**UNITED STATES**
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 **FORM 10-QSB**
 
 
 [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2004
 
 [  ] Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 (No fee required) for the transition period from to
 
 Commission file number:
 
 **XRAYMEDIA, Inc.**
 fka XRAYMEDIA.COM Inc.
 (Name of Small Business Issuer in Its Charter)
 
 **Minnesota**  **41-0951123**
 (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 [   ]
 
 ***Page - 1***
 
 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-QSB or any amendment to this Form 10-QSB [X].
 
 The issuer's total revenues for the three quarters ended September 30, 2004, were $69,098.
 
 On September 30, 2004, the number of shares outstanding of the registrant's Common Stock, $0.001 par value (the only class of voting stock), was 143,032,167. On September 30, 2004 and November 17, 2004, 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. As of November 17, 2004 the number of Common Shares outstanding was increased by 40,851,665 shares to a total 183,883,832. (See Note H)
 
 
 
 ***Page - 2***
 
 
 **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.
 
 
 ***Page - 3***
 **ITEM 1.  FINANCIAL STATEMENTS**
 
 
 
 
 **As used herein, the term "Company" refers to XRAYMEDIA, INC., a Minnesota Corporation, and its subsidiaries and predecessors unless otherwise indicated. Consolidated, unaudited, condensed interim financial statements including a balance sheet for the Company as of the quarter ended SEPTEMBER 30, 2004 and statements of operations, and statements of cash flows for the interim period up to the date of such balance sheet and the comparable period of the preceding year are attached hereto as Pages F - 1 through F - 9 and are incorporated herein by this reference.**
 ****
 ****
 (THIS SPACE LEFT BLANK INTENTIONALLY)
 
 
 
 ***Page - 4***
 **XRAYMEDIA, INC.**
 (FORMERLY XRAYMEDIA.COM, INC.)
 (A COMPANY IN THE DEVELOPMENT STAGE)
 BALANCE SHEETS (UNAUDITED)
 SEPTEMBER 30, 2004
 
 September 30**2004****ASSETS**CURRENT ASSETSCash and cash equivalents

$
3,843Accounts receivable


56,852Prepaid expensesTOTAL CURRENT ASSETS


60,695FIXED ASSETSFurniture and equipment, Net (Note B)


76,758Software License, Net (Note B)


1,908TOTAL FIXED ASSETS


78,666OTHER ASSETSSecurity deposit.


3,739Patents, copyright, domain protection - in progress (Note C)


924,000TOTAL OTHER ASSETS


927,739TOTAL ASSETS

$
1,067,100CURRENT LIABILITIESAccounts payable and Accrued expenses (Note D)

$
918,343Advance from related party ( Note E)


612,882Advance from company officer (Note E)


86,190TOTAL CURRENT LIABILITIES


1,617,415TOTAL LIABILITIES


1,617,415STOCKHOLDERS' EQUITY <DEFICIT>(Note G)Convertible Preferred Stock, par value $.001; 1,000,000


1,000shares authorized; 1,000,000 issued and outstanding at September 30, 2004


-Additional paid in capital


-Common Stock, par value $.001; 250,000,000 sharesauthorized; issued and outstanding 143,032,167 atSeptember 30, 2004143,033Additional paid in capital


19,741,309Shares subscribed


235,300Deficit at inception date


(746,875
)Accumulated