedFor
                the year ended June 30, 2005
            
            
            For
                the yearended
                June 30, 2004
            
            
            From
                inception (August 2, 1999) through June 30, 2005Revenues
            
            $
            --
            
            $
            --
            
            $
            1,291Operating
                ExpensesGeneral
                and Administrative
            
            
            933,267
            
            
            94,460
            
            
            1,557,680Research
                and Development Costs
            
            
            971,290
            
            
            0
            
            
            1,533,867Officer's
                Compensation
            
            
            136,816
            
            
            62,000
            
            
            380,046Loss
                on Disposition
            
            
            0
            
            
            16,345Depreciation
            
            
            33,718
            
            
            31,608
            
            
            82,776Total
                Operating Expenses
            
            
            2,075,091
            
            
            188,068
            
            
            3,570,714Income
                (Loss) From Operations
            
            
            (2,075,091
            )
            
            (188,068
            )
            
            (3,570,714
            )Other
                IncomeInvestment
                Income
            
            
            1,557
            
            
            31,585
            
            
            148,911Loss
                Before Income Taxes
            
            
            (2,073,534
            )
            
            (156,483
            )
            
            (3,421,803
            )Income
                Tax
            
            
            200
            
            
            0
            
            
            200Net
                Loss
            
            
            (2,073,734
            )
            
            (156,483
            )
            
            (3,420,712
            )Loss
                Per Common Share - Basic and Diluted
            
            
            (0.02
            )
            
            (0.01
            )Weighted
                Average Number of Shares Outstanding
            
            
            84,543,598
            
            
            49,515,851





The
      accompanying notes are an integral part of these financial
      statements.





-
            28
            -





**NEW
      MEDIUM ENTERPISES, INC.**


(A
      development stage company)


STATEMENT
      OF CASH FLOWS





From
                inception
              (2-8-99)
                to 30-6-05
            
            As
                at June 30, 2005
            
            From
                inception
              (2-8-99)
                to 30-6-04**Cash
                flows from operating activities**Net
                loss
            
            $
            (3,420,712
            )
            $
            (2,073,734
            )
            $
            (1,346,978
            )Adjustments
                to reconcile net loss to net cash provided by operating activitiesDepreciation
                and amortization
            
            
            82,776
            
            
            33,718
            
            
            49,058Issuance
                of shares for acquisition of Intellectual property
            
            
            14,521,155
            
            
            
            
            
            14,521,155Write
                off of web site development costs
            
            
            314,302
            
            
            
            
            
            314,302Stock
                issued for services rendered
            
            
            715,761
            
            
            452,961
            
            
            262,800Loss
                of sale on securities
            
            
            (5,044
            )
            
            (5,044
            )Issue
                of shares for services rendered
            
            
            0Changes
                in assets and liabilities:Change
                in current assets
            
            
            (42,359
            )
            
            (14,192
            )
            
            (28,167
            )Change
                in security deposits
            
            
            0Change
                in current liabilities
            
            
            133,893
            
            
            83,079
            
            
            50,814Net
                cash used in operating activities
            
            
            12,299,772
            
            
            (1,523,212
            )
            
            13,822,984**Cash
                flows from investing activities**Proceeds
                from the sale of securities
            
            
            13,584
            
            
            13,584Purchase
                of fixed assets (including investments)
            
            
            0Exchange
                gain on shares
            
            
            0Purchase
                (write off) of fixed assets
            
            
            (196,590
            )
            
            (21,100
            )
            
            (175,490
            )Web
                site development costs/software asset
            
            
            (261,402
            )
            
            --
            
            
            (261,402
            )Investment
                in intellectual property
            
            
            (15,183,860
            )
            
            (306,351
            )
            
            (14,877,509
            )Investment
                purchased - net
            
            
            (20,198
            )
            
            --
            
            
            (20,198
            )Net
                cash provided by investing activities
            
            
            (15,648,466
            )
            
            (313,867
            )
            
            (15,334,599
            )**Cash
                flows from financing activities**Proceeds
                from sale of A, B, and C units
            
            
            1,716,250
            
            
            
            
            
            1,716,250Offering
                costs - private placements
            
            
            (69,625
            )
            
            
            
            
            (69,625
            )Deferred
                offering costs - registration statement
            
            
            (40,000
            )
            
            
            
            
            (40,000
            )Purchase
                of Treasury Stock
            
            
            (3,750
            )
            
            
            
            
            (3,750
            )Proceeds
                from sale of shares and warrants to various officers, founders, and
                investors
            
            
            1,946,670
            
            
            1,934,000
            
            
            12,670Issuance
                of shares for warrants exercised
            
            
            0Issuance
                of shares for services rendered
            
            
            0Proceeds
                from sale of shares
            
            
            0Net
                cash provided by financing activities
            
            
            3,549,545
            
            
            1,934,000
            
            
            1,615,545**Net
                increase (decrease) in cash and cash equivalents**
            
            
            200,851
            
            
            96,921
            
            
            103,930**Cash
                and cash equivalents, January 1**
            
            
            0
            
            
            103,930
            
            
            0**Cash
                and cash equivalents, March 31**
            
            
            200,851
            
            
            200,851
            
            
            103,930**SUPPLEMENTAL
                DISCLOSURES****:**Noncash
                investing and financing activitiesIssuance
                of common stock in exchange for services
            
            
            718,361
            
            
            452,961
            
            
            265,400Issuance
                of shares for acquisition of Intellectual property
            
            
            14,557,506
            
            
            306,351
            
            
            14,251,155





The
      accompanying notes are an integral part of these financial
      statements.





-
            29
            -





**NEW
      MEDIUM ENTERPISES, INC.**


(A
      development stage company)


STATEMENT
      OF STOCKHOLDERS' EQUITY


For
      the
      period July 1, 2003 - June 30, 2005





Common
                Stock
            
            Retained
                Additional
            
            Accumulated
                Earnings
            
            OtherPer
                Share Amount
            
            Shares
            
            Amount
            
            Paid-In
                Capital
            
            (Accumulated
                Deficit)
            
            ComprehensiveLoss
            
            TotalBalance
                July 1, 2003
            
            
            
            
            
            18,429,444
            
            $
            1,843
            
            $
            1,867,402
            
            $
            (1,190,495
            )
            
            11,519
            
            $
            690,269Issuance
                of shares to Officer - services rendered October 2003
            
            
            0.06
            
            
            1,112,000
            
            
            111
            
            
            61,889
            
            
            
            
            
            
            
            
            62,000Issuance
                of shares for purchase of assets. Of $
            
            
            0.20
            
            
            72,605,776
            
            
            7,261
            
            
            14,513,894
            
            
            
            
            
            
            
            
            14,521,155Comprehensive
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (23,177
            )
            
            (23,177
            )Net
                loss year ended June 30, 2004
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (156,483
            )
            
            
            
            
            (156,483
            )Balances
                June 30, 2004
            
            
            
            
            
            92,147,220
            
            
            9,215
            
            
            16,443,185
            
            $
            (1,346,978
            )
            
            (11,658
            )
            
            15,093,764Warrants
                exercised July & August 2004
            
            $
            0.25
            
            
            250,000
            
            
            25
            
            
            62,475
            
            
            
            
            
            
            
            
            62,500Issuance
                of shares - services rendered August 2004 $
            
            
            0.30
            
            
            100,000
            
            
            10
            
            
            29,990
            
            
            
            
            
            
            
            
            30,000Issuance
                of shares - services rendered August 2004
            
            
            0.40
            
            
            875,000
            
            
            88
            
            
            349,912
            
            
            
            
            
            
            
            
            350,000Sale
                of common shares - Investor August 2004 $
            
            
            0.20
            
            
            5,000,000
            
            
            500
            
            
            999,500
            
            
            
            
            
            
            
            
            1,000,000Issuance
                of shares - services rendered September 2004
            
            
            0.17
            
            
            6,315
            
            
            0
            
            
            1,074
            
            
            
            
            
            
            
            
            1,074Warrants
                exercised Oct. Nov. Dec. 2004
            
            
            0.25
            
            
            390,000
            
            
            39
            
            
            97,461
            
            
            
            
            
            
            
            
            97,500Issuance
                of shares - services rendered November & December 2004
            
            
            0.24
            
            
            18,215
            
            
            2
            
            
            4,385
            
            
            
            
            
            
            
            
            4,387Issuance
                of shares - services rendered January 2004 to May 2005
            
            
            0.05
            
            
            1,500,000
            
            
            150
            
            
            67,350
            
            
            
            
            
            
            
            
            67,500Sale
                of common shares to investor - May 2005
            
            
            0.02
            
            
            10,000,000
            
            
            1,000
            
            
            199,000
            
            
            
            
            
            
            
            
            200,000Conversion
                of outstanding debt
            
            
            0.05
            
            
            3,480,000
            
            
            348
            
            
            173,652
            
            
            
            
            
            
            
            
            174,000Sale
                of common shares to investor May 2005Stock
                issued August
            
            
            0.07
            
            
            5,804,594
            
            
            580
            
            
            399,420
            
            
            
            
            
            
            
            
            400,000Comprehensive
                Loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (4,322
            )
            
            (4,322
            )Net
              Loss year ending June 2005
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,073,734
            )
            
            
            
            
            (2,073,734
            )Balances
                June 30, 2005
            
            
            
            
            
            19,571,344
            
            $
            11,957
            
            $
            18,827,404
            
            $
            (3,420,712
            )
            $
            (15,980,000
            )
            $
            15,402,669




The
      accompanying notes are an integral part of these
      financial statements.




