**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 December 31, 2004**

**[         ] Transition report under Section 13 or 15(d) of the Securities        Exchange**

**Act        of 1934 (No fee required) for the transition period from        to**

**Commission        file number: 0-27919**

**XRAYMEDIA        Inc., fka XRAYMEDIA.COM Inc.**

**(Name        of Small Business Issuer in Its Charter)**

**Minnesota        410951123**

**(State        or Other Jurisdiction of (I.R.S. Employer**

**Incorporation        or Organization) Identification No.)**

**555        Hastings Street, Ste.# 1560, Vancouver, B.C., Canada V6B        4N6**

**(Address        of Principal Executive Offices) (Zip Code)**

**(888)        777-0658**

**(Issuer's        Telephone Number, Including Area Code)**

**Securities        registered under Section 12(b) of the Exchange Act:**

**Title        of Each Class Name of each Exchange on Which Registered **
**Common        Stock ($0.001 Par Value) None**

**Preferred        Stock ($0.001 Par Value)**

**Check        whether the issuer: (1) filed all reports required to be filed by Section        **
**13        or 15(d) of the Exchange Act during the past 12 months (or for such shorter        **
**period        that the registrant was required to file such reports), and (2) has been        **
**subject        to such filing requirements for the past 90 days.**

**Yes        [X] No [   ]**

**Check        if there is no disclosure of delinquent filers in response to Item 405 of        **
**Regulation        S-B not contained in this form, and no disclosure will be contained,**
**to        the best of registrant's knowledge, in definitive proxy or information**
**statements        incorporated by reference in Part III of this Form 10-KSB or any**
**amendment        to this Form 10-KSB [X].**

**The        issuer's total revenues for the year ended December 31, 2004, were**
**$70,438.**

**On        March 18, 2005, the number of shares outstanding of the registrant's**
**Common        Stock, $0.001 par value (the only class of voting stock), was**
**238,457,250.        The market value of stock held by non-affiliates as of **
**March        18, 2005 was $1,937,853. On March 18, 2005, the number of shares outstanding        **
**of        the registrants Preferred Stock, $0.001 par value (non-voting), was        1,000,000.**

**The        Company’s President, Raymond Dabney, holds 100% of these        shares.**

***Page            - 1***

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**PART        I**

**FORWARD-LOOKING        STATEMENTS. THIS REGISTRATION STATEMENT INCLUDES **
**"FORWARD-LOOKING        STATEMENTS." FORWARD-LOOKING STATEMENTS CONTAINED IN THIS **
**REGISTRATION        STATEMENT ARE BASED ON MANAGEMENT'S BELIEFS AND ASSUMPTIONS AND ON**
**INFORMATION        CURRENTLY AVAILABLE TO MANAGEMENT. FORWARD-LOOKING STATEMENTS**
**INCLUDE        STATEMENTS IN WHICH WORDS SUCH AS "EXPECT, " "ANTICIPATE," "INTEND,"**
**"PLAN,"        "BELIEVE," "ESTIMATE," "CONSIDER," OR SIMILAR EXPRESSIONS ARE        USED.**

**YOU        SHOULD NOT CONSTRUE ANY FORWARD-LOOKING STATEMENT AS A GUARANTEE OF FUTURE        **
**PERFORMANCE.        THESE STATEMENTS INHERENTLY INVOLVE RISKS, UNCERTAINTIES AND**
**ASSUMPTIONS.        THE FUTURE RESULTS AND STOCKHOLDER VALUES MAY DIFFER FROM THOSE**
**EXPRESSED        IN THESE FORWARD-LOOKING STATEMENTS, AND THOSE VARIATIONS MAY BE**
**MATERIAL        AND ADVERSE. MANY FACTORS THAT WILL AFFECT THESE RESULTS AND VALUES        ARE**

**BEYOND        OUR ABILITY TO CONTROL OR PREDICT.**

**ITEM        1. DESCRIPTION OF BUSINESS**

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*Lethal        Weapon*
*National        Lampoon's Vacation*
*Price        Waterhouse Coopers*

***Page            - 4***

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**XRAYMEDIA        **

**B.        DESCRIPTION OF BUSINESS MODEL**

**EXECUTIVE        SUMMARY**

*Red        Herring*

* *
*PricewaterhouseCoopers*

*Veronis        Suhler and Stevenson*

*eBay.com*

**THE        XRAYMEDIA MISSION**

***Page            - 5***

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**THE        INDUSTRY**

*PricewaterhouseCoopers*

**THE        XRAYMEDIA ONLINE SUPERPORTAL **

**THE        XRAYMEDIA OPPORTUNITY **

***Page            - 6***

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**CORPORATE        STRATEGY**

***Page            - 7***

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**Risk        Factors **

***Page            - 8***

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**ITEM        2. DESCRIPTION OF PROPERTY**

**ITEM        3. LEGAL PROCEEDINGS**

**ITEM        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

***Page            - 9***

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**PART        II**

**ITEM        5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER        MATTERS**

***Page            - 10***

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**RECORD        HOLDERS**

**DIVIDENDS**

** **
** **
**ITEM        6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF        OPERATION**

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**C**

***Page            - 13***

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**G..        Going Concern**

***Page            - 14***

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**ITEM        7.    AUDITED FINANCIAL STATEMENTS**

**XRAYMEDIA,        INC.**

**(A        COMPANY IN THE DEVELOPMENT STAGE)**

**REPORT        ON AUDIT OF FINANCIAL STATEMENTS**

**YEARS        ENDED DECEMBER 31, 2004 AND 2003**

**AND        MARCH 1, 1994 **

**(INCEPTION        OF THE DEVELOPMENT STAGE) **

**TO        DECEMBER 31, 2004**

***Page            - 15***

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**Report        of Independent Registered Public Accounting Firm**

**FINANCIAL        STATEMENTS**

**Balance        Sheet **

**Statements        of Operations and Accumulated Deficit **

**Statements        of Stockholders' Equity**

**Statements        of Cash Flows **

**Notes        to Financial Statements**

***Page            - 16***

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**REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING        FIRM**

**Board        of Directors**

**Xraymedia,        Inc.**

**(A        Company in the Development Stage) **

***Page            - 17***

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**Board        of Directors**

**Xraymedia,        Inc. **

**(A        Company in the Development Stage) **

**Page        two**

** **
** **

**Bedinger        & Company**

**Certified        Public Accountants**

**Concord,        California**

**March        18, 2005**

***Page            - 18***

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| **XRAYMEDIA,                    INC.**                      |   |   |
|-------------------------------------------------------------|--------|--------|
| **(A                    COMPANY IN THE DEVELOPMENT STAGE)** |   |
| **BALANCE                    SHEET**                        |   |   |
| **DECEMBER                    31, 2004**                    |   |

|                                                                                                                                                                                                                                                            |   |   |                               |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------|--------|
| **ASSETS**                                                                                                                                                                                                                                                      |   |   | **December                    31** |   |
|                                                                                                                                                                                                                                                            |   |   | **2004**                           |   |
| **CURRENT                    ASSETS**                                                                                                                                                                                                                           |   |   |                               |   |
|  **Cash**                                                                                                                                                                                                                                                  |   | **$**  | **-**                              |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|  **Accounts                    receivable**                                                                                                                                                                                                                |   |   | **29,102**                         |   |
|  **Prepaid                    expenses**                                                                                                                                                                                                                   |   |   | **127**                            |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|  **TOTAL                    CURRENT ASSETS**                                                                                                                                                                                                               |   |   | **29,229**                         |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **FIXED                    ASSETS**                                                                                                                                                                                                                             |   |   |                               |   |
|  **Furniture                    and equipment (Note B)**                                                                                                                                                                                                   |   |   |                               |   |
| **Cost**                                                                                                                                                                                                                                                        |   |   | **328,026**                        |   |
| **Accumulated                    depreciation**                                                                                                                                                                                                                 |   |   | **(267,669**                       | **)**  |
| **Net**                                                                                                                                                                                                                                                         |   |   | **60,357**                         |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|  **Software                    (Note B)**                                                                                                                                                                                                                  |   |   |                               |   |
| **Cost**                                                                                                                                                                                                                                                        |   |   | **25,000**                         |   |
| **Accumulated                    amortization**                                                                                                                                                                                                                 |   |   | **(25,000**                        | **)**  |
| **Net**                                                                                                                                                                                                                                                         |   |   | **0**                              |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|  **Deposits**                                                                                                                                                                                                                                              |   |   | **0**                              |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **TOTAL                    FIXED ASSETS**                                                                                                                                                                                                                       |   |   | **60,357**                         |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **OTHER                    ASSETS**                                                                                                                                                                                                                             |   |   |                               |   |
|  **Security                    deposit**                                                                                                                                                                                                                   |   |   | **158**                            |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|  **TOTAL                    ASSETS**                                                                                                                                                                                                                       |   | **$**  | **89,744**                         |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **LIABILITIES**                                                                                                                                                                                                                                                 |   |   |                               |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **CURRENT                    LIABILITIES**                                                                                                                                                                                                                      |   |   |                               |   |
|  **Overdraft**                                                                                                                                                                                                                                             |   | **$**  | **6,413**                          |   |
|  **Accounts                    payable and accrued expenses (Note C)**                                                                                                                                                                                     |   |   | **1,064,491**                      |   |
|  **Advance                    from company officer**                                                                                                                                                                                                       |   |   | **153,845**                        |   |
|  **Accrued                    wages payable (Note C)**                                                                                                                                                                                                     |   |   | **0**                              |   |
|  **Advances                    (Note C)**                                                                                                                                                                                                                  |   |   | **86,353**                         |   |
|  **Advance                    from related party (Note D)**                                                                                                                                                                                                |   |   | **611,946**                        |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **TOTAL                    CURRENT LIABILITIES**                                                                                                                                                                                                                |   |   | **1,923,048**                      |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|  **TOTAL                    LIABILITIES**                                                                                                                                                                                                                  |   |   | **1,923,048**                      |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **COMMITMENTS                    AND CONTINGENCIES (Note K & M)**                                                                                                                                                                                           |   |   |                               |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **STOCKHOLDERS'                    (Note F)**                                                                                                                                                                                                                   |   |   |                               |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **Convertible                    preferred stock, par value $.001; 1,000,000**                                                                                                                                                                                  |   |   |                               |   |
| **shares                    authorized; 1,000,000 and 0 issued and outstanding                    at**                                                                                                                                                          |   |   |                               |   |
| **December                    31, 2004 and 2003, respectively.**                                                                                                                                                                                                |   |   | **1,000**                          |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **Common                    Stock, par value $.001; 250,000,000 shares authorized; issued                    and                    outstanding 224,957,250 and 98,935,500 at December 31, 2004 and                    2003,                    respectively.** |   |   | **224,957**                        |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
| **Additional                    paid in capital**                                                                                                                                                                                                               |   |   | **22,992,609**                     |   |
| **Common                    shares subscribed**                                                                                                                                                                                                                 |   |   | **11,000**                         |   |
| **Deficit                    at inception date**                                                                                                                                                                                                                |   |   | **(746,875**                       | **)**  |
| **Accumulated                    deficit during the development stage**                                                                                                                                                                                         |   |   | **(24,315,995**                    | **)**  |
| **Common                    stock note receivable**                                                                                                                                                                                                             |   |   | **-**                              |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|  **TOTAL                    STOCKHOLDERS'**                                                                                                                                                                                                                |   |   | **(1,833,304**                     | **)**  |
|                                                                                                                                                                                                                                                            |   |   |                               |   |
|  **TOTAL                    LIABILITIES AND**                                                                                                                                                                                                              |   |   |                               |   |
|  **STOCKHOLDERS'**                                                                                                                                                                                                                                         |   | **$**  | **89,744**                         |   |
|                                                                                                                                                                                                                                                            |   |   |                               |   |