-
            30
            -





**NEW
      MEDIUM ENTERPRISES, INC.**


(A
      development stage company)


NOTES
      TO
      FINANCIAL STATEMENTS


JUNE
      30,
      2005





NOTE
      1 -
      FORMATION AND BUSINESS OF THE COMPANY





New
      Medium Enterprises Inc. (The "Company") was organized on August 2, 1999 in
      the
      State of Nevada under the name Shopoverseas.com, Inc. On July 10, 2000 the
      name
      was changed to New Medium Enterprises, Inc. The Company's original intention
      was
      to operate as an Internet based E-commerce Company. Several web sites were
      formulated whose purpose was the sale of various goods and services to both
      consumers and businesses. During a prior fiscal period management had decided
      to
      cease any further expenditures in regard to the web site and had written off
      the
      total cost in the prior period. The Company has acquired the rights to and
      is
      currently developing a new DVD format. As of September 30, 2004 the Company
      completed the initial first-generation product prototype of prerecorded 120
      mm
      Red Laser 20GB VMD (Multilayer Video Disc), providing 180 minutes of
      High-Definition (1080i) Video Content in full MPEG-2 format. During the second
      quarter the Company achieved six layers yielding 30GB of storage capacity with
      bit rates up 60 Mbs maximal, capable of playing High Definition content for
      both
      HDTV and Digital Cinema on a single VMD Player. As of the June 30, 2005 the
      Company had generated minimal revenues and is considered a development stage
      company. Management is pursuing additional capital through various
      methods.





NOTE
      2 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Principles
      of Consolidation





The
      financial statements include the accounts of New Medium Enterprises, Inc. and
      its subsidiaries. Intercompany transactions and balances have been eliminated.
      Equity investments in which we exercise significant influence but do not control
      and are not the primary beneficiary are accounted for using the equity method.
      Investments in which we are not able to exercise significant influence over
      the
      investee are accounted for under the costs method.





Foreign
      Currencies





Assets
      and liabilities recorded in foreign currencies are translated at the exchange
      rate on the balance sheet date. Revenue and expenses are translated at average
      rates of exchange prevailing during the year. Translation adjustments resulting
      from this process are charged or credited to Other Comprehensive Income
      (OCI).





Use
      of
      Estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amount of assets and liabilities, revenue and expenses
      as
      well as the disclosure of contingent assets and liabilities in the financial
      statement. Actual results could differ from those estimates.





-
            31
            -





Cash
      and
      Cash Equivalents





Cash
      and
      cash equivalents consists of cash, money market funds and other highly liquid
      investments with a maturity of three months or less from the date of purchase.
      The Company has not experienced any losses on its cash or cash
      equivalents.





Investments





Investments
      include marketable common stock securities traded on the stock exchange. The
      marketable securities are classified as available for sale, and are measured
      at
      fair value in the balance sheet. Unrealized gains and losses on investments
      are
      recorded net of tax as a separate component of stockholders' equity. Gains
      and
      losses on securities sold are determined based on the specific identification
      method.





Property
      and Equipment





Property
      and equipment are recorded at cost and depreciated or amortized over the
      estimated useful lives of the assets (three to seven years) using the
      straight-line depreciation method allowed by the Internal Revenue
      Code.





Intangible
      Assets





Intangible
      assets are amortized using the straight-line method over their estimated period
      of benefit, ranging from one to ten years. We evaluate the recoverability of
      intangible assets periodically and take into account events or circumstances
      that warrant revised estimates of useful lives or that indicate that impairment
      exists. All of our intangible assets are subject to amortization. No impairments
      of intangible assets have been identified during any of the periods
      presented.





The
      components of finite-lived intangible assets are as follows:





June
                30, 2005
            June
                30, 2004$15,183,860
            $14,877,508





Components
      of finite-lived intangible assets acquired during fiscal years
      ended





June
                30, 2005
            June
                30, 2004$306,351
            $14,877,509








-
            32
            -





The
      estimated future amortization expense related to intangible asset as of June
      30,
      2005 is as follows:





2006
            1,518,3862007
            3,036,7722008
            3,036,7722009
            3,036,7722010
            3,036,772





During
      the fiscal year ending June 30, 2004 there were "no impairments of the
      intangible assets since the company did not yet achieve a working prototype.
      As
      of June 30, 2005 the company, using outside consultants, performed extensive
      market analysis and research to determine that this property had the ability
      to
      generate revenues substantial enough to re-coup the cost of this property.
      This
      research indicated that the product had a finite once introduce into the market.
      The estimates for future amortization of this property were based upon this
      analysis. This research and analysis also was used as a basis for not recording
      any impairment as of June 30, 2005.





Revenue
      Recognition





The
      Company recognizes revenue on the accrual basis as the related services are
      provided to customers and when the customer is obligated to pay for such
      services. Revenue from product sales is recognized when title transfers to
      customers, primarily on shipment. For the years ended June 30, 2005 and 2004
      there were no significant revenues.





Research
      and Development





Research
      and development expenses include payroll, employee benefits, stock-based
      compensation, and other headcount-related costs associated with product
      development. We have determined that technological feasibility for our software
      products is reached shortly before the products are released to manufacturing.
      Costs incurred after technological feasibility is established are not material,
      and accordingly, we expense all research and development costs when
      incurred.





Loss
      Per
      Share





In
      accordance with Statement of Financial Accounting Standards No. 128, "Earnings
      Per Share", the computation of net loss per share is based upon the weighted
      average number of common shares issued and outstanding for the reporting period.
      Common stock equivalents related to options, warrants and convertible securities
      are excluded from the computation when the effect would be
      anti-dilutive.





-
            33
            -





Stock
      -
      Based Compensation





As
      permitted by Statement of Financial Accounting Standards No. 123, "Accounting
      for Stock Based Compensation" (SFAS 123). The Company continues to apply the
      accounting rules of APB No. 25. APB No. 25 measure compensation expenses on
      the
      first date at which both numbers of share and exercise price are known. Under
      the Company's plans this would typically be the grant date. To the extent that
      the exercise price equals or exceeds the market value on the date of the grant,
      no compensation expenses are reorganized under this accounting
      treatment.





NOTE
      3 -
      LIQUIDITY AND PROFITABILITY





As
      reflected in the accompanying financial statements, the Company incurred losses
      for the current and prior periods and expects to incur a loss in the upcoming
      fiscal period. Based upon the cash utilization rate and in order to maintain
      the
      Company for the following year, management will have to raise additional funds
      through equity and or debt financing. It is management's opinion that it can
      raise the needed capital.





NOTE
      4 -
      INVESTMENT IN INTELLECTUAL PROPERTY





On
      January 13, 2004, the Company acquired the business and all the intellectual
      property assets pertaining to a new DVD format from MultiDisk Ltd. and TriGM
      International SA. In connection with the acquisition the Company issued
      72,605,776 shares of its stock to the shareholders of MultiDisk and TriGM.
      These
      shares were valued at $14,521,155, which approximates the fair market value
      of
      the shares. The Company also paid additional fees in funding, legal and
      brokerage fees, which have been capitalized, part of these funds ($150,000)
      was
      allocated to Machinery and Equipment. The non-cash transactions in Note 4
      referred to in the comment were only supplemental disclosures.





Additionally,
      in connection with this acquisition the Company has agreed to undertake future
      payments of $174,000 after the successful raising of additional capital in
      the
      amount of $500,000.





On
      June
      23, 2005, the Company converted the following outstanding obligations owed
      to
      two of its principal shareholders into The Common stock of the company. May
      Ltd.
      $87,000 debt converted into 1,740,000 Common shares TriGM Ltd. $87,000 debt
      converted into 1,740,000 Common Shares. This reflects the payment of the
      $174,000.




-
            34
            -





NOTE
      5 -
      INCOME TAXES





The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards No. 109, (SFAS 109) "Accounting for Income Taxes." Under
      the asset and liability method, deferred income taxes are recognized for the
      tax
      consequences of "temporary differences" by applying enacted statutory tax rates
      applicable to future years to differences between the financial statements
      carrying amounts and the tax bases of existing assets and liabilities. Under
      SFAS 109, deferred tax assets may be recognized for temporary differences that
      will result in deductible amounts in future period. A valuation allowance is
      deferred tax asset will not be realized. As of June 30, 2005 the Company had
      a
      Federal and State tax net operating loss of approximately $991,000. The Company
      established a 100% valuation allowance equal to the net deferred tax assets,
      as
      the Company could not conclude that it was more likely than not that the
      deferred tax asset would be realized.





NOTE
      6 -
      WEB SITE DEVELOPMENT COSTS/SOFTWARE ASSET





The
      Company had incurred significant costs in the development of its web sites
      and
      e-commerce capabilities. Management had elected to treat all web site
      development costs under the guidance of the Emerging Issues Taxes Force (EITF).
      The EITF recommends following the guidelines of Statement of Position 98-1.
      Under SOP 98-1, software developed for internal use is capitalized during the
      development stage costs, which are capitalized and amortized. Certain costs
      in
      the amount of $245,000 were charged to research and development expense on
      the
      statement of operations in a prior period during the period ended June 30,
      2002,
      management had determined that the Web Site was o longer feasible and had
      written of the remaining balance and expensed it during that
      period.





NOTE
      7 -
      INVESTMENTS





The
      Company has purchased shares of publicly traded companies on the open market.
      These investments are shown at market value as of the balance sheet date.
      Unrealized gains and losses on investments are shown a separate component of
      stockholders equity.





No
      value
      has been assigned to these investments.





NOTE
      8 -
      COMMITMENTS AND CONTINGENCIES





The
      Company rents space from a related party on a month-to-month
      base.





-
            35
            -





In
      connection with the acquisitions the Company issued 72,605,000 shares of its
      stock to the shareholders of MultiDisk and TriGM. These shares were valued
      at
      $14,521,155, which approximated the fair market value of these shares.
      Additionally, the Company offered Series A warrant holders the right to lower
      the exercise price for $1.50 to $.25 a share in return for assigning six out
      of
      seven warrants to certain parties providing services to the Company in lieu
      of
      compensation. A total of 1,300,000 warrants were lowered to .25 cents exercise
      price. On July 18, 2003 the Board of Directors voted to extend the Series A,
      B,
      C, D and E warrants until July 2005.




According
      the acquisition agreement, MultiDisk
      Ltd and TriGM International, S.A. the Company was obligated to pay certain
      milestone payments amounting to $87,000 to each upon the raising of capital
      in
      excess of $500,000. Payment total $174,000. In August 2004 the Company entered
      into consulting agreement for consulting services. The Company paid a fee of
      $75,000 and issued 875,000 common shares the shares were valued at $.40, which
      approximates the fair market value of the shares at the date of
      issuance.





Legal
      Proceedings





There
      are
      no material legal proceedings to which the Company is a party to or which any
      of
      their property is subject.





Related
      Party Transactions





The
      Company rents space from a related party. Rent expense to the year ended June
      30, 2005 totaling $46,683. During the ordinary course of business the Company
      has obtained short-term working capital loans from both related parties and
      investors. There are no balances due as of June 30, 2005.





NOTE
      9
      -STOCKHOLDERS' EQUITY





The
      Company's authorized capital stock consists of 100,000,000 shares of common
      stock (par value of $.0001) and 10,000,000 shares of non-voting preferred stock
      (par value $.001).





The
      original par value had been $.001 per share. In January 2004 management voted
      to
      reduce the par value to $.0001 per share. The financial statements have been
      restated retroactively to recognize the new valuation.





The
      Company offered for sale 480 "A" units, 160 "B" units and 100 "C" units of
      its
      securities.





An
      "A"
      unit consisted of 10,000 shares of the Company's common stock, and 10,000 Class
      A warrants. Each Class A warrant entitled the warrant holder to purchase one
      share of the Company's common stock at $1.50. The warrants were to expire July
      31, 2002. Each unit sold for $5,000. The warrants were extended to July 31,
      2003.





A
      "B"
      unit consisted of 5,000 shares of the Company's common stock, and 7,500 Class
      B
      warrants. Each Class B warrant entitled the warrant holder to purchase one
      share
      of the Company's common stock at $1.00. The warrants were to expire July 31,
      2002. Each unit sold for $3,750. The warrants were extended to July 31,
      2003.





-
            36
            -





A
      "C"
      unit consisted of 10,000 shares of the Company's common stock, and 10,000 Class
      D warrants. Each Class D warrant entitled the warrant holder to purchase one
      share of the Company's common stock at $1.25. The warrants were to expire July
      31, 2002. Each unit sold for $12,500. The warrants were extended to July 31,
      2003.





On
      August
      20, 1999 the Company sold to various investors and officers 12,620,000 shares
      of
      common stock, 3,080,000 Class A warrants (exercisable at $1.50 per share),
      330,000 class B warrants (exercisable at $1.00 per share), and 2,580,000 class
      C
      warrants (exercisable at $.50 per share). Total consideration received was
      $12,670.





On
      September 2, 1999 the Company sold through a private placement 251 Class A
      units
      for a total gross consideration of $1,255,000 and 52 B units for a total gross
      consideration of $195,000.





In
      January 2000 the Company sold, through a private placement, 21.3 C units for
      a
      total gross consideration of $266,250.





The
      Company incurred costs in regard to the SB registration totaling $40,000. These
      have been charged against additional paid in capital. Additionally, the Company
      incurred costs in regard to the private placements totaling $69,625. These
      have
      also been charged against additional paid in capital.





The
      Company issued common stock to various individuals and companies in return
      for
      services rendered. During the period ended June 30, 2000 50,000 common shares
      were issued to various suppliers of services.





These
      shares were valued at $25,000, which approximates the value of the services
      rendered. In September 2000 and May 2001 the Company issued 60,000 common shares
      for services rendered to Stratagram.





In
      October 2000 the Company purchased 3,750,000 common shares from some of its
      original investors for $3,750. The Company issued to these shareholders: 200,000
      warrants exercisable at $.75 per share and 300,000 warrants exercisable at
      $1.00
      per share. The 3,750,000 common shares were returned t the Company's
      treasury.





On
      October 3, 2001 the Company issued 4,444,444 common shares to its president
      for
      services rendered. These shares were valued at $150,000, which represents the
      fair market value of the shares at the date of issuance. The statement of
      operations was charged in the current period for this amount.





During
      April 2002 the Company issued shares to a concern, which had rendered services
      on behalf of the Company. These shares were valued at $500, which represents
      the
      fair value at the date of issuance and have been charged to the statement of
      operations.





On
      October 2001 the Company issued 8,000,000 non-qualified stock
      options.





-
            37
            -





On
      March
      31, 2003 the Company issued 2,000,000 common shares to its president for
      services rendered. These shares were valued at $50,000, which represents the
      fair market value of the shares at the date of issuance. The statement of
      operations was charged in the current period for this amount.





On
      March
      31, 2003 the Company issued 10,000 shares to a consultant who had rendered
      services on behalf of the Company. These shares were valued at $300, which
      represents the fair market value at the date of issuance and have been charged
      to the statement of operations.





On
      October 2003 the Company issued 1,112,000 common shares to its president for
      services rendered. These shares were valued at $62,000, which represents the
      fair market value of the shares at the date of issuance. The statement of
      operations was charged in the current period for this amount.





In
      January 14, 2004 the Company voted to raise the authorized common shares from
      100,000,000 to 200,000,000 and changed the par value to $.0001 per
      share.





On
      July
      22, 2004 the Company issued 100,000 shares to a consultant. The shares were
      valued at 30,000.





On
      July
      22, 2004 the Company issued 100,000 shares to a warrant holder against receipt
      of $25,000 in Warrant Exercise proceeds. Shares were valued at
      25,000.





On
      August
      5, 2004 the Company issued 150,000 shares to a warrant holder against receipt
      of
      $37,500 in Warrant Exercise proceeds. Shares were valued at 37,500.





On
      August
      11, 2004 the Company issued 555,000 shares to a shareholder part of the
      acquisition group which shares should have been issued on January 14 along
      with
      the other issuances. Valuation of the shares was included in the calculations
      of
      January 14, 2004 for an aggregate of $14,521,155.





On
      August
      6, 2004 the Company entered into a Consulting Agreement with Business Plans
      Ltd.
      for consulting services pertaining to strategic planning, business management,
      marketing, strategic alliances, and industry contacts. The company paid a fee
      of
      $75,000 and issued 875,000 on August18 as of August 6. Shares were valued at
      350,000.





On
      September 14, 2004 the Company issued 6,315 shares to a consultant. Shares
      were
      valued at 1,074.