***Page            - 19***

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| **XRAYMEDIA,                      INC.**                                                                                                          |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| **(A                      COMPANY IN THE DEVELOPMENT STAGE)**                                                                                     |   |   |   |   |   |   |
| STATEMENTS                      OF OPERATIONS AND ACCUMULATED DEFICIT                                                                             |   |   |   |   |   |
| YEAR                      ENDED DECEMBER 31, 2004, 2003 AND                                                                                       |   |   |   |   |   |   |
| THE                      PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE) TO                      DECEMBER 31,                      2004 |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |

|                                                     |   |   |                                               |   |                                                 |       |   |   | March                      1, 1994  |   |
|----------------------------------------------------------|--------|--------|----------------------------------------------------|--------|------------------------------------------------------|------------|--------|--------|------------------------------------------|--------|
|                                                     |   |   |                                               |   |                                                 |       |   |   | (inception                      of       |   |
|                                                     |   |   | Year                      Ended December 31,  |   |  development                    stage) to  |
|                                                     |   |   | 2004                                               |   |                                                 | 2003       |   |   | December                      31,2004    |   |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| REVENUE                                                  |   | $      | 70,438                                             |   | $                                                    | 303        |   | $      | 116,157                                  |   |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| COSTS                      AND EXPENSES                  |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| Personnel                      Costs                |   |   | 60,000                                             |   |                                                 | 84,000     |   |   | 748,871                                  |   |
| Compensation                      expense           |   |   | 9,551,750                                          |   |                                                 | 400,000    |   |   | 12,121,750                               |   |
| Occupancy                      costs                |   |   | 87,257                                             |   |                                                 | 82,856     |   |   | 457,734                                  |   |
| Professional                      fees              |   |   | 245,223                                            |   |                                                 | 270,658    |   |   | 1,533,225                                |   |
| Media                      Advertising              |   |   | 95,146                                             |   |                                                 | 278,318    |   |   | 373,464                                  |   |
| Computer                      costs                 |   |   | -                                                  |   |                                                 | -          |   |   | 94,840                                   |   |
| Marketing                                           |   |   | 96,294                                             |   |                                                 | 128,297    |   |   | 333,793                                  |   |
| Travel                                              |   |   | 122,131                                            |   |                                                 | 120,690    |   |   | 454,306                                  |   |
| Consulting                                          |   |   | 93,257                                             |   |                                                 | 87,162     |   |   | 523,733                                  |   |
| Bank                      charges                   |   |   | 6,807                                              |   |                                                 | 4,488      |   |   | 18,411                                   |   |
| Office                      supplies                |   |   | 88,257                                             |   |                                                 | 81,870     |   |   | 383,615                                  |   |
| Communication                                       |   |   | 20,914                                             |   |                                                 | 23,404     |   |   | 173,291                                  |   |
| Insurance                                           |   |   | 192                                                |   |                                                 | 697        |   |   | 77,978                                   |   |
| Miscellaneous                                       |   |   | 2,470                                              |   |                                                 | (20        | )      |   | 26,618                                   |   |
| Transfer                      fees                  |   |   | 2,950                                              |   |                                                 | 6,225      |   |   | 25,459                                   |   |
| Depreciation                      and amortization  |   |   | 73,492                                             |   |                                                 | 66,951     |   |   | 311,880                                  |   |
| Bad                      debt expense               |   |   | 30,000                                             |   |                                                 | -          |   |   | 36,343                                   |   |
| Patent,                      copyright expense      |   |   | 924,000                                            |   |                                                 |       |   |   | 924,000                                  |   |
| Research                      and development       |   |   | 503,470                                            |   |                                                 | 219,479    |   |   | 1,157,789                                |   |
| Media                      project development      |   |   | 2,135,850                                          |   |                                                 |       |   |   | 2,135,850                                |   |
| Investor                      relations             |   |   | 1,574,012                                          |   |                                                 | 151,794    |   |   | 1,825,401                                |   |
|  TOTAL                      EXPENSES                |   |   | 15,713,472                                         |   |                                                 | 2,006,869  |   |   | 23,738,351                               |   |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| OTHER                      INCOME                        |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| Dissolution                      of CorpReports     |   |   | -                                                  |   |                                                 | -          |   |   | (503,507                                 | )      |
| Other                                               |   |   | -                                                  |   |                                                 | -          |   |   | (138,774                                 | )      |
| -                                                        |   |   |                                               |   |                                                 | -          |   |   | (642,281                                 | )      |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| OTHER                      EXPENSES                      |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| Interest                      and penalties         |   |   | (9,115                                             | )      |                                                 |       |   |   | 13,694                                   |   |
| Other                      interest expense         |   |   |                                               |   |                                                 | 6,167      |   |   | 37,826                                   |   |
|                                                     |   |   | (9,115                                             | )      |                                                 | 6,167      |   |   | 51,520                                   |   |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| NET                      LOSS                            |   | $      | (15,633,919                                        | )      | $                                                    | (2,012,733 | )      | $      | (24,315,995                              | )      |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| BASIC                      AND DILUTED                   |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| LOSS                      PER SHARE (NOTE A)             |   | $      | (0.11                                              | )      | $                                                    | (0.02      | )      |   |                                     |   |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| WEIGHTED                      AVERAGE NUMBER OF          |   |   |                                               |   |                                                 |       |   |   |                                     |   |
| COMMON                      SHARES OUTSTANDING           |   |   | 148,017,320                                        |   |                                                 | 91,598,051 |   |   |                                     |   |
|                                                     |   |   |                                               |   |                                                 |       |   |   |                                     |   |

***Page            - 20***

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| **XRAYMEDIA,                      INC.**                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| **(A                      COMPANY IN THE DEVELOPMENT STAGE)**                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                      OF STOCKHOLDERS' EQUITY                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| THE                      PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE) TO                      DECEMBER 31,                      2004 |   |   |   |   |   |   |   |   |   |   |