On
      November 4, 2004 the Company issued 100,000 shares to a warrant holder against
      receipt of $25,000 in Warrant Exercise proceeds. Shares were valued at
      25,000.





On
      November 8, 2004 the Company issued 7,500 shares to a consultant. Shares were
      valued at 1,875.





-
            38
            -





On
      November 29, 2004 the Company issued 100,000 shares to a warrant holder against
      receipt of $25,000 in Warrant Exercise proceeds. Shares were valued at
      25,000.





On
      December 2, 2004 the Company issued 100,000 shares to a warrant holder against
      receipt of $25,000 in Warrant Exercise proceeds. Shares were valued at
      25,000.





On
      December 10, 2004 the Company issued 90,000 shares to a warrant holder against
      receipt of $25,000 in Warrant Exercise proceeds. Shares were valued at
      25,000.





On
      December 23, 2004 the Company issued 11,250 shares to a consultant. Shares
      were
      valued at 1,812.





On
      May 9,
      2005 the Company issued 1,500,000 common shares to its former CEO, Ethel
      Schwartz for services rendered from January 2004, until May 2005, in lieu of
      cash salary. Shares were valued at $67,500.





On
      May
      10, 2005 the Company issued 10,000,000 common shares to May Ltd. against receipt
      of $200,000. May Ltd. is an affiliate of the company, see Related Party
      Transactions.





On
      June
      23, 2005, the Company converted the following outstanding obligations owed
      to
      two of its principal shareholders into the common stock of the company. May
      Ltd.
      $87,000 debt converted into 1,740,000 common shares TriGM $87,000 debt converted
      into 1,740,000 common shares. Shares were valued at $87,000 for each
      issuance.





On
      June
      14, 2005 the company received $400,000.38 investment from an accredited
      investor. The company is issuing 5,804,594 common shares to the investor at
      a
      price of $0.0689 cents per share valued at $278,629. Shares were issued on
      August 18, 2005 as of June 14, 2005. The investor will have the right to
      exercise 2,000,000 common shares at the price of $.10 cents per share within
      180
      days from June 9, 2005.





In
      connection with the acquisition the Company issued 72,605,776 shares of its
      stock to the shareholders of MultiDisk and TriGM. These shares were valued
      at
      $14,521,155, which approximated the fair market value of these shares.
      Additionally, the Company offered Series A warrant holders the right to lower
      the exercise price for $1.50 to $.25 a share in return for assigning six out
      of
      seven warrants to certain parties involved in the abovementioned acquisition.
      These warrants were transferred in lieu of compensation for services rendered.
      A
      total of 1,300,000 warrants were transferred.





No
      preferred shares have been issued. It is within the discretion of the Board
      of
      Directors to determine the preferences of the preferred stock. The Company
      has
      not yet determined the preferences of the preferred stock.




-
            39
            -





NOTE
      10 -
      SUBSEQUENT EVENTS





On
      August
      18, 2005 the Company issued 1,000,000 shares to Mahesh Jaranayaranan our CEO
      who
      allocated 750,000 of these shares to affiliates and various family members.
      Shares were valued at $100,000.





On
      August
      18, 2005 the Company issued 84,768 to Quoros Limited for services rendered.
      Shares were valued at $8,476.





On
      August
      18, 2005 the Company issued to Eros Media Ltd. 5,515,354 pursuant to an
      agreement into by and between Eros Media Ltd. and New Medium Enterprises, Inc.
      Shares were valued at $551,535.





On
      September 15, 2005 as of June 28, the Company issued 915,080 to the
      pre-acquisition shareholders for their contribution of approximately $46,000
      in
      excess funds over and above the required amount of $589,500. Shares valued
      at
      $46,000.





On
      September 20, 2005 the Company issued 250,000 shares to its COO for services
      rendered. Shares were valued at $25,000.





On
      September 20, 2005 the Company issued 250,000 shares to its CFO for services
      rendered. Shares were valued at $25,000.





On
      September 20, 2005 the Company issued 250,000 shares to its Chairman for
      services rendered. Shares were valued at $25,000.





On
      September 20, 2005 the Company issued 250,000 shares to its Treasurer for
      services rendered. Shares were valued at $25,000.





On
      September 20, 2005 the Company issued 1,000,000 shares to its CEO for services
      rendered. Shares were valued at $100,000.





On
      September 20, 2005 the Company issued 2,000,000 shares to Andrew Danenza, a
      consultant to the Company. Mr. Danenza is the son of Ann Kallgren who is an
      affiliate of the company. Shares were valued at $200,000.





On
      September 20, 2005 the Company issued 2,000,000 shares to Eugene Levich, the
      CTO
      for services rendered. Shares were valued at $200,000.





On
      September 20, 2005 the Company issued 350,000 shares to seven parties for
      services rendered. Shares were valued at $35,000.




-
            40
            -





On
      September 15 and 20, 2005 the Company has issued 7,500,000 common shares at
      $0.10/share to one investor and 5,000,000 common shares at $0.15/share to the
      other. For each issuance of equity instruments for services provided, the
      valuation of the issuances represents the fair market value of the shares at
      the
      date of issuance and has been charged to the statement of operations. The equity
      issuances to management do not have a compensatory component as the management
      are employed by the company and have their own compensation as per their service
      contracts. These initial issuances are further inducements for management to
      join a non - commercialized product entity and add to their punitive
      compensation packages.





In
      accordance with FASB issued SFAS No. 123R all "Share-Based Payment," are
      measured and recognizes as compensation expense for all stock-based payments
      at
      fair value. The Company has also awarded liability instruments that required
      employee and consultants to provide services over a requisite period. All of
      these issuances were also valued at fair value.





NOTE
      10 -
      SUBSEQUENT EVENTS OTHER





Subsequent
      Events Other:





1.
            July
                31, 2005 the Board of Directors voted to extend the Series A and
                Series C
                warrants until July 31, 2006. The Series B, D, and E have
                expired.





2.
            On
                August 4, 2005 the Company signed a new lease, commencing October
                1, 2005,
                calling for a month-to-month rent of approximately
                $4,680.





Off-Balance
      Sheet Transactions:





We
      have
      not entered into any Off Balance Sheet transactions as of
      6-30-2005.





**ITEM
      8. CHANGESIN & DISAGREEMENTS WITH ACCOUNTING AND
      FINANCIAL DISCLOSURES**





On
      October 9, N. Blumenfrucht CPA PC resigned as auditor. On October 12, the
      Auditing firm of Morgenstern & Company was appointed as our independent
      auditor. Morgenstern & Company conducted the audit for the fiscal year
      ending 2005. There were no disagreements with Mr. Blumenfrucht as per 8K filing,
      see Subsequent Events item 16.





**ITEM
      8A.FINANCIAL CONTROLS &
PROCEDURES**





The
      Company's Chief Executive Officer (CEO) periodically reviews the design and
      effectiveness of its disclosure controls and internal controls, and their
      associated procedures, over financial reporting. The CEO makes modifications
      to
      improve the Company's disclosure controls and internal control structure, and
      may take corrective action, if such reviews identify a need for such
      modifications or actions.




-
            41
            -





A
      control
      system, no matter how well conceived and operated, can provide only reasonable,
      not absolute, assurance that the objectives of the control system are met.
      Further, the design of a control system must reflect the fact that there are
      resource constraints, and the benefits of controls must be considered relative
      to their costs. Because of the inherent limitations in all control systems,
      no
      evaluation of controls can provide absolute assurance that all control issues
      and instances of fraud, if any, within the Company have been detected. These
      inherent limitations include the realities that judgments in decision-making
      can
      be faulty, and that breakdowns can occur because of simple error or
      mistake.





Additionally,
      controls can be circumvented by the acts of some persons, or by management
      override of the control. The design of any system of controls also is based
      in
      part upon certain assumptions about the likelihood of future events, and there
      can be no assurance that any design will succeed in achieving its stated goals
      under all potential future conditions; over time, controls may become inadequate
      because of changes in conditions, or the degree of compliance with the policies
      or procedures may deteriorate. Because of the inherent limitations in a
      cost-effective control system, misstatements may occur and not be detected,
      especially as a result of operational activities occurring in countries outside
      of the USA.





During
      the quarter ending December 31, 2004 we have evaluated, with the participation
      of the Company's former CEO and the Company's Treasurer who was up until June
      21, 2005 Chairman of the Board of Directors the effectiveness of our disclosure
      controls and procedures as of December 31, 2004. Since August, with the
      re-establishment of the Company's UK office, the Treasurer and Chairman in
      the
      UK office handles the Company's funds and disbursements out of the UK office,
      formerly handled by our CEO. In the course of the audit for the previous
      quarter, the Company's former CEO identified certain areas in the authorization,
      allocation and documentation of expenses administered out of the UK office
      that
      the Company's former CEO believed needed to be improved. As a result the
      Company's former CEO has disseminated procedures to strengthen the allocation,
      documentation, certification & authorization of expenses.