|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   | Existing                      deficit  |   |   |                                    |   |   |       |   |   | Total       |   |
|----------------------------------------------------------------------------------|--------|--------|--------------------------------------------|--------|--------|-----------------------------------|--------|--------|--------------------------------|--------|--------|---------|--------|--------|-----------------------------------|--------|--------|------------------------------------------|--------|--------|---------------------------------------------|--------|--------|-----------------------------------------|--------|--------|------------|--------|--------|-------------|--------|
|                                                                             |   |   | Preferred                      Stock  |   |   | Common                      Stock |   |   | Additional                     |   |   |    |   |   | at                      inception |   |   | Deficit                      accumulated |   |   |                                        |   |   | Stockholder's                           |   |
|                                                                             |   |   | Number                      of        |   |   |                              |   |   | Number                      of |   |   |    |   |   | Paid-in                           |   |   |                                     |   |   | of                      development         |   |   | during                      development |   |   | Note       |   |   | Equity      |   |
|                                                                             |   |   | Shares                                |   |   | Amount                            |   |   | Shares                         |   |   | Amount  |   |   | Capital                           |   |   | Stock                      Subscribed    |   |   | stage                                       |   |   | stage                                   |   |   | Receivable |   |   | Deficit     |   |
| BEGINNING                      BALANCE                                           |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| at                      inception of development, March 1, 1994             |   |   |                                       |   | $      | -                                 |   |   | 201                            |   | $      | -       |   | $      | 746,875                           |   | $      | -                                        |   | $      | (746,875                                    | )      | $      | -                                       |   | $      | -          |   | $      | -           |   |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   | 720                            |   |   | 1       |   |   | 1,799                             |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 1,800       |   |
| Net                      loss for year ending 12/31/94                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (1,800                                  | )      |   |       |   |   | (1,800      | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 1994                                      |   |   | -                                          |   |   |                              |   |   | 921                            |   |   | 1       |   |   | 748,674                           |   |   |                                     |   |   | (746,875                                    | )      |   | (1,800                                  | )      |   | -          |   |   | -           |   |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| Net                      loss for year ending 12/31/95                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | -                                       |   |   |       |   |   |        |   |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 1995                                      |   |   |                                       |   |   |                              |   |   | 921                            |   |   | 1       |   |   | 748,674                           |   |   |                                     |   |   | (746,875                                    | )      |   | (1,800                                  | )      |   | -          |   |   | -           |   |
| Shares                      issued                                          |   |   |                                       |   |   | -                                 |   |   | 90                             |   |   | -       |   |   | 28,500                            |   |   | -                                        |   |   |                                        |   |   |                                    |   |   |       |   |   | 28,500      |   |
| Net                      loss for year ending 12/31/96                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (50,165                                 | )      |   |       |   |   | (50,165     | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 1996                                      |   |   | -                                          |   |   | -                                 |   |   | 1,011                          |   |   | 1       |   |   | 777,174                           |   |   | -                                        |   |   | (746,875                                    | )      |   | (51,965                                 | )      |   | -          |   |   | (21,665     | )      |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   | 14,492                         |   |   | 15      |   |   | 258,536                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 258,551     |   |
| Net                      loss for year ending 12/31/97                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (174,022                                | )      |   |       |   |   | (174,022    | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 1997                                      |   |   |                                       |   |   | -                                 |   |   | 15,503                         |   |   | 16      |   |   | 1,035,710                         |   |   | -                                        |   |   | (746,875                                    | )      |   | (225,987                                | )      |   | -          |   |   | 62,864      |   |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   | 15,275                         |   |   | 15      |   |   | 1,237,445                         |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 1,237,460   |   |
| Net                      loss for year ending 12/31/98                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (1,315,249                              | )      |   |       |   |   | (1,315,249  | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 1998                                      |   |   |                                       |   |   |                              |   |   | 30,778                         |   |   | 31      |   |   | 2,273,155                         |   |   |                                     |   |   | (746,875                                    | )      |   | (1,541,236                              | )      |   | -          |   |   | (14,925     | )      |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
|  Shares                      issued for cash                                |   |   |                                       |   |   |                              |   |   | 6,590,000                      |   |   | 6,590   |   |   | 207,010                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 213,600     |   |
| Net                      loss for year ending 12/31/99                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (205,851                                | )      |   |       |   |   | (205,851    | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 1999                                      |   |   | -                                          |   |   | -                                 |   |   | 6,620,778                      |   |   | 6,621   |   |   | 2,480,165                         |   |   | -                                        |   |   | (746,875                                    | )      |   | (1,747,087                              | )      |   | -          |   |   | (7,176      | )      |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
|  Shares                      issued in exchange for extended business model |   |   |                                       |   |   |                              |   |   | 20,000,000                     |   |   | 20,000  |   |   | (20,000                           | )      |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | -           |   |
|  Shares                      issued in exchange for services                |   |   |                                       |   |   |                              |   |   | 210,000                        |   |   | 210     |   |   | 71,790                            |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 72,000      |   |
|  Shares                      issued for note                                |   |   |                                       |   |   |                              |   |   | 150,000                        |   |   | 150     |   |   | 29,850                            |   |   |                                     |   |   |                                        |   |   |                                    |   |   | (30,095    | )      |   | (95         | )      |
|  Shares                      issued for cash                                |   |   |                                       |   |   |                              |   |   | 4,050,000                      |   |   | 4,050   |   |   | 805,950                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 810,000     |   |
|  Shares                      issued under stock performance plan            |   |   |                                       |   |   |                              |   |   | 3,300,000                      |   |   | 3,300   |   |   | 656,700                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 660,000     |   |
| Net                      loss for year ending 12/31/00                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (1,671,139                              | )      |   |       |   |   | (1,671,139  | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 2000 (as restated)                        |   |   | -                                          |   |   | -                                 |   |   | 34,330,778                     |   |   | 34,331  |   |   | 4,024,455                         |   |   | -                                        |   |   | (746,875                                    | )      |   | (3,418,226                              | )      |   | (30,095    | )      |   | (136,410    | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
|  Shares                      issued for services                            |   |   |                                       |   |   |                              |   |   | 5,100,000                      |   |   | 5,100   |   |   | 209,900                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 215,000     |   |
|  Shares                      issued for debt                                |   |   |                                       |   |   |                              |   |   | 5,900,000                      |   |   | 5,900   |   |   | 171,100                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 177,000     |   |
|  Shares                      issued under section 144 - control position    |   |   |                                       |   |   |                              |   |   | 15,000,000                     |   |   | 15,000  |   |   | 510,000                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 525,000     |   |
|  Shares                      issued under stock performance plan            |   |   |                                       |   |   |                              |   |   | 5,950,000                      |   |   | 5,950   |   |   | 202,300                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 208,250     |   |
| Net                      loss for year ending 12/31/01                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (1,571,200                              | )      |   |       |   |   | (1,571,200  | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 2001                                      |   |   | -                                          |   |   | -                                 |   |   | 66,280,778                     |   |   | 66,281  |   |   | 5,117,755                         |   |   | -                                        |   |   | (746,875                                    | )      |   | (4,989,426                              | )      |   | (30,095    | )      |   | (582,360    | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
|  Shares                      issued for services                            |   |   |                                       |   |   |                              |   |   | 3,000,000                      |   |   | 3,000   |   |   | 87,000                            |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 90,000      |   |
|  Shares                      issued for debt                                |   |   |                                       |   |   |                              |   |   | 1,000,000                      |   |   | 1,000   |   |   | 29,000                            |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 30,000      |   |
|  Shares                      issued under section 144 - control position    |   |   |                                       |   |   |                              |   |   | 7,500,000                      |   |   | 7,500   |   |   | 517,500                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 525,000     |   |
|  Shares                      issued under stock performance plan            |   |   |                                       |   |   |                              |   |   | 5,350,000                      |   |   | 5,350   |   |   | 270,650                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 276,000     |   |
| Net                      loss for year ending 12/31/02                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (1,679,917                              | )      |   |       |   |   | (1,679,917  | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 2002                                      |   |   | -                                          |   |   | -                                 |   |   | 83,130,778                     |   |   | 83,131  |   |   | 6,021,905                         |   |   | -                                        |   |   | (746,875                                    | )      |   | (6,669,343                              | )      |   | (30,095    | )      |   | (1,341,277  | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
|  Shares                      issued for services                            |   |   |                                       |   |   |                              |   |   | 500,000                        |   |   | 500     |   |   | 182,000                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 182,500     |   |
|  Shares                      issued under stock performance plan            |   |   |                                       |   |   |                              |   |   | 1,000,000                      |   |   | 1,000   |   |   | 399,000                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 400,000     |   |
|  Shares                      issued for cash                                |   |   |                                       |   |   |                              |   |   | 14,304,722                     |   |   | 14,305  |   |   | 736,651                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 750,956     |   |
|  Shares                      subscribed and paid                            |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   | 489,600                                  |   |   |                                        |   |   |                                    |   |   |       |   |   | 489,600     |   |
| Net                      loss for year ending 12/31/03                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (2,012,733                              | )      |   |       |   |   | (2,012,733  | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 2003                                      |   |   | -                                          |   |   | -                                 |   |   | 98,935,500                     |   |   | 98,936  |   |   | 7,339,556                         |   |   | 489,600                                  |   |   | (746,875                                    | )      |   | (8,682,076                              | )      |   | (30,095    | )      |   | (1,530,954  | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| Shares                      issued                                          |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
|  Shares                      issued for services                            |   |   | 1,000,000                                  |   |   | 1,000                             |   |   | 96,114,286                     |   |   | 96,114  |   |   | 13,996,736                        |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 14,093,850  |   |
|  Shares                      issued under stock performance plan            |   |   |                                       |   |   |                              |   |   | 7,310,714                      |   |   | 7,311   |   |   | 740,513                           |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 747,824     |   |
|  Shares                      issued for cash                                |   |   |                                       |   |   |                              |   |   | 22,523,332                     |   |   | 22,523  |   |   | 915,877                           |   |   | (489,600                                 | )      |   |                                        |   |   |                                    |   |   |       |   |   | 448,800     |   |
|  Shares                      subscribed and paid                            |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   | 11,000                                   |   |   |                                        |   |   |                                    |   |   |       |   |   | 11,000      |   |
|  Shares                      issued under cashless warrant                  |   |   |                                       |   |   |                              |   |   | 73,418                         |   |   | 73      |   |   | (73                               | )      |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   | 0           |   |
|  Note                      cancelled                                        |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   | 30,095     |   |   | 30,095      |   |
| Net                      loss for year ending 12/31/04                      |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   | (15,633,919                             | )      |   |       |   |   | (15,633,919 | )      |
|                                                                             |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| BALANCES                                                                         |   |   |                                       |   |   |                              |   |   |                           |   |   |    |   |   |                              |   |   |                                     |   |   |                                        |   |   |                                    |   |   |       |   |   |        |   |
| December                      31, 2004                                      |   |   | 1,000,000                                  |   | $      | 1,000                             |   |   | 224,957,250                    |   | $      | 224,957 |   | $      | 22,992,609                        |   | $      | 11,000                                   |   | $      | (746,875                                    | )      | $      | (24,315,995                             | )      | $      | -          |   | $      | (1,833,304  | )      |

***Page              - 21***

----

| **XRAYMEDIA,                        INC.**                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| **(A                        COMPANY IN THE DEVELOPMENT STAGE)**                                                                                         |   |   |   |   |   |   |   |   |   |
| STATEMENTS                        OF CASH FLOWS                                                                                                         |   |   |   |   |   |   |   |   |   |
| YEAR                        ENDED DECEMBER 31, 2004, 2003 AND                                                                                           |   |   |   |   |   |   |   |   |   |
| THE                        PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE)                        TO DECEMBER 31,                        2004 |   |   |   |   |   |

|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   | March                        1, 1994        |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|------------|----------------------------------------------|--------|--------|--------------------------------------------------|--------|
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |  (inception                        of  |   |
|                                                                                                                                           |   |   | Year                        Ended December 31  |   |   |       | development                        stage) to |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   | December                        31, 2003    |   |
|                                                                                                                                           |   |   | 2004                                                |   |   | 2003       |                                         |   |   | (as                        restated              | )      |
| CASH                        FLOWS FROM OPERATING ACTIVITIES:                                                                                   |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Net                        loss                                                                                                                |   | $      | (15,633,919                                         | )      | $      | (2,012,733 | )                                            |   | $      | (24,315,995                                      | )      |
| Adjustments                        to reconcile net loss                                                                                       |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| to                        net cash used by operating activities:                                                                               |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Depreciation                                                                                                                                   |   |   | 65,158                                              |   |   | 58,618     |                                         |   |   | 286,880                                          |   |
| Amortization                                                                                                                                   |   |   | 8,334                                               |   |   | 8,333      |                                         |   |   | 25,000                                           |   |
| Shares                        issued in exchange for services                                                                                  |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| charged                        to Professional fees                                                                                            |   |   | 70,000                                              |   |   | 182,500    |                                         |   |   | 324,500                                          |   |
| Shares                        issued for stock performance plan                                                                                |   |   | 451,750                                             |   |   | 400,000    |                                         |   |   | 1,996,000                                        |   |
| Shares                        issued under section 144-control position                                                                        |   |   | 9,100,000                                           |   |   |       |                                         |   |   | 10,150,000                                       |   |
| Shares                        issued for services                                                                                              |   |   | 3,998,850                                           |   |   |       |                                         |   |   | 4,303,850                                        |   |
| Abandonment                        of furniture & equipment                                                                                |   |   | -                                                   |   |   |       |                                         |   |   | 30,809                                           |   |
| Bad                        debt expense                                                                                                        |   |   | 30,000                                              |   |   |       |                                         |   |   | 36,343                                           |   |
| Write-off                        of goodwill                                                                                                   |   |   | -                                                   |   |   |       |                                         |   |   | 464,831                                          |   |
| Write-off                        of patent, copyright                                                                                          |   |   | 924,000                                             |   |   |       |                                         |   |   | 924,000                                          |   |
| CHANGES                        IN CURRENT ASSETS AND CURRENT                                                                                   |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| ASSETS                        AND CURRENT LIABILITIES:                                                                                         |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| decrease                        in current assets:                                                                                             |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Prepaids                        expenses                                                                                                       |   |   | (127                                                | )      |   | -          |                                         |   |   | (127                                             | )      |
| Accounts                        receivable                                                                                                     |   |   | (29,102                                             | )      |   | -          |                                         |   |   | (35,445                                          | )      |
| Security                        deposit                                                                                                        |   |   | 1,108                                               |   |   | 11,676     |                                         |   |   | (157                                             | )      |
| Increase                        in current liabilities:                                                                                        |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Accounts                        payable and accrued expenses                                                                                   |   |   | 81,835                                              |   |   | 172,692    |                                         |   |   | 906,144                                          |   |
| Advances-other                                                                                                                                 |   |   | 59,788                                              |   |   |       |                                         |   |   | 59,788                                           |   |
| Advances                        from related parties                                                                                           |   |   | 113,755                                             |   |   |       |                                         |   |   | 979,207                                          |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| NET                        CASH USED FOR OPERATING ACTIVITIES                                                                                  |   |   | (758,570                                            | )      |   | (1,178,914 | )                                            |   |   | (3,864,372                                       | )      |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| CASH                        FLOWS FROM INVESTING ACTIVITIES:                                                                                   |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Acquisition                        of furniture and equipment                                                                                  |   |   | (24,464                                             | )      |   | (13,951    | )                                            |   |   | (378,046                                         | )      |
| Acquisition                        of software                                                                                                 |   |   | -                                                   |   |   | -          |                                         |   |   | (25,000                                          | )      |
| of                        goodwill                                                                                                             |   |   |                                                |   |   |       |                                         |   |   | (464,831                                         | )      |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| NET                        CASH FOR INVESTING ACTIVITIES                                                                                       |   |   | (24,464                                             | )      |   | (13,951    | )                                            |   |   | (867,877                                         | )      |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| CASH                        FLOWS FROM FINANCING ACTIVITIES:                                                                                   |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Issuance                        of notes payable                                                                                               |   |   |                                                |   |   | (28,504    | )                                            |   |   | 1,704,807                                        |   |
| Shares                        issued for note                                                                                                  |   |   | 95                                                  |   |   |       |                                         |   |   | -                                                |   |
| Shares                        subscribed and paid                                                                                              |   |   | (478,600                                            | )      |   | 489,600    |                                         |   |   | 11,000                                           |   |
| Sale                        of common stock                                                                                                    |   |   | 1,235,474                                           |   |   | 750,955    |                                         |   |   | 3,010,029                                        |   |
| NET                        CASH PROVIDED BY FINANCING                                                                                          |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| ACTIVITIES                                                                                                                                     |   |   | 756,969                                             |   |   | 1,212,051  |                                         |   |   | 4,725,836                                        |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| NET                        INCREASE IN CASH                                                                                                    |   |   | (26,065                                             | )      |   | 19,186     |                                         |   |   | (6,413                                           | )      |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| CASH,                        beginning of period                                                                                               |   |   | 19,652                                              |   |   | 466        |                                         |   |   | -                                                |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| CASH,                        end of period                                                                                                     |   | $      | (6,413                                              | )      | $      | 19,652     |                                         |   | $      | (6,413                                           | )      |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| SUPPLEMENTAL                        DISCLOSURE:                                                                                                |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Penalties                        and interest                                                                                                  |   |   |                                                |   | $      | -          |                                         |   | $      | 22,809                                           |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Other                        Interest expense                                                                                                  |   | $      | -                                                   |   | $      | 6,167      |                                         |   | $      | 37,826                                           |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Noncash                        investing and financing activities                                                                              |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| Shares                        issued for services                                                                                              |   | $      | 4,992,850                                           |   | $      | 182,500    |                                         |   |   |                                             |   |
| Shares                        issued for stock performance plan                                                                                |   |   | 451,750                                             |   |   | 400,000    |                                         |   |   |                                             |   |
| Shares                        issued under section 144 - control position                                                                      |   |   | 9,100,000                                           |   |   | 0          |                                         |   |   |                                             |   |
|                                                                                                                                           |   | $      | 14,544,600                                          |   | $      | 582,500    |                                         |   |   |                                             |   |
|                                                                                                                                           |   |   |                                                |   |   |       |                                         |   |   |                                             |   |
| No                        significant amounts of taxes were paid during the periods                        shown                        above. |   |   |                                                |   |   |       |                                         |   |   |                                             |   |

***Page            - 22***

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**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Organization        **

**In        November 2003, the Company changed its name to XRAYMEDIA, INC. (XRYM) from        XRAYMEDIA.COM.**

**The        Company is incorporated in the United States in the state of Minnesota and        operates in Vancouver, British Columbia and New York. The Company’s principal        business is a general media Internet supersite portal currently under        development. The website XRAYMEDIA.com, when completed, will be comprised        of a        main general media supersite portal that will branch out into three media        specific business portals: Buy & Sell Services; Public Relations Services;        and Advertising Agency Services (Live Media Marketplace).  The Company        intends to sell conventional media advertising space, online advertising,        and        advertising and public relations services via its internet site. Because        the        Company is in the development stage, the accompanying financial statements        should not be regarded as typical for normal operating        periods.**

**Summary        of Significant Accounting Principles**

**Accounting        estimates**

**The        preparation of financial statements in conformity with accounting principles        generally accepted in the United States requires management to make estimates        and assumptions that affect the reported amounts of assets and liabilities        and        disclosure of contingent assets and liabilities at the date of the financial        statements and the reported amounts of revenues and expenses during the        reporting period. Actual results could differ from those        estimates.**

**Basic        earnings per share**

**Basic        earnings per share have been calculated in conformity with Financial Accounting        Standards Board Statement No. 128 “**
***Earnings        per Share***
**”.        The Company has a simple capital structure with no significant potential        common        shares. Basic earnings per share is calculated weighted on the average number        of        common shares outstanding each year.**

**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        (Continued)**

**Summary        of Significant Accounting Principles (Continued)**

**Office        furniture and equipment**

**Office        furniture and equipment purchases are capitalized and the cost depreciated        over        the estimated useful lives of the related assets, generally five to seven        years        under the straight-line method. Office furniture and equipment abandoned        is        written off at the time of the abandonment. **

**Issuance        of Common Stock**

**The        issuance of common stock for other than cash is recorded by the Company at        managements estimate of the fair value of the assets acquired or services        rendered.**

**Income        taxes**

**No        income taxes were paid or are payable for the years ended December 31, 2004        and        2003.**

**Functional        Currency**

**The        financial statements are stated in U.S. dollars, which is the functional        currency of the Company.**

**The        Company maintains their financial records in U.S. dollars. If transactions        had        been recorded in foreign currency (Canadian dollars) and then translated        into        U.S. dollars using a weighted-average translation rate the difference between        that amount and the activities expressed in U.S. dollars is        immaterial.**

***Page            - 23***

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**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        (Continued)**

**Summary        of Significant Accounting Principles (Continued)**

**Research        and Development**

**All        research and development expenses are expensed as incurred. Costs incurred        to        establish the technological feasibility of the web site is expensed as incurred        and included in Research and Development expenses. There are no production        costs        to capitalize as defined in Statement on Financial Accounting Standards        NO.86.**

**Cash        and cash equivalents**

**For        purposes of the statement of cash flows, the Company considers all highly        liquid        debt instruments purchased with an original maturity of three months or less        to        be cash equivalents.**

**Accounts        receivable**

**Accounts        receivable are reported at the customers' outstanding balances less any        allowance for doubtful accounts. Interest is not accrued on overdue accounts        receivable. The Company evaluates receivables on a regular basis for potential        reserve.**

**Concentrations        of credit risk**

**The        Company performs ongoing credit evaluations of its customers. For the year        ended        December 31, 2004, two customers individually accounted for 86% and 10% of        accounts receivable. **

**In        the year ended December 31, 2004, the Company’s two largest customers accounted        for 53% and 36% of sales.**

***Page            - 24***

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**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        (Continued)**

**Summary        of Significant Accounting Principles (Continued)**

**Impact        of accounting standards**

**In        January 2003 the FASB issued Interpretation 46 **
***“Consolidation        of Variable Interest Entities, an interpretation of ARB No. 51”.***
**This        Interpretation requires a Company to consolidate the financial statements        of a“Variable Interest Entity”“VIE”, sometimes also known as a “special purpose        entity”, even if the entity does not hold a majority equity interest in the VIE.        The Interpretation requires that if a business enterprise has a “controlling        financial interest” in a VIE, the assets, liabilities, and results of the        activities of the VIE should be included in consolidated financial statements        with those of the business enterprise, even if it holds a minority equity        position. This Interpretation was effective immediately for all VIE’s created        after January 31, 2003; for the first fiscal year or interim period beginning        after June 15, 2003 for VIE’s in which a Company holds a variable interest that        it acquired before February 1, 2003. **

**In        April 2003, the FASB issued SFAS 149, Amendment of Statement 133 on Derivative        Instruments and Hedging Activities. This statement amends SFAS 133 to provide        clarification on the financial accounting and reporting of derivative        instruments and hedging activities and requires contracts with similar        characteristics to be accounted for on a comparable basis. The adoption of        SFAS        149 did not have any impact on the Company’s financial condition or results of        operations.**

**In        May 2003, the FASB issued SFAS 150, Accounting for Certain Financial Instruments        with Characteristics of both Liabilities and Equity. SFAS 150 establishes        standards on the classification and measurement of financial instruments        with        characteristics of both liabilities and equity. The adoption of SFAS 150        did not        have any impact on the Company’s financial condition or results of        operations.**

***Page            - 25***

----

**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        (Continued)**

**Summary        of Significant Accounting Principles (Continued)**

**Impact        of accounting standards (Continued)**

**In        December 2003, the FASB issued SFAS 132r, Employers' Disclosures about Pensions        and Other Postretirement Benefits—an amendment of FASB Statements No. 87, 88,        and 106. SFAS 132r revises employers’ disclosures about pension plans and other        postretirement benefit plans. It does not change the measurement or recognition        of those plans required by FASB Statements No. 87, Employers’ Accounting for        Pensions, No. 88, Employers’ Accounting for Settlements and Curtailments of        Defined Benefit Pension Plans and for Termination Benefits, and No. 106,        Employers’ Accounting for Postretirement Benefits Other Than Pensions. This        Statement retains the disclosure requirements contained in FASB Statement        No.        132, Employers’ Disclosures about Pensions and Other Postretirement Benefits,        which it replaces. It requires additional disclosures to those in the original        Statement 132 about the assets, obligations, cash flows, and net periodic        benefit cost of defined benefit pension plans and other defined benefit        postretirement plans. The adoption of SFAS 132r did not have any impact on        the        Company’s financial condition or results of operations.**

**In        December 2003, the FASB issued FIN No. 46R, “Consolidation of Variable Interest        Entities.” This requires that the assets, liabilities and results of the        activity of variable interest entities be consolidated into the financial        statements of the company that has a controlling financial interest. It also        provides the framework for determining whether an entity should be consolidated        based on voting interest or significant financial support provided to it.        The        adoption of FIN No. 46R did not have any impact on the Company’s financial        condition or results of operations. **

**In        November 2004, the FASB issued SFAS 151, Inventory Costs—an amendment of ARB No.        43, Chapter 4. The Statement amends the guidance of ARB No. 43, Chapter 4,        Inventory Pricing, by clarifying that abnormal amounts of idle facility expense,        freight, handling costs, and wasted materials (spoilage) should be recognized        as        current-period charges and by requiring the allocation of fixed production        overheads to inventory based on the normal capacity of the**

**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        (Continued)**

**Summary        of Significant Accounting Principles (Continued)**

**Impact        of accounting standards (Continued)**

**production        facilities. The adoption of SFAS 151 did not have any impact on the Company’s        financial condition or results of operations. **

**In        December 2004, the FASB issued a revision to SFAS 123 (revised 2004),        Share-Based Payment. The revision requires all entities to recognize        compensation expense in an amount equal to the fair value of share-based        payments granted to employees. The statement eliminates the alternative method        of accounting for employee share- based payments previously available under        APB        25. The provisions of SFAS 123R are effective as of the first interim period        that begins after June 15, 2005. The adoption of SFAS 123R did not have any        impact on the Company’s financial condition or results of operations.**