During
      the following quarter ending March 31, 2005 the Company continued to experience
      weakness in the enforcement of financial controls related to the allocation
      and
      authorization of disbursements of funds, and in conflict of interest issues.
      The
      Company has taken this matter seriously and has addressed these issues with
      the
      assistance and guidance of an attorney familiar with securities
      compliance.





The
      company is in research & development and is close to commercialisation but
      has not traded, and was involved in investing the funds generated from inward
      investments. As such, control procedures were at a reasonably assurance level
      for the minimum activities of the business. Control procedures have been
      enlarged following relocation of the company from New York to London and the
      ensuing increase in business activity.





Following
      the relocation of the office from New York to London we replaced the CEO and
      initiated the transition into a commercial entity. The new CEO reviewed and
      implemented the system of controls and procedures necessary for the change
      in
      business activities. The company now has cross-border activities with staff
      running these operations.





-
            42
            -








·
            Integrated
                system for the purchase of fixed assets, goods and services as per
                the
                attached flow chart.


·
            Defined
                more closely the segregation of duties among the
                staff.


·
            Formalised
                terms and conditions of employment for
                staff.


·
            Improved
                control over cost of business travel by centralising bookings of
                flights,
                trains, hotels, etc. by one member of staff subject to approval by
                the
                CEO.


·
            Standard
                expense form for staff to claim for expenses which are categorised
                and
                supported by receipts subject to approval by the
                CEO.


·
            Increase
                in monitoring and training of
                staff.


·
            Production
                of monthly management accounts and
                reports.


·
            Formalised
                the organisation of the company as per the attached
                chart.


·
            Installation
                of an approved accounting package which improved the system to ensure
                that
                all information required to be disclosed in the Exchange Act reports
                are
                accumulated and communicated to management in the manner that permits
                adequate time for the principal executive and financial officers
                to
                consider such information and allow timely decisions of such information
                required by disclosures.





Payments
      are also made in accordance with signed agreements for contractual obligations
      and services rendered. The internal controls were put in place from the
      3 rd and
      4 th quarters
      of 2005 following the company’s relocation to the UK.





The
      improvement in the control procedures as set out above gave management the
      assurance that the disclosure controls and procedures are effective as of the
      date of the end of the applicable reporting period. As a result, the principal
      executive and principal accounting officers conclude that the controls and
      procedures are effective to ensure that all information required to be disclosed
      in the Exchange Act reports are accumulated and communicated to management
      in a
      manner that permits adequate time for management, specifically the principal
      executive and financial officers, to consider such information and allow timely
      decisions of such information regarding the required disclosures.





**ITEM
      8B. OTHER**





None.




-
            43
            -


**PART
      III**





**ITEM
      9. DIRECTORSAND EXECUTIVE
      OFFICERS**




Name
            Age
            PositionRupert
                Stow
            82
            ChairmanMahesh
                Jaranayaran
            53
            CEO,
                DirectorDr.
                Eugene Levich
            57
            CATO,
                DirectorAlexander
                B. Hagerty
            24
            COOIrene
                Kuan
            49
            Treasurer,
                DirectorRahul
                Didi
            45
            Director





During
      the fiscal year ending June 30, 2005, the following changes were made to the
      management team: Ethel Schwartz, Alex Libin and Yehudit Hirsch resigned from
      their positions in May 2005. See Incorporated by Reference Exhibit 4. In June
      2005, the newly appointed Executive staff were named to the senior executive
      team. See Incorporated by Reference Exhibits 2, 6, and 11.





INFORMATION
      CONCERNING OFFICERS & DIRECTORS





APPOINTMENT
      OF RUPERT STOW AS CHAIRMAN, AND DIRECTOR





On
      June
      14, 2005 the board of Directors appointed Mr. Rupert Stow as Chairman and
      Director of New Medium Enterprises, Inc. For the past five years, Mr. Rupert
      Stow has been a consultant in the fields of digital television and HDTV,
      specializing in production systems analysis, market penetration and ROI. In
      his
      30-year career at CBS, he planned and monitored the introduction of Electronic
      Newsgathering, the Electronic Still Store, and a multi-cassette cartridge
      playback machine for news and commercials. For 20 years, he has been involved
      in
      HDTV program production, its economics, and the development of a single world
      standard for HDTV program production and international exchange. As Chair of
      the
      FCC's Advisory Committee on Advanced Television Services, Planning Subcommittee,
      Working Party on Economic Factors and Market Penetration, this work led directly
      to the completion of a North American Standard for the terrestrial transmission
      of programs in HDTV and other digital formats. During the space race, Stow
      developed an image dissector for the Lunar Orbiter; During the Cold War, the
      Luxicon camera tube for the USAF, and, during the World War, a bolometric camera
      tube for night time tank battles.




APPOINTMENT
      OF MAHESH JAYANARAYAN, AS CEO AND DIRECTOR





On
      June
      14, 2005, the Board of Directors appointed Mr. Mahesh Jayanarayan, as President
      and CEO of New Medium Enterprises, Inc. Mr. Jayanarayan, has served as a self
      employed Business and Technology consultant for the past ten years. During
      this
      time he has consulted and acted as an executive advisor to the board of a number
      of Private and Public companies. Within this scope, he has been involved in
      business creation and development, and strategic corporate management, tailored
      to a number of different markets. He has a keen understanding on how to
      effectively control the core business processes of a company whilst increasing
      their market share and profitability at an accelerated rate. His specializations
      are in Corporate Finance, Marketing, Planning and Corporate Rescue: due to
      his
      long experience of working with and within large investment banks and as a
      Business Consultant to many companies. His career has shown consistent proof
      in
      advising technology companies to understand, identify, and evaluate emerging
      technologies; allowing for clear judgment, essential timing and vital maturity
      in delivering a finished product to market. Prior to Mr. Jayanarayan's
      appointment at CEO, he was a consultant to the company Since August
      2004.




-
            44
            -




JULY
      1,
      2005 APPOINTMENT OF PROFESSOR EUGENE LEVICH, AGE 56 AS CHIEF TECHNOLOGY OFFICER
      (CTO)





On
      July
      1, 2005, the Board of Directors appointed Professor Eugene Levich as Chief
      Technology Officer, (CTO). From 2002-2005 Dr. Levich has been an independent
      Consultant to several companies developing new generation of optical storage
      based on multilayer concept. In 1999- 2002, Dr. Levich was President and
      Chairman of the Board of Directors of Constellation, Inc. Constellation 3D,
      a
      NASDAQ company, developed new generation technology of optical storage for
      application in consumer electronics (High Definition TV and Digital Cinema)
      and
      professional storage markets. (From 2002 onward, the development of fluorescent
      based storage has been carried out by US based company D Data Inc.)





From
      1996-1998 Dr. Levich was President and Chief Scientist of a private company
      -
      Medevi Ltd. - developing general principles of new generation of optical
      storage-multilayer disks and cards. From 1991-1995 Dr. Levich was Senior partner
      and Chief Scientist in Orlev Scientific Ltd. - subsidiary of Ormat Industries
      Ltd., Israel (Orlev integrated US-Israeli team of distinguished scientists
      developing industrial implementations of new technologies for management of
      turbulent flows in pipes and aeronautics. Dr. E. Levich has discovered, together
      with Professor Lawrence Sirovich of Rockefeller University, previously unknown
      basic principles governing turbulent flows). From 1981-1991, Dr. Levich was
      a
      Professor of Theoretical Physics and Professor of Engineering at the City
      University of New York.





EDUCATION





M.Sc.
      in
      Physics, 1968, from Moscow State University; Ph.D. in Theoretical Physics from
      the Landau Institute of Theoretical Physics, 1970.





Dr.
      E.
      Levich was awarded major research grants by the US Department of Energy for
      seven (7) consecutive years from 1983 to 1991 and by National Science Foundation
      in 1990 and 1991.




PUBLICATIONS





E.
      Levich
      published over 90 papers and book contributions in the fields of astrophysics,
      nonlinear phenomena & chaos, turbulence in fluids and optical storage. His
      main research interest for the last 10 years has been in optical storage. E.
      Levich is the author of over 40 patents, supported in the US and world wide,
      in
      fundamental fields of technology, ranging from managing of drag and heat
      exchange in turbulent flows to new generation of optical storage. His most
      recent scientific contributions in the field of turbulence of fluids and
      turbulence control were published in the monograph -Turbulence Structure and
      Modulation (Springer, Wien - New York, 2001).





JULY
      1,
      2005 APPOINTMENT OF ALEXANDER BOLKER-HAGERTY AGE 24 AS CHIEF OPERATIONS
      OFFICER





On
      June
      30, 2005 the board of Directors appointed Mr. Alexander Bolker-Hagerty as Chief
      Operating Officer of New Medium Enterprises, Inc. Mr. Alexander Bolker-Hagerty
      has been working as a consultant and as NME's Business Development Manager
      at
      their global headquarters in London, United Kingdom since April 2005. Actively
      involved in every aspect of the business, he has been organizing and promoting
      NME's business strategy and coordinating developments into new vertical markets
      and geographical regions. Over the past six years and while earning his degree
      (2000-2004), Mr. Bolker-Hagerty has trained in multiple industries and countries
      in Europe and North America, notably in the premium luxury consumer goods market
      within his family business: Hagerty. Based in the Principalities of Monaco
      and
      Liechtenstein, he was Head of Operations of the Export Division, where he
      oversaw business development and sales of niche market products in over 80
      countries.





Mr.
      Bolker-Hagerty was educated in many countries, is quadric lingual, and possesses
      a library of international contacts which attracted him to numerous Project-
      and
      Product Management experiences in Construction, of the new Port Hercule of
      Monaco, with SGTM and Engeco; in Private and Investment Banking, with Metzler
      Bank of Germany and Schroder Salomon Smith Barney of the United Kingdom; and
      in
      Consumer Products with Unilever of the Netherlands and Rehau of Germany. Mr.
      Bolker-Hagerty received his Bachelor of Science in International Business
      Management and Russian from Babson College and Wellesley College, Massachusetts,
      USA.




-
            45
            -





APPOINTMENT
      OF RAHUL DIDDI AS DIRECTOR





On
      June
      14, 2005 Mr. Rahul Diddi was appointed as Director of New Medium Enterprises,
      Inc. Mr. Diddi has been self employed as a Financial Advisor on Russian,
      Ukrainian, Kazakh and Indian capital markets since 1990. His specialty sectors
      include beer, tires, metals, energos (utilities) and second tier oil and telecom
      stocks as well as high yield local currency sovereign and corporate debt of
      emerging market countries such as Ukraine, Russia, Romania, Bulgaria and Serbia.
      Rahul maintains active relationships with several Russia-oriented Institutional
      funds and strategic investors in these sectors and has worked in New York with
      Russian Investment Banks such as Sovlink, CentreInvest, and US NASD brokerage
      house H. Rivkin & Company (1998-2004). Mr. Diddi worked as a consultant on a
      US AID funded project (1994-95) advising the Republic of Moldova in the mass
      privatization of large enterprises. He also worked on several projects funded
      by
      The World Bank (Restructuring of a large Electric lamp manufacturer in Moldova;
      1996) and The Asian Development Bank (Development of the wool industry in
      Kazakhstan; 1997). Rahul served as a financial advisor to joint ventures
      established in the Former Soviet Union (such as GPX Construction Group of
      Pennsylvania). He worked as a financial advisor at the Austrian Bank
      Creditanstalt Bankverein in New York (1990-1992) and advised clients such as
      Sheraton ITT, Transammonia Corp. and others on hotel and infrastructure (port)
      financings in Russia and Ukraine. Mr. Diddi was a graduate fellow at Western
      Michigan University (1984-85), where he earned a Masters degree in Business
      Administration (MBA) in Finance (1985). He holds a M.S. with distinction
      (Mechanical Engineering) from The Russian Friendship University in Moscow,
      Russia (1983). Prior to that he attended Punjab University in India and was
      awarded a gold medal in mathematics. Rahul is fluent in Russian and served
      as
      the simultaneous interpreter for President Gorbachev at the Reagan-Gorbachev
      Summit in Washington DC (1987; C-SPAN TV).





IRENE
      KUAN, DIRECTOR: On June 14, 2005 Irene Kuan voluntarily resigned from her
      position as interim Chairman and interim CEO but retained her role as Treasurer.
      Irene is a qualified accountant and as more than 20 years experience in the
      accounting profession in the United Kingdom. She has vast experience in audits
      of large public limited companies and has worked in the Insurance, Investments,
      Property and Retail Management industries. From November 2003 to the Present
      she
      has been employed by Visson Technologies U.K as Finance Director. From May
      2003,
      until November 2003 she was on a Sabbatical. From August 2, 2002 to May 2003,
      she was employed as an accountant and financial consultant to Euromaz Group.
      From April 2002 to until August 2002, she was self employed in Real Estate
      renovation. From December 2001 to April 2002 Irene was employed by Hardy
      Underwriting Group where she served in a finance operations capacity. From
      April
      1991- November 2001 she was employed by Arig Insurance Company Limited in an
      Accounting & operations capacity. She has worked at management level in the
      United Kingdom for the last 8 years and is now at Board holding several finance
      directorships of UK companies, including a public company. Irene will manage
      the
      company's finances and will contribute towards the company's future expansion
      plans. Irene currently hold finance directorship in the following companies:
      Silicon Valley Plc, Visson Displays Limited, HD Clearview Limited, Siptelcom
      Limited Wilton Business Solutions Limited, & Wilton Claims Ltd.




BARRY
      WILLIAMSON was appointed Director of our company since September 13, 2004.
      Mr.
      Williamson has been the President and principal owner of Williamson & Co., a
      U.K Real estate entity engaged in sales, rentals, & construction, &
raising the finance for the multimillion pound developments he has been involved
      in. Mr. Williamson is a Fellow of The Chartered Management Institute, Fellow
      Institute of Sales & Marketing Management, and a Member of The Land
      Institute. Williamson and Co also runs an executive head hunting and recruitment
      placing specialized persons in jobs in the Middle East.




-
            46
            -


**ITEM
      9A. COMPLIANCEWITH SECTION 16(A) OF THE EXCHANGE
      ACT**





May
      Ltd.
      is an affiliate of the company who files their ownership reports on 13d form.
      On
      April 7, 2005 May Ltd. purchased shares of the company common stock, and
      reported it on May 20, 2005 in a 13d filing. The late filing resulted from
      the
      signatory being unavailable as a result of traveling. The sale of the shares
      to
      the affiliate was reported in an 8K filing on April 8, 2005.





There
      was
      no other incident of late filing by an officer or director during the fiscal
      year ending June 30, 2005.





**ITEM
      10. EXECUTIVECOMPENSATION**





The
      following represents that annual compensation to be paid to Executive Officers
      & Directors:





Compensation
      Table





Name
            Title
            Annual
                Compensation
            Date
                of
              AppointmentRupert
                Stow
            Chairman
            $12,000
            6-14-2005Mahesh
                Jaranayaran
            CEO,
                Director
            $103,992
            6-14-2005Dr.
                Eugene Levich
            CTO,
                Director
            $144,000
            6-30-2005Alexander
                B. Hagerty
            COO
            $55,992
            6-30-2005Irene
                Kuan
            Treasurer,
                Director
            $37,000
            8-4-2004Rahul
                Didi
            Director
            $20,000
            6-14-2005Barry
                Williamson
            Director
            $2,500
            9-13-2004





See
      Also
      Subsequent Events related to Shares Issuances to Officers &
Directors:





Alex
      Libin, our former COO, who resigned May 13, 2005, was paid an aggregate of
      approximately $36,000 for the fiscal period ending June 30, 2005.





-
            47
            -





Ethel
      Schwartz, our former CEO who resigned May 13, 2005, was not paid any cash
      salary. As of May 5, 2005 she was allocated 1,500,000 shares of Common Stock
      valued at $67,500 for services rendered from January 2004 until March
      2005.





See
      Also
      Executive Compensation History.





During
      the fiscal year ending June 30, 2005, the Company did not issue any Stock
      Options.





Executive
      Compensation History





From
      the
      inception of our Company, our former CEO Ethel Schwartz has not been paid any
      cash salary. She has, however, been compensated in company shares issued to
      her
      based on the fair market value for restricted stock at the time of the issuance,
      in lieu of cash salaries for services rendered to the Company as
      follows:





Services
      Period Compensation





From:
            To:
            FMV
            Price
            Shares8-99
            10-01
            $150,000
            .03375
            4,444,44410-01
            10-02
            50,000
            .025
            2,000,00010-02
            12-03
            62,000
            .0559
            1,112,0001-04
            5-05
            67,500
            .045
            1,500,000





The
      issuance of these shares, and the stock options described below, constitutes
      the
      only compensation Ethel has received from our company since its
      inception.





Stock
      Options





We
      did
      not grant stock options in 1999. Likewise we have not granted stock options
      in
      2000.





2001
      STOCK OPTION PLAN





On
      January 14, 2004, via consent of 78% of the shareholders of our Company the
      2001
      Stock Option Plan was ratified. Pursuant to our 2001 stock option plan, we
      granted stock options to various officers and directors as follows:





5,000,000
      stock options granted to Ethel Schwartz, CEO. Options are exercisable at .045,
      which is the fair market price on the day the options were granted. Options
      are
      valid until 2008.