**In        December 2004, the FASB issued SFAS No. 153 "Exchanges of Nonmonetary        Assets-amendment of APB Opinion No. 29". Statement 153 eliminates the exception        to fair value for exchanges of similar productive assets and replaces it        with a        general exception for exchange transaction that do not have commercial        substance, defined as transaction that are not expected to result in significant        changes in the cash flows of the reporting entity. This statement is effective        for exchanges of nonmonetary assets occurring after June 15, 2005. The Company        does not believe that this recent accounting pronouncement will have a material        impact on their financial position or results of operations.**

***Page            - 26***

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**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        (Continued)**

**Summary        of Significant Accounting Principles (Continued)**

**Deferred        tax assets**

**Differences        between accounting rules and tax laws cause differences between the bases        of        certain assets and liabilities for financial reporting purposes and tax        purposes. The tax effects of these differences, to the extent they are        temporary, are recorded as deferred tax assets and liabilities under SFAS        109        and consist primarily of net operating loss carryforward amounting to        approximately $6,700,000. Because of the uncertainty of utilizing the net        operating loss carryforward, a valuation allowance of the maximum has been        provided against the deferred tax asset (See Note F).**

**Reclassification**

**Certain        2003 amounts have been reclassified to conform with 2004        classifications.**

**Advertising        **

**The        Company expenses all advertising as incurred. For the years ended December        31,        2004 and 2003, the Company charged to operations $95,146 and $278,318,        respectively.**

***Page            - 27***

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**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        (Continued)**

**Summary        of Significant Accounting Principles (Continued)**

**Allowance        for Doubtful Accounts**

**The        allowance for doubtful accounts on accounts receivable is charged to income        in        amounts sufficient to maintain the allowance for uncollectible accounts at        a        level management believes is adequate to cover any probable losses. Accounts        receivable are charged off against the allowance when collectibility is        determined to be permanently impaired (bankruptcy, lack of contact, account        balance over one year old, etc.).**

**Fair        Value of Financial Instruments**

**The        Company estimates that the fair value of all financial instruments at December        31, 2004, as defined in FASB 107, does not differ materially from the aggregate        carrying values of its financial instruments recorded in the accompanying        balance sheet. The estimated fair value amounts have been determined by the        Company using available market information and appropriate valuation        methodologies. Considerable judgment is required in interpreting market data        to        develop the estimates of fair value, and accordingly, the estimates are not        necessarily indicative of the amounts that the Company could realize in a        current market exchange.**

**Revenue        Recognition Policy**

**Revenue        is recognized when the earning process is complete and the risk and rewards        of        ownership have transferred to the customer, which is generally considered        to        have occurred upon the delivery of the media to our customer. The Company        recognizes revenue in accordance with SEC Staff Accounting Bulletin        101.**

**Transactions        that involve the exchange of goods or services for other goods or services        are        accounted for in accordance with APB 29 and the interpretations contained        in        EITF 93-11 and EITF 99-17. Accordingly, the Company generally records exchanges        at the carrying value of the goods or services exchanged, which is typically        zero, as the fair values of the goods or services exchanged lack**

***Page            - 28***

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**NOTE        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        (Continued)**

**Summary        of Significant Accounting Principles (Continued)**

**Revenue        Recognition Policy (Continued)**

**readily        determinable fair values within reasonable limits as the Company has no history        of receiving cash in similar transactions, and therefore the earnings process        has not been completed. **

**NOTE        B - FURNITURE AND EQUIPMENT**

**Property        and equipment at December 31, 2004 and 2003 consisted of:**

|                                                | **2004**      |   | **2003**      |
|-----------------------------------------------------|---------------|--------|---------------|
| **Furniture                  and equipment**        | **$328,026**  |   | **$303,562**  |
| **Software                  License**               | **25,000**    |   | **25,000**    |
| **Less:                  Accumulated depreciation** | **(267,669)** |   | **(202,511)** |
| **Less:                  Accumulated depreciation** | **(25,000)**  |   | **(16,666)**  |
|                                                |          |   |          |
| **Furniture                  and equipment, net**   | **$60,357**   |   | **$109,385**  |

**Depreciation        expense for the year ended December 31, 2004 and 2003 was $65,158 and $58,618,        respectively. Amortization expense was $8,334 and $8,333 for the years ended        December 31, 2004 and 2003, respectively.**

***Page            - 29***

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**NOTE        C - ACCRUED EXPENSES AND ADVANCES**

**Accrued        expenses at December 31, 2004 and 2003 consisted of the following        categories:**

|                                                   |   | **2004**       |   | **2003**     |
|--------------------------------------------------------|--------|----------------|--------|--------------|
| **Accrued                  Consulting expense**        |   | **$354,421**   |   | **$316,133** |
| **Accrued                  Office expense**            |   | **81,473**     |   | **102,845**  |
| **Accrued                  Professional fees expense** |   | **176,869**    |   | **98,646**   |
| **Accrued                  Website/Internet expense**  |   | **255,007**    |   | **163,568**  |
| **Accrued                  Other expenses**            |   | **35,514**     |   | **12,614**   |
| **Accrued                  Wages payable**             |   | **116,350**    |   | **253,850**  |
| **Accrued                  Media advertising**         |   | **44,857**     |   | **35,000**   |
| **Total                  Accrued Expenses**            |   | **$1,064,491** |   | **$982,656** |

**Advances        were made by another company and individuals for operating expenses during        the        years ended December 31, 2004 and 2003. The total amount extended was $86,353        and $26,565, respectively. The advances were made on open terms and without        interest.**

**NOTE        D - RELATED PARTY TRANSACTIONS**

**A        shareholder and spouse of the Company President advanced money without interest        to the Company in 2004 and 2003 to be used in daily operations. If the interest        expense was imputed it would be immaterial to the financial statements taken        as        a whole and thus is not included. The balances at December 31, 2004 and 2003        were $611,946 and $652,036, respectively. **

**The        President charges the Company for his management fees in lieu of an employee        salary. Management fees for the year ended December 31, 2004 and 2003 $93,257        and $87,162, respectively and are included in consulting in the Statement        of        Operations and Accumulated Deficit. XRAYMEDIA owed the President’s management        company $107,219 as of December 31, 2004 for these services which are included        in accounts payable on the Balance Sheet. In addition the President advanced        the        Company $153,845 during the year without specified terms of repayment and        without interest. During the year ended December 31, 2004 1,000,000 convertible        shares of preferred stock were issued to the President in consideration for        services to the Company. The valuation was based on 70% of fair market value        on        the date of issuance and as if the **

**NOTE        D - RELATED PARTY TRANSACTIONS (Continued)**

**shares        were fully converted for a total valuation of $9,100,000 and is recognized        in        compensation expense in the Statements of Operations and Accumulated Deficit.        If        converted, the stock remains covered by the SEC‘s control position release        rules**

**NOTE        E - STOCK PERFORMANCE PLAN**

**The        Board of Directors offers common stock, on a discretionary basis, to certain        individuals who have been instrumental in the Company’s continuance. During the        years ended December 31, 2004 and 2003, 7,830,487 and 1,000,000 shares were        issued of common stock under the stock performance plan, respectively. The        shares issued are valued at fair market value at the date of issuance, ranging        from $0.03 to $0.40 per share, and were recognized in compensation expense        in        the Statements of Operations and Accumulated Deficit. **

**NOTE        F - COMMON STOCK**

**During        the year ended December 31, 2003 the Company was authorized to increase common        shares from 100 million to 250 million shares. Additionally, the Company        was        approved to add a new class of convertible preferred stock. Convertible        Preferred stock shares authorized are 1 million with par value of $0.001        and are        convertible to common stock 1 for 100 common shares with all voting rights.        The        Company changed its ticker symbol to XRYM in November        2003.**

**During        the year ended December 31, 2003, private placement sales of common stock        at        prices ranging from $0.025 to $0.125 per share, to accredited investors,        were        arranged for 14,304,722 shares. Total amount of capital raised through this        private placement is $750,956 and is reflected in the Statement of Stockholders’        Equity. Stock issued in 2003, with the exception of stock issued for legal        services as described above, is subject Rule 144        restrictions.**

**During        the year ended December 31, 2004, private placement sales of common stock        at        prices ranging from $0.03 to $0.12 per share, to accredited investors, were        arranged for 18,484,999 shares. Total amount of capital raised through this        private placement is $765,800 and is reflected in the Statement of Stockholders’        Equity. Private placement stock issued in 2004, is subject Rule 144        restrictions.**

***Page            - 30***

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**NOTE        F - COMMON STOCK (Continued)**

**At        December 31, 2004 and 2003 share subscriptions for 333,333 and 4,038,333        shares        of common stock, respectively, were received, ranging from $0.03 to $0.15        per        share for a total of $11,000 and $489,600, respectively.**

**Subsequent        to December 31, 2004 the Company issued 13,500,000 shares of common stock,        as        discussed further in Note O.**

**Future        share issuance is restricted by the following:**

| **Unexpired                  warrants as of December 31, 2004**               | **1,060,000**   |   |
|-------------------------------------------------------------------------------|-----------------|--------|
| **Unconverted                  preferred shares**                             | **100,000,000** |   |
| **Cashless                  warrants exercised in 2004 to be issued in 2005** | **101,538**     |   |
| **Remaining                  cash subscriptions from December 31, 2004**      | **333,333**     |   |
| **Total                  share issuance restriction**                         | **101,494,871** |   |
| **Total                  shares issued as of December 31, 2004**              | **224,957,250** |   |
| **Total                  possible shares**                                    | **326,452,121** |   |
|                                                                          |            |   |

**The        Company issued warrants during the course of private placement offerings.        The        warrants can be converted into shares of stock in lieu of payment through        a        formula which divides the value of the warrants at the time the conversion        right        is exercised by the market value. Earnings per share is not adjusted to include        the weighted average outstanding warrants as to do so would be        antidilutive.**

**As        of December 31, 2004 and the date of this report the unexpired cashless warrants        were calculated to be approximately 1,060,000 and 120,000, respectively.        Significant amounts of warrants were unexercised and expired during the first        quarter of 2005.**

***Page            - 31***

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**NOTE        G - NET OPERATING LOSS CARRY FORWARD**

**The        Company’s net operating loss carrryforward since inception is as        follows:**

| **Year**      | **Net                  Operating Loss** | **Year                  of****Expiration** |
|---------------|-----------------------------------------|--------------------------------------------|
| **2004**      | **15,633,919**                          | **2024**                                   |
| **2003**      | **2,012,733**                           | **2023**                                   |
| **2002**      | **1,679,917**                           | **2022**                                   |
| **2001**      | **1,571,200**                           | **2021**                                   |
| **2000**      | **1,671,139**                           | **2020**                                   |
| **1999**      | **205,851**                             | **2019**                                   |
| **1994-1998** | **1,541,236**                           | **2014-2018**                              |
|          |                                    |                                       |
|          | **$24,315,995**                         |                                       |

**SFAS        No. 109 requires a valuation allowance to be recorded when it is more likely        than not that some or all of the deferred tax assets will not be realized.        The        Company has recorded a valuation allowance for the full amount of the net        deferred tax asset because of uncertainties as to the amount of taxable income        that would be generated in future years. The change in the valuation allowance        was $6,337,243 and $811,857 for the years ended December 31, 2004 and 2003,        respectively.**

**NOTE        H - **
**OTHER        INCOME**

**The        other income for the year ended December 31, 1999 arose from the forgiveness        of        certain indebtedness to an unrelated stockholder.**

**NOTE        I - GOING CONCERN**

**The        Company has had minor sales and suffered recurring losses from operations        that        raise substantial doubt about its ability to continue as a going concern.        However, the financial statements do not include any adjustments that might        result from the outcome of this uncertainty.**

**The        Company has been in the development stage since March 1, 1994. It is        the**

**NOTE        I - GOING CONCERN (Continued)**

**Company’s        intention to grow through generating sales. However, in order to support        existing operations, the Company plans to seek additional financing, form        strategic partnerships to increase market share, and acquire additional        shareholder capital. The ability to achieve these objectives raises substantial        doubt about the company’s ability to continue as a going concern.**

**NOTE        J - JOINT VENTURES**

**In        2003, the Company signed five Joint Venture agreements to generate advertising        revenue. Two were through the sale of advertising and related media services        through the Live Media Marketplace, which is further described in Note A.        The        other three are based on the Company purchasing advertising for their respective        products. Each of the agreements provides for a sharing of the net revenue        generated as a result of the media advertising between the joint venture        partners, as described in the table below. The Company does not have equity        interest or management rights in any of the joint ventures. Their investment        in        all of the joint ventures is $0. Joint venture A and B have Company share        issuance clauses for reaching certain levels of sales beyond the net revenue        sharing agreement. **

**Joint        venture F was the only joint venture signed during 2004. The transaction        fee        (15% of the media trade) is split between the two parties. Additionally,        if        Xraymedia brings the buyer to the purchase they receive 50% of the net profits        from the sale. **

|  **Joint                  Venture** |   | **Company                  Investment****In                  Joint Venture** |   | **Profit                  Sharing Percentage** |   | **Joint                  Venture revenue for 2004** |
|------------------------------------------|--------|------------------------------------------------------------------------------|--------|------------------------------------------------|--------|-----------------------------------------------------|
| **A**                                    |   | **$0**                                                                       |   | **50%**                                        |   | **$0**                                              |
| **B**                                    |   | **$0**                                                                       |   | **50%**                                        |   | **$0**                                              |
| **C**                                    |   | **$0**                                                                       |   | **20%**                                        |   | **$0**                                              |
| **D**                                    |   | **$0**                                                                       |   | **40%-50%**                                    |   | **$0**                                              |
| **E**                                    |   | **$0**                                                                       |   | **15%-20%**                                    |   | **$1,588**                                          |
| **F**                                    |   | **$0**                                                                       |   | **7.5%-50%**                                   |   | **$0**                                              |

**During        the year ended December 31, 2004 and 2003 $1,588 and $0, respectively, in        revenues were generated under the above agreements and the Company incurred        $95,146 and $278,318 in media advertising expenses associated with the joint        ventures during the same period.**

***Page            - 32***

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**NOTE        J - JOINT VENTURES (Continued)**

**Joint        ventures D & E were discontinued by mutual consent during the year ended        December 31, 2004.**

**NOTE        K - COMMITMENTS**

**During        February 2003 the Company signed a three-year lease agreement for office        space        in Vancouver, B.C. The term of the lease extended from May 2003 through April        2006. The minimum monthly rent payments are $6,830. Future minimum lease        payments are as follows:**

**2005                        81,960               **

**2006                      **
**         27,320**

**Total                      **
**$        109,280**

**Rental        and other occupancy expenses for the years ended December 31, 2004 and 2003        is        $86,658 and $78,273, respectively.**

**NOTE        L - STATUTORY VIOLATION**

**During        the year ended December 31, 2002 the Company did not remit required payroll        taxes for employee withholdings and Company related payroll tax expenses.        These        withholdings and expenses were accrued as an accounts payable at December        31,        2002 in the amount of $47,540, including violation penalties and interest        in the        amount of $22,809. Subsequently, in 2003, the Canadian Revenue Agency (CRA)        assessed a tax lien against the Company for these unpaid payroll taxes. The        Company made the final payment during the quarter ended September 30, 2004.        The        total amount owing CRA at September 30, 2004, in this regard is        $0.**

**During        the third quarter of 2004 the CRA conducted a further audit and assessed        an        additional $30 for the year 2003, but advised that some portion of earlier        penalties/interest would be reversed. CRA does not make a practice of cash        refunds in these matters. The amounts involved are not deemed sufficient        to        require a restatement of prior financials, but have created a reverse balance        in        interest/penalty expenses for the year ended December 31, 2004. The Company        again fell into arrears in remitting payroll taxes in late 2004. The Company        has        included in its accrued expenses approximately $11,000 for these unpaid payroll        taxes including the Company’s estimate of any penalties.**

**NOTE        M - THREATENED LITIGATION**

**Due        to the on-going negative cash flow the Company has been unable to pay certain        vendors for services. Certain items have been forwarded to collection agencies        and legal action has been threatened. No additional liability has been accrued        beyond the original amount payable.**

**NOTE        N - CONTINGENCIES**

**In        October 2004, an action was filed against the Company for alleged breach        of        contract. The Plantiffs seek in excess of $20 Million in damages and issuance        of        125 Million shares of the Company’s Common Stock. The Company has filed an        answer and is vigorously defending the action, denying any and all liability,        and has filed a separate action against the principals of the Plantiff LLC’s        seeking damages. The action is in the preliminary stages and no discovery        has        been commenced.**

**Legal        experts hired by the Company cannot predict whether the likelihood of an        unfavorable outcome is probable or remote. Therefore, no liability has been        recognized by the Company as of the date of this report. While the outcome        of        this claim cannot be predicted with certainty, management does not believe        that        the outcome of any pending legal matters will have a material adverse effect        on        the financial position, although results of operations or cash flows could        be        affected in a particular period.**

**NOTE        O - SUBSEQUENT EVENTS (Unaudited)**

**Subsequent        to year end the Company issued a total of 13,500,000 shares of common stock.        The        common shares were issued for the following reasons and prices as indicated;        5,000,000 shares issued with no restrictions for legal services at $0.034        per        share; 2,500,000 shares issued with no restrictions for media development        at        $0.034 per share; 6,000,000 shares issued with Section 144 restrictions for        media development at $0.034 per share.**

**The        Company is in the preliminary stage of proposing amendments to the Articles        of        Incorporation to increase the authorized capital of the Company from 250        million        shares of Common Stock, par value $0.001, to 750 million shares of Common        Stock,        par value $0.001. Additionally, the proposed amendment includes the increase        in        Preferred Stock from 1 million to 11 million, par value $0.001 consisting        of        three separate classes; 1) 5,000,000 Preferred Stock Series A, par value        $0.001,        convertible at a rate of 1 to 100 shares of Common Stock, with all voting        rights        converted at the **

***Page            - 33***

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**NOTE        O - SUBSEQUENT EVENTS (Unaudited) (Continued)**

**same        rate, 2) 1 million shares of Preferred Stock Series B, par value $0.001,        converted at a rate of 1 to 1 share of Common Stock with all voting rights        converted at the same rate., and 3) 5 million shares of Preferred Stock Series        C, par value $0.001, with a conversion rate of 1 to 1 share of Common Stock        with        all voting rights converted at the same rate. The currently issued and        outstanding shares of Preferred Stock would be designated as the type 1        described above.**

**The        Company signed a Non-Exclusive Technology Master Licensing Agreement which        would        allow the non-exclusive sub-licensing of the XRYM System for a fee.**

**The        Company signed a revenue sharing agreement to externally market the XRYM        System        through the other parties clients and the general business        community.**

**These        events had no effect on the financial statements for the year ended December        31,        2004.**

***Page            - 34***

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**ITEM        8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS        **

**THE        COMPANY HAS HAD NO CHANGES IN OR DISAGREEMENTS WITH ITS ACCOUNTANTS IN ITS        THREE        MOST RECENT FISCAL YEARS OR ANY LATER INTERIM PERIOD. **

**PART        III **

**ITEM        9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND        CONTROL        PERSONS **

**XRAYMEDIA'S        DIRECTORS HOLD OFFICE UNTIL THE ANNUAL MEETING OF SHAREHOLDERS NEXT HELD        AFTER        THEIR ELECTION. THE OFFICERS AND DIRECTORS OF XRAYMEDIA AS OF MARCH 01, 2004        ARE        AS FOLLOWS: **

**--------------------------------------------------------------------------------------------------        **

**NAME                                                     AGE                                                    POSITION **

**--------------------------------------------------------------------------------------------------        **

**RAYMOND        DABNEY       40                             PRESIDENT, CHIEF EXECUTIVE **

**                                                                                       OFFICER AND DIRECTOR **

**--------------------------------------------------------------------------------------------------        **

**MEIR        KAHTAN                 47                              DIRECTOR **

**-------------------------------------------------------------------------------------------------        **

**Sarb        Teja                                          35                               DIRECTOR **

**-------------------------------------------------------------------------------------------------        **

**Raymond        Dabney was appointed President, CEO, and Director of XRAYMEDIA on October        25,        1999. From 1990 to present, Raymond Dabney has been the President and CEO        of        Command Communications, Inc. of Vancouver, British Columbia. From 1991 to        1993,        Mr. Dabney acted as the Western Regional General Manager of Unitel        Communications of Vancouver, British Columbia, and from 1988 to 1990 Mr.        Dabney        was in Inside Sales Manager for Morgan Whitney Trading Group of Venice Beach,        California.**

**Meir        Kahtan, was appointed as a director of XRAYMEDIA on February 7, 2000. Mr.        Kahtan        has over fifteen years of industry experience in the world of public relations        and advertising. He has initiated ad campaigns and media coverage for countless        financial, high technology, medical, legal, and real estate clients, and        as a        provider of advertising and public relations, was a forefront of the movement        to        the web. Mr. Kahtan heads up a public relations department at Miller        Advertising, a major New York agency, with which he has enjoyed a long and        fruitful association.**

**Sarb        Teja was appointed as a director of XRAYMEDIA on October 12, 2004. Mr. Teja        brings more than 10 years of financial management experience to XRAYMEDIA.        Most        recently, Mr. Teja held the position of Manager at KPMG LLP where he was        involved in several mergers and acquisition transactions involving both public        and private corporations in the high-technology sector. Complementing his        8        years of public accounting experience, Mr. Teja has also held the position        of        Director of Finance for the Multiple Sclerosis Society of Canada (B.C. Division)        as well as the position of Controller for a wireless software startup company        in        past years.**

**Professionally        qualified as a Certified General Accountant in 1998, Mr. Teja graduated from        the        British Columbia Institute of Technology (a Polytechnic Institute) in 1993        with        a Diploma in Financial Management. Additionally, Mr. Teja is nearing completion        of his part-time studies towards an Honors Bachelor of Commerce degree from        the        Laurentian University in Ontario, Canada.**

***Page            - 35***

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**ITEM        10.     EXECUTIVE COMPENSATION **