2,000,000
      stock options granted to Eva Beilus, Secretary & V.P. Options are
      exercisable at .045, which is the fair market price on the day the options
      were
      granted. Options are valid until 2008.





1,000,000
      stock options granted to Hyman Schwartz, Director. Options are exercisable
      at
      .045, which is the fair market price on the day the options were granted.
      Options are valid until 2008.





-
            48
            -





Transfer
      by warrant holders pursuant to the 2001 stock option plan of 37.5% of Warrants
      underlying the 2001 stock option plan, to the seller.





To
      induce
      the Sellers to enter into an Asset Purchase Agreement with our company, all
      of
      the option holders of our 2001 stock option plan agreed to transfer to the
      Seller and/or their designees, on a pro-rata basis an aggregate of 37.5% of
      the
      warrants issued to each, underlying the 2001 stock option plan. Accordingly,
      the
      option holders’ position following the transfer will be as follows:





Option
      Holder 2001 Stock Option Plan Transferred Positions:





Original
                Position
            Transferred
            Options
            RemainingEthel
                Schwartz
            5,000,000
            1,875,000
            3,215,000Eva
                Beilus
            2,000,000
            750,000
            1,250,000Hyman
                Schwartz
            1,000,000
            375,000
            625,000





We
      did
      not grant any stock options for 2002, and 2003. The 2004 Stock Option Plan
      expired with no awards issued. We did not grant any stock options in
      2005.





**ITEM
      11. SECURITYOWNERSHIP OF CERTAIN BENEFICIAL
      OWNERS**





The
      following table describes, beneficial ownership of our Common Stock by persons
      known to us to own more than 5% of such stock and the ownership of Common Stock
      by our directors, and by all officers and directors as a group.





Identity
                of Stockholder
            Percentage
                of Or Entity Shares Owned
            Shares
                Owned (1)Ethel
                Schwartz
            14,084,444
                (2)
            10.62%Southwark
                Properties
            6,009,778
                (3)(4)
            4.53May
                Ltd.
            33,304,249
                (3)(4)
            25.1TriGM
                International
            22,442,999
                (5)
            16.9All
                Officers & Directors
            0
            0




-
            49
            -





(1)
      Pursuant to the rules and regulations of the securities and exchange commission,
      shares of common stock that an individual or entity has a right to acquire
      within 60 days pursuant to the exercise of options or warrants are deemed to
      be
      outstanding for the purposes of computing the percentage ownership of such
      individual or entity, but are not deemed to be outstanding for the purposes
      of
      computing the percentage ownership of any other person or entity shown in the
      table.





(2)
      Includes 9,984,444 common shares owned by Ethel Schwartz, our former CEO.
      Additionally Hyman Schwartz, a director of our company prior to the acquisitions
      owns 350,000 common shares. In addition Ethel Schwartz owns 3,125,000 warrants
      underlying the 2001 stock option plan, and Hyman owns 625,000 of the warrants
      underlying the 2001 stock option plan. Hyman is Ethel's spouse.





(3)
      (4)
      Ann Kellgren has controlling interest and is the beneficial owner of all of
      the
      shares for both May Ltd. and Southwark Properties. Ann was an original investor
      in MultiDisk, Ltd.





(5)
      Sergei Litvak is the authorized signatory and has controlling voting power
      of
      29% of Tri GM International and has voting agreements with holders of additional
      24.5% of their shares.





**ITEM
      12. RELATED PARTY TRANSACTIONS**





MAY
      LTD -
      Affiliate:





May
      Ltd.
      is a private equity offshore investment company established in Nevis. It has
      a
      portfolio of Technology, Telecommunication, media and Property related
      investments in the UK and abroad. The key focus of May Ltd. is to invest in
      innovative, creative and fast growing companies with strong management and
      provides seed capital, R&D capital , working capital or Trade finance for a
      number of companies irrespective of it having a controlling interest. Most
      often
      May is at the forefront of business creation, change and technology, enabling
      the businesses partners to reach their strategic goals and achieve long-term
      success. May Ltd. investment portfolio includes investments in Technology
      related assets and companies. The company has a collective management expertise
      with a wide range of corporate specialization ranging from Venture capital,
      Corporate finance, Marketing and Planning to Corporate Rescue. Where a business
      calls for outside its range of expertise the company has the ability to call
      on
      a host of associate Consultants. The company specializes in identifying and
      evaluating emerging technologies, judging when they are appropriate and
      sufficiently mature to be commercialized.





May
      Ltd.
      is an affiliate of the Company which owns 33,409,429 common shares equal to
      Approximately 25.1% of the outstanding shares of the Company's common stock.
      Ann
      Kallgren is the sole shareholder of May Ltd. She is also the sole shareholder
      of
      Southwark Properties Limited which owns 5,822,279 shares of the Company's common
      stock. May Ltd. and Southwark Properties Limited, together own an aggregate
      of
      approximately 29.6% of the Company's outstanding common stock, over which Ann
      Kallgren and her spouse, Victor Danenza, share joint voting control. Victor
      Danenza is a control person of the company. See also Exhibit 3 to 10K Report
      for
      copy of Consulting Agreement for May Ltd.





-
            50
            -





May
      Ltd.
      also owns 79.2% of the outstanding stock each of Triband Global Limited and
      85%
      of each OneSoft Technologies UK Limited, also known as Turtle Technologies
      PVT
      India, OneSoft Retails & Business Solutions Ltd and Turtle Electronics
      Ltd.





May
      Ltd.
      also Owns 100% of Visson Technology and 100% of VTech, a key R&D facility of
      the company.





May
      Ltd.
      also own 29% of Silicon Valley plc which is a public limited company with over
      2600 shareholders. It is an I.T service provider and specializes in Business
      related software and Device management software. Global Media Cast is a wholly
      owned subsidiary of Silicon Valley Plc. Andrew Danenza was a Director of Global
      Media Cast; he resigned in June 2005.





1.
      In
      accordance to the acquisition agreement with MultiDisk, we were required to
      repay a loan to Visson at closing for the amount of $84,000, which included
      a
      loan of $77,500 plus additional expenses incurred by Visson on behalf of
      MultiDisk prior to the consummation of the acquisition. Furthermore, in
      accordance to the acquisition Agreement with MultiDisk, a sum of $87,000 was
      owed to May Ltd., which we are required to pay after the Company raises
      $500,000.





2.
      During
      the annual period ending June 30, 2005, the Company paid to May Ltd. the sum
      of
      $83,944.15 for rent, telephone, travel and reimbursement of certain expenses
      made on behalf of the Company.





3.
      During
      the annual period ending June 30, 2005 the company paid $190,000 to VTech,
      a
      primary R & D Facility which pays key scientists.





4.
      In
      August 2004, the Company signed a month to month lease for office space located
      at 195 The Vale, Acton London W3, 7QS England with Triband Global Limited for
      approximately 1399 British Pounds which is equivalent to USD approximately
      $2,600 per month plus VAT. The Company shares its office space with various
      entities in which May Ltd. is a principal shareholder. In March 2005, the
      Company's rent was increased to 2,195 equivalent to USD $4,055.35. From October
      2005, a new rental agreement was signed with Pentagon Glass for larger office
      space above Triband Global offices for a monthly fee of 2,875.(Sterling) During
      the Period ending June 30, 2005, NME reimbursed to Triband Global a total of
      $62,023 Which related to payments made by Triband Global on behalf of NME and
      which included a payment of $15,879 for use of its office staff.





5.
      During
      the quarter ending March 31, 2005, the Company engaged the services of OneSoft
      Technologies UK, formerly Turtle Technologies PVT Ltd to provide certain
      consulting services related to the design of its website, and for R&D with
      its associated company in India. During the annual period ending 6-30-2005,
      the
      company paid $13,840 to Turtle Technologies (India) Pvt Ltd and $3,683 to its
      associated company.




6.
      During
      the fiscal year ending June 30, 2005, The Company entered into an IT Support
      Agreement with Silicon Valley PLC through Turtle Technologies (India) Pvt Ltd.
      The Company pays $2,500 monthly as per this agreement. Additionally, during
      the
      fiscal year ending 6-30-2005, the company paid $6,936.50 to Global Media Cast
      Ltd., a wholly owned subsidiary of Silicon Valley PLC.





7.
      During
      the fiscal year ending June 30, 2005, the Company engaged the services of Andrew
      Danenza, the son of Ann Kallgren, who is the sole shareholder of May Ltd. and
      Southwark Properties Limited to provide consulting and other services for the
      Company. Andrew Danenza is a consultant to the company and has received an
      aggregate of $16,902.54 in consulting fees. He will receive an ongoing monthly
      fee of $6,000.00 .