**THE        FOLLOWING TABLE PROVIDES SUMMARY INFORMATION FOR THE YEARS 1999, 2000, 2001        AND        2002 CONCERNING CASH AND NON-CASH COMPENSATION PAID OR ACCRUED BY XRAYMEDIA        TO        OR ON BEHALF OF THE PRESIDENT AND ANY OTHER EMPLOYEE(S) TO RECEIVE COMPENSATION        IN EXCESS OF $100,000. **

**SUMMARY        COMPENSATION TABLE **

| **ANNUAL                  COMPENSATION                     ** | **   LONGTERM                  COMPENSATION** |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|------------|
| **NAME                  AND**                                                                                                                                          |                                                         |       |   |   | **RESTRICTED** |   |
| **PRINCIPAL**                                                                                                                                                          | **YEAR**                                                     | **SALARY** | **BONUS** | **OTHER                  ANNUAL** | **STOCK** |   |
| **POSITION**                                                                                                                                                           | **($)**                                                      | **($)**    | ** COMPENSATION** | **AWARD** | **(S)** |   |
| ** RAYMOND                  DABNEY**                                                                                                                              | **1999**                                                     | **10,000** | **0** | **0** | **0** |   |
| **PRESIDENT,                  CEO**                                                                                                                                    | **2000**                                                     | **72,000** | **0** | **0** | **20,000,000(1)** |   |
| **AND                  DIRECTOR**                                                                                                                                      | **2001**                                                     | **69,786** | **0** | **$525,000** | **15,000,000(2)** |   |
|                                                                                                                                                                   | **2002**                                                     | **75,250** | **0** | **$525,000** | **7,500,000(3)** |   |
|                                                                                                                                                                   | **2003**                                                     | **87,162** | **0** | **0** | **0** |   |
|                                                                                                                                                                   | **2004**                                                     | **93,257** | **0** | **0** | **1,000,000                  preferred (4)** |   |
| **MEIR                  KAHTAN**                                                                                                                                       | **1999**                                                     | **0**      | **0** | **0** | **0** |   |
| **DIRECTOR**                                                                                                                                                           | **2000**                                                     | **50,622** | **0** | **0** | **0** |   |
|                                                                                                                                                                   | **2001**                                                     | **68,348** | **0** | **0** | **0** |   |
|                                                                                                                                                                   | **2002**                                                     | **60,000** | **0** | **0** | **0** |   |
|                                                                                                                                                                   | **2003**                                                     | **60,000** | **0** | **0** | **0** |   |
|                                                                                                                                                                   | **2004**                                                     | **60,000** | **0** | **0** | **0** |   |

**          **

**(1)        MR. DABNEY RECEIVED THE 20,000,000 SHARES IN CONSIDERATION FOR CREATING AND        IMPLEMENTING XRAYMEDIA'S EXTENDED BUSINESS MODEL. **

**(2)        MR. DABNEY RECEIVED THE 15,000,000 SHARES IN RECOGNITION OF SERVICES PERFORMED.        THE SHARES WERE VALUED AT $0.035 PER SHARE. **

**(3)        MR. DABNEY RECEIVED THE 7,500,000 SHARES IN RECOGNITION OF SERVICES PERFORMED.        THE SHARES WERE VALUED AT $0.03 PER SHARE. **

**(4)        MR. DABNEY RECEIVED 1,000,000 PREFERRED SHARES OF STOCK IN RECOGNITION OF        SERVICES PERFORMED. THE SHARES WERE VALUED AT $9 PER SHARE BASED ON A 1 TO        100        CONVERSION RATE TO COMMON STOCK AT $0.09 PER SHARE.**

**SALARIES        ARE PRIMARILY ON AN ACCRUAL RATHER THAN CASH BASIS. **

**COMPENSATION        OF DIRECTORS **

**THERE        IS NO PLAN IN PLACE AT THIS TIME FOR XRAYMEDIA'S DIRECTORS TO BE COMPENSATED,        FOR SERVICES RENDERED IN THIS CAPACITY. **

**ITEM        11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

**THE        FOLLOWING TABLE SETS FORTH CERTAIN INFORMATION REGARDING THE BENEFICIAL        OWNERSHIP OF THE STOCK OF XRAYMEDIA AS OF MARCH 18, 2005, BY EACH SHAREHOLDER        WHO IS KNOWN BY XRAYMEDIA TO BENEFICIALLY OWN MORE THAN 5% OF THE OUTSTANDING        COMMON STOCK, BY EACH DIRECTOR, AND BY ALL EXECUTIVE OFFICERS AND DIRECTORS        AS A        GROUP. **

***Page            - 36***

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|                                                                                       |                                                                              |                                                       | **Percent                  of Class** |          |
|--------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------------|---------------|
| **Title                  of Class** **Beneficial                  Owner**   | **Name                  and Address of****Beneficial                  Ownership** | **Amount                  and Nature of****Stockholdings** | **Common**                            | **Preferred** |   |
| **(a)                  Common Stock**                                                      | **Raymond                  Dabney**                                               | **47,785,000**                                             | **20.04%**                            | **0**         |   |
|                                                                                       | **555                  West Hastings Street,**                                    |                                                       |                                  |          |   |
|                                                                                       | **Suite                  1560**                                                   |                                                       |                                  |          |   |
| **(b)                  Preferred Stock**                                                   | **Vancouver,                  B.C., Canada**                                      | **1,000,000**                                              | **0**                                 | **100%**      |   |
|                                                                                       | **V6B                  4N6**                                                      |                                                       |                                  |          |   |
| **(a)                  Common Stock**                                                      | **Meir                  Kahtan**                                                  | **7,750,000**                                              | **3.25%**                             | **0**         |   |
|                                                                                       | **555                  West Hastings Street,**                                    |                                                       |                                  |          |   |
|                                                                                       | **Suite                  1560**                                                   |                                                       |                                  |          |   |
| **(b)                  Preferred Stock**                                                   | **Vancouver,                  B.C., Canada**                                      | **0**                                                      | **0**                                 | **0**         |   |
|                                                                                       | **V6B                  4N6**                                                      |                                                       |                                  |          |   |
| **(a)                  Common Stock **                                                | **All                  Executive Officers**                                       | **55,535,000**                                             | **23.29%**                            | **0**         |   |
|                                                                                       | **and                  Directors as a Group**                                     |                                                       |                                  |          |   |
|                                                                                       | **(3                  people)**                                                   |                                                       |                                  |          |   |
| **(b)                  Preferred Stocks**                                             |                                                                              | **1,000,000**                                              | **0**                                 | **100%**      |   |

***NOTE:        SUBSEQUENT TO DECEMBER 31, 2004, 5,000,000 COMMON SHARES WERE ISSUED TO MR.        KAHTAN. **

**ITEM        12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS        **

**ON        JULY, 29, 1999, XRAYMEDIA ENTERED INTO AN AGREEMENT WITH LAURIER LIMITED        WHEREBY        XRAYMEDIA GAINED EXCLUSIVE RIGHTS TO ITS AUCTION AND AD SERVING SOFTWARE        FROM        LAURIER LIMITED, IN EXCHANGE FOR 10,000,000 RESTRICTED SHARES OF XRAYMEDIA'S        COMMON STOCK VALUED AT $9,000.00 **

**ON        NOVEMBER 12, 1999, XRAYMEDIA ENTERED INTO AN AGREEMENT WITH MEIR KAHTAN,        (A        DIRECTOR OF XRAYMEDIA) PUBLIC RELATIONS, A DIVISION OF MILLER ADVERTISING        AGENCY, INC. THE AGREEMENT WILL PROVIDE XRAYMEDIA WITH PROMOTIONAL AND BUSINESS        CONSULTING AND A PUBLIC RELATIONS CAMPAIGN. THE AGREEMENT CALLS FOR THE PAYMENT        OF $5,000 A MONTH TO MR. KAHTAN AS COMPENSATION FOR HIS SERVICES IN THIS        CAPACITY THE TERM OF THIS AGREEMENT COMMENCED MARCH 8, 2000, AND MAY BE CANCELED        AT ANY TIME BY EITHER PARTY UPON 60 DAYS PRIOR NOTICE. **

**ON        MARCH 1, 2000, IN A UNANIMOUS BOARD MEETING VOTE, WITH MR. RAYMOND DABNEY        ABSTAINING, THE BOARD APPROVED THE ISSUANCE OF 20,000,000 RESTRICTED SHARES        OF        XRAYMEDIA'S COMMON STOCK TO RAYMOND DABNEY IN EXCHANGE FOR THE EXTENDED BUSINESS        MODEL OF XRAYMEDIA.COM. THE EXTENDED BUSINESS MODEL IS TO INCLUDE A FULL        RANGE        OF MEDIA SERVICES VIA A BRAND NEW INTERNET MEDIA SUPERSITE INCLUDING ASSEMBLING        THE PARTNERS AND TECHNOLOGY THAT WOULD ENABLE XRAYMEDIA TO ENGAGE IN THE        BUSINESS OF SELLING CONVENTIONAL MEDIA ADVERTISING SPACE, ONLINE ADVERTISING,        AND ADVERTISING AGENCY AND PUBLIC RELATIONS SERVICES VIA A NEW INTERNET WEBSITE.        **

**DURING        THE YEAR 2002, MR. RAYMOND DABNEY WAS ISSUED 7,500,000 RESTRICTED SHARES        OF        XRAYMEDIA'S COMMON STOCK IN EXCHANGE FOR SERVICES RENDERED. THE STOCK IS        ADDED        TO MR. DABNEY'S CONTROL POSITION OF SEC RULE 144 RESTRICTED COMMON STOCK.        **

**THE        COMPANY AWARDED 1,000,000 PREFERRED SHARES OF STOCK TO MR. RAYMOND DABNEY        DURING        February 2004 IN RECOGNITION OF SERVICES PERFORMED. THE STOCK IS ADDED TO        MR.        DABNEY'S CONTROL POSITION OF SEC RULE 144 RESTRICTED COMMON STOCK.**

**ITEM        13.     EXHIBITS AND REPORTS ON FORM 8-K **

**(A)        EXHIBITS: EXHIBITS REQUIRED TO BE ATTACHED BY ITEM 601 OF REGULATION S-B        ARE        LISTED IN THE INDEX TO EXHIBITS BEGINNING ON PAGE 23 OF THIS FORM**

**10-KSB,        WHICH IS INCORPORATED HEREIN BY REFERENCE. **

**(B)        REPORTS ON FORM 8-K: NOVEMBER 30, 2000, THE COMPANY FILED A FORM 8-K IN RESPECT        TO THE RESIGNATION OF ONE OF OUR DIRECTORS, BRIAN WALKER. MR. WALKER HAD        SUBMITTED A WRITTEN RESIGNATION TO US ON NOVEMBER 1, 2000.**

**ITEM        14.     PRINCIPAL ACCOUNTANT FEES AND        SERVICES**

| **(1)  ** | **AUDIT                  FEES** |
|---------------------|---------------------------------|

**THE        AGGREGATE FEES BILLED FOR PROFESSIONAL SERVICES RENDERED BY Bedinger &        Company FOR THE AUDIT OF THE REGISTRANT’S ANNUAL FINANCIAL STATEMENTS AND REVIEW        OF THE FINANCIAL STATEMENTS INCLUDED IN THE REGISTRANT’S FORMS 10-QSB OR        SERVICES THAT ARE NORMALLY PROVIDED BY THE ACCOUNTANT IN CONNECTION WITH        STATUTORY AND REGULATORY FILINGS OR ENGAGEMENTS FOR FISCAL YEAR 2004 WERE        $37,215.**

| **(2)  ** | **AUDIT                  COMMITTEE POLICIES AND                  PROCEDURES** |
|---------------------|-------------------------------------------------------------------------------|

**THE        REGISTRANT DOES NOT HAVE AN AUDIT COMMITTEE. THE BOARD OF DIRECTORS OF THE        REGISTRANT APPROVED ALL OF THE SERVICES RENDERED BY Bedinger & Company FOR        FISCAL YEAR 2004.**

***Page            - 37***

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| **(3)  ** | **AUDIT                  WORK ATTRIBUTED TO PERSONS OTHER THAN Bedinger & Company’S FULL-TIME,                  PERMANENT EMPLOYEES** |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

**NOT        APPLICABLE.**

**[THIS        SPACE LEFT BLANK INTENTIONALLY] **

***Page            - 38***

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**SIGNATURES        **

**IN        ACCORDANCE WITH SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, THE        REGISTRANT CAUSED THIS FORM 10-KSB TO BE SIGNED ON ITS BEHALF BY**

**THE        UNDERSIGNED, THEREUNTO DULY AUTHORIZED, THIS 14TH DAY OF April 2005.**

**XRAYMEDIA        INC. **

**/S/        RAYMOND DABNEY **

**NAME:        RAYMOND DABNEY **

**TITLE:        PRESIDENT, CEO AND DIRECTOR **

**IN        ACCORDANCE WITH THE EXCHANGE ACT, THIS REPORT HAS BEEN SIGNED BELOW BY THE        FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON        THE        DATES INDICATED. **

**                   SIGNATURE                            TITLE                            DATE **

**             **
**/S/        RAYMOND DABNEY **
**                PRESIDENT AND DIRECTOR                      APRIL 14, 2005. **

**             RAYMOND DABNEY **

***Page            - 39***

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**EXHIBIT        31 **

***Page            - 40***

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**GLOBETRAC            INC. **

**CERTIFICATIONS            PURSUANT TO **

**SECTION            302 OF THE SARBANES-OXLEY ACT OF 2002 **

**CERTIFICATION            **

*/s/            *

* *

**                                **

***Page            - 41***

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**GLOBETRAC          INC. **

**CERTIFICATIONS          PURSUANT TO **

**SECTION          302 OF THE SARBANES-OXLEY ACT OF 2002 **

**CERTIFICATION          **

* *
*/s/          *

**                                **

***Page            - 42***

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**EXHIBIT        32 **

***Page            - 43***

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**CERTIFICATION            PURSUANT TO **

**18            U.S.C. SECTION 1350, **

**AS            ADOPTED PURSUANT TO **

**SECTION            906 OF THE SARBANES-OXLEY ACT OF 2002 **

* *

*/s/            Raymond Dabney*

***Page            - 44***

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**CERTIFICATION          PURSUANT TO **

**18          U.S.C. SECTION 1350, **

**AS          ADOPTED PURSUANT TO **

**SECTION          906 OF THE SARBANES-OXLEY ACT OF 2002 **

*/s/          *

***Page            - 45***

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**ITEM        2.     DESCRIPTION OF EXHIBITS. **

**INDEX        TO EXHIBITS **

**EXHIBIT        **

**NO.                  PAGE NO.                         DESCRIPTION **

**2(A)                  *                            ARTICLES OF MERGER AND PLAN AND OF MERGER,        PORT        INDUSTRIES, **

**                                                               INC. MARCH 1, 1994. (INCORPORATED BY REFERENCE FILED WITH**

**                                                               THE COMPANY'S FORM 10-SB/A-2 ON MARCH 29, 2000). **

**2(B)                  *                            STOCK PURCHASE AGREEMENT DATED SEPTEMBER        20, 1996.        (DIGITAL **

**                                                                REPORTING, INC. ACQUIRES ALL OF THE ISSUED AND OUTSTANDING**

**                                                                SHARES OF R&D INDUSTRIES, INC.). (INCORPORATED BY REFERENCE**

**                                                               FILED WITH THE COMPANY'S FORM 10-SB/A-2ON MARCH 29, 2000).**

**2(C)                  *                            DIGITAL REPORTING, INC. BOARD RESOLUTION        DATED        SEPTEMBER 3, **

**                                                               1997, AUTHORIZING THE ACQUISITION OF ALL THE OUTSTANDING **

**                                                               STOCK OF CYBERGUIDES, INC. (INCORPORATED BY REFERENCE FILED**

**                                                              WITH        THE COMPANY'S FORM 10-SB/A-2 ON MARCH 29, 2000). **

**3(I)(A)                *                            ARTICLES OF INCORPORATION OF PORT INDUSTRIES, INC.**

**                                                                  (INCORPORATED BY REFERENCEFILED WITH THE COMPANY'S FORM**

**                                                                  10-SB/A-2 ON MARCH 29, 2000). **

**3(I)(B)                 *                            ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION OF PORT        **

**                                                                  INDUSTRIES, INC. DATED OCTOBER 28, 1969 AUTHORIZING TOTAL **

**                                                                 NUMBER OF SHARES TO BE 30,000 AT $10.00 EACH. (INCORPORATED**

**                                                                 BY REFERENCE FILED WITH THE COMPANY'S FORM 10-SB/A-2 ON**

**                                                                 MARCH 29, 2000). **

**3(I)(C)                 *                           ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION OF PORT        **

**                                                                  INDUSTRIES, INC. DATED MARCH 6, 1972 AUTHORIZING THE NUMBER**

**                                                                 OF SHARES TO BE 1,000,000 AT $.10 EACH. (INCORPORATED BY **

**                                                                  REFERENCE FILED WITH THE COMPANY'S FORM 10-SB/A-2 ON MARCH**

**                                                                  29, 2000). **

**3(I)(D)                *                            MINNESOTA SECRETARY OF STATE AMENDMENT OF ARTICLES OF**

**                                                                 INCORPORATION (DIGITAL REPORTING INC. CHANGES ITS NAME TO **

**                                                                 CYBERGUIDES INTERNATIONAL, INC., SEPTEMBER 30, 1997). **

**                                                                (INCORPORATED BY REFERENCE FILED WITH THE COMPANY'S FORM**

**                                                                 10-SB/A-2 ON MARCH 29, 2000). **

**3(I)(E)                 *                            MINNESOTA SECRETARY OF STATE AMENDMENT OF ARTICLES OF**

**                                                                 INCORPORATION (CYBERGUIDES INTERNATIONAL, INC., CHANGES ITS**

**                                                                 NAME TO AJA MERCHANT BANKING CORPORATION FEBRUARY 10, 1998)**

**                                                                (INCORPORATED BY REFERENCE FILED WITH THE COMPANY'S FORM**

**                                                                10-SB/A-2 ON MARCH 29, 2000). **

***Page            - 46***

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**3(I)(F)                     *                           MINNESOTA SECRETARY OF STATE AMENDMENT        OF        ARTICLES OF **

**                                                                            INCORPORATION (AJA MERCHANT BANKING CORPORATION CHANGES ITS**

**                                         NAME        TO IMAGE PHOTO SYSTEMS, INC. DECEMBER 3, 1998). **

**                                                                            (INCORPORATED BY REFERENCE FILED WITH THE COMPANY'S FORM**

**                                                                             10-SB/A-2 ON MARCH 29, 2000). **

**3(I)(G)                    *                           MINNESOTA SECRETARY OF STATE AMENDMENT        OF        ARTICLES OF **

**                                                                           INCORPORATION (IMAGE PHOTO SYSTEMS, INC. CHANGES ITS NAME**

**                                                                          TO XRAYMEDIA.COM, INC., SEPTEMBER 16, 1999). (INCORPORATED**

**                                                                         BY REFERENCE FILED WITH THE COMPANY'S FORM 10-SB/A-2 ON **

**                                                                          MARCH 29, 2000). **

**3(I)(H)                     *                            ARTICLES OF INCORPORATION        OF IMAGE PHOTO        SYSTEMS, INC. **

**                                                                             (INCORPORATED BY REFERENCE FILED WITH THE COMPANY'S FORM **

**                                                                             10-SB/A-2 ON MARCH 29, 2000). **

**3(II)(A)                    *                            BY-LAWS OF PORT INDUSTRIES,        INC.        (INCORPORATED BY REFERENCE **

**                                                                              FILED WITH THE COMPANY'S FORM 10-SB/A-2 ON MARCH 29, 2000).**

**3(II)(B)                     *                            BY-LAWS OF IMAGE PHOTO        SYSTEMS, INC.        (INCORPORATED BY **

**                                                                               REFERENCE FILED WITH THE COMPANY'S FORM 10-SB/A-2 ON MARCH**

**                                                                              29, 2000). **

**23        22                                        CONSENT OF INDEPENDENT        PUBLIC ACCOUNTANT,        DATED MARCH 15, **

**                                     2000.        **

***Page            - 47***

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**MATERIAL        CONTRACTS **

**EXHIBIT        **

**NO.                     PAGE        NO.                  DESCRIPTION **

**6(A)                     *                            AGREEMENT, DATED JULY        29, 1999, BETWEEN        XRAYMEDIA.COM, **

**                                                                         INC. AND LAURIER LIMITED. (INCORPORATED BY REFERENCE FILED WITH THE**

**                                                                         COMPANY'S FORM 10- SB/A-2 ON MARCH 29, 2000). **

**10(I)                     *                            BENEFIT PLAN DATED OCTOBER        15, 1999.        (INCORPORATED BY **

**                                                                          REFERENCE FILED WITH THE COMPANY'S FORM 10-SB/A-2 ON MARCH**

**                                                                         29, 2000). **

**10(II)                     *                            MANAGEMENT AGREEMENT BETWEEN        MEIR KAHTAN        AND **

**                                                                           XRAYMEDIA.COM, INC. DATED MARCH 15, 2000. (FILED WITH AMENDMENT NO. 1 TO        **

**                                        10-KSB        ON MAY 8, 2000). **

***Page            - 48***

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**CONSENT        OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS **

**BEDINGER        & COMPANY **

**CERTIFIED        PUBLIC ACCOUNTANTS **

**1200        CONCORD AVE, SUITE 250 **

**CALIFORNIA        **

**MARCH        18, 2005 **

**CONSENT        OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS **

**WE        HEREBY CONSENT TO USE IN THIS FORM 10 - SB/A-2 OF OUR REPORT DATED MARCH        18,        2005, RELATING TO THE FINANCIAL STATEMENTS OF XRAYMEDIA.COM FOR THE YEARS        ENDED        DECEMBER 31, 2004 AND 2003.**

**/S/BEDINGER        & COMPANY **

**BEDINGER        & COMPANY **

**CERTIFIED        PUBLIC ACCOUNTANTS **

***Page            - 49***

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