-
            51
            -


8.
      On
      April 7, 2005, the Company issued 10,000,000 shares of its Common Stock to
      May
      Ltd., an affiliate of the Company, at a price of $0.02 cents per share for
      an
      aggregate purchase price of $200,000. The proceeds from these funds were
      utilized for the Company's business and general corporate purposes.





9.
      On
      June 23, 2005, the Company converted the outstanding obligation owed to May
      Ltd.
      equal to $87,000 USD into 1,740,000 Common Shares.





Mahesh
      Jayanarayan, CEO- Related Party Transactions:





10.
      Prior
      to being appointed as CEO, Mahesh Jayanarayan was a consultant to the company.
      In August the Company paid $75,000 consulting fee and 875,000 shares valued
      at
      $350,000 to Business Plans Ltd. Mahesh and family own 100%% of Business Plans
      Ltd. Mahesh has received fees as a consultant prior to his appointment as CEO
      totaling 34,000 USD equivalent of approximately $60,000. B





Mahesh
      Jayanarayan owns 14% of Triband Global Ltd. Along with family members owns
      10.8%
      of OneSoft Technologies UK Ltd and 15% of OneSoft Retail & Business
      Solutions Ltd. See related transaction May Ltd. #4 and $5. Mahesh Jayanarayan
      is
      a Director of Triband Global, Siptalk Ltd, Global MediaCast Ltd Business Plans
      Ltd and New Medium Enterprises UK Ltd. Silicon Valley plc is a public limited
      company with over 2600 shareholders. It is a I.T service provider and
      specializes in Business related software and Device management software. Global
      Media Cast is a wholly owned subsidiary of Silicon Valley PlC. Mahesh
      Jayanarayan is a shareholder and director and along with family members owning
      owns 14% of Silicon Valley PLC. See related transaction May Ltd. #
      6.





Irene
      Kuan -Treasurer, Related Parties:





Irene
      Kuan is a director of the following companies:





·
            Silicon
                Valley, PLC, Triband Global Ltd, Triband Ltd, Wilton Claim
                Ltd.,


·
            Wilton
                Business Solutions, Ltd. Visson Technologies, UK, Litecel
                Ltd.,


·
            Global
                Media Cast Ltd. HD Clearview Ltd.,
                and


·
            OneSoft
                Retail & Business Solutions
                Ltd.




**ITEM
      13. PRINCIPALACCOUNTANT FEES &
SERVICES**





During
      the period ending June 30, 2005 we paid approximately $16,000 for accounting
      and
      auditing. We estimate the current audit will cost approximately
      $16,000.




-
            52
            -


**ITEM14. EXHIBITSINCORORATED BY REFERENCE**





The
      following Exhibits are incorporated by Reference to 8K filings.





Exhibits
      Period Ending 6-30-2005





1.
            August
                9, 2004, August 4, Sale of 5,000,000 shares of unregistered stock
                against
                receipt of $1,000,000 from an accredited
                investor.





2.
            October
                12, 2004 September 13, Appointment of Barry Williamson as
                Director.





3.
            April
                8, On April 7, 2005 Sale of 10,000,000 of unregistered stock to an
                accredited investor, an affiliate, May Ltd. against receipt of
                $200,000





4.
            On
                May 13, 2005 Ethel Schwartz resigned from her position as CEO, President,
                and Director. May 19, 2005, Dr. Alex Libin, COO, and Director, and
                Yehudit
                Hirsch, Corporate Secretary, resigned from their respective
                positions.





5.
            On
                June 14, 2005 Sale of 5,804,594 of unregistered stock to an accredited
                investor, against receipt of
                $400,000.





6.
            June
                21, June 14, Resignation Of Irene Kuan as CEO, remaining as Treasurer,
                appointment of Rupert Stow As Chairman, Chairman Mahesh Jayanarayan,
                CEO
                Director & Rahul Diddi As
                Director.





7.
            On
                June 23, 2005, the Company converted the outstanding obligations
                owed to
                two of its principal shareholders into Common stock of the company.
                May
                Ltd. $87,000 debt converted into 1,740,000 Common shares TriGM Ltd.
                $87,000 debt converted into 1,740,000 Common
                Shares.





8.
            On
                June 24, 2005, New Medium Enterprises, Inc. entered into a strategic
                agreement with Eros Media Ltd, a leading distributor of Bollywood
                movies
                worldwide and mainstream western media in
                India.





9.
            On
                June 25, 2005, New Medium Enterprises, Inc. and E-World Technology
                Co.
                Ltd. Executed a Memorandum of Intent to form a joint R&D program for
                the production of a disc player which will incorporate/ combine EVD
                and
                VMD technologies.





10.
            June
                30, 2005 appointment of Professor Eugene Levich, age 56 as chief
                Technology officer (CTO) and appointment of Alexander Bolker-Hagerty
                age
                24 as chief operations officer.





-
            53
            -





**ITEM
      15. EXHIBITINDEX**





1.
            Article
                of Amendment


2.
            LaDIS
                Scientific Agreement


3.
            May
                Ltd. Consulting Agreement


4.
            Certification
                906 Sarbanes Oxley


5.
            Certification
                302 Sarbanes Oxley





**PART
      IV**





**ITEM
      16. SUBSEQUENTEVENTS**





1.
            On
                July 31, 2005 the Board of Directors voted to extend the outstanding
                warrants of Series A and C until July 31, 2006. Series B, D, and
                E have
                expired July 31, 2005.





SUBSEQUENT
      EVENTS: - EQUITY TRANSACTIONS:





2.
            On
                August 18, 2005 the Company issued to Eros Media Ltd. 5,515,354 pursuant
                to an agreement entered into by and between Eros Media Ltd. and New
                Medium
                Enterprises, Inc. Shares were valued at
                $551,535.





3.
            On
                August 18, 2005 the Company issued 1,000,000 shares to Mahesh
                Jaranayaranan our CEO who allocated 750,000 of these shares to affiliates
                and various family members. Shares were valued at
                $100,000.





4.
            On
                August 18, 2005 the Company issued 84,768 to Quoros Limited for services
                rendered. Shares were valued at
                $8,476.





5.
            On
                September 15, 2005 as of June 28, the Company issued 915,080 to the
                pre-acquisition shareholders for their contribution of approximately
                $46,000 in excess funds over and above the required amount of $589,500.
                Shares were valued at $46,000.





6.
            On
                September 20, 2005 the Company issued 250,000 shares to its COO for
                services rendered. Shares were valued at
                $25,000.





7.
            On
                September 20, 2005 the Company issued 250,000 shares to its CFO for
                services rendered. Shares were valued at
                $25,000





8.
            On
                September 20, 2005 the Company issued 250,000 shares to its Chairman
                for
                services rendered. Shares were valued at
                $25,000.





9.
            On
                September 20, 2005 the Company issued 250,000 shares to its Treasurer
                for
                services rendered. Shares were valued at
                $25,000.





10.
            On
                September 20, 2005 the Company issued 1,000,000 shares to its CEO
                for
                services rendered. Shares were valued at
                $100,000.





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11.
            On
                September 20, 2005 the Company issued 1,000,000 shares to Andrew
                Danenza,
                a consultant to the Company. Mr. Danenza is the son of Ann Kallgren
                who is
                an affiliate of the company. Shares were valued at
                $100,000.





12.
            On
                September 20, 2005 the Company issued 2,000,000 shares to Eugene
                Levich,
                the CTO for services rendered. Shares were valued at
                $200,000.





13.
            On
                September 20, 2005 the Company issued 350,000 shares to seven parties
                for
                services rendered to the Company. Shares were valued at
                $35,000.





14.
            ON
                September 15 and 20, 2005 The Company has issued 7,500,000 common
                shares
                at $0.10/share to one investor and 5,000,000 common shares at $0.15/share
                to the other. For both parties, these shares are "Restricted Securities"
                as the term is defined in rule 144 under the Securities
                Act.





15.9-1
      Amendment to 8k #5 amending the terms of the investment to include an option
      to


purchase
      additional shares. Also amending 8K filed for Andrew Danenza consulting fee


raising
      it from 1,000,000 shares to 2,000,000 shares.





16.
            On
                October 10, 2005, N. Blumenfrucht, CPA PC resigned as Company auditor.
                We
                engaged the accounting firm of Morgenstern & Company as our Company
                auditor.





**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.








New
      Medium Enterprises, Inc.


(Registrant)








By:
      /s/ Mahesh
      Jaranayaran


Principal
      Executive Officer





By: /s/
      Mahesh
      Jaranayaran


Principal
      Accounting Officer





By: /s/
      Mahesh
      Jaranayaran


Principal
      Executive Officer




Date: July
      3, 2005




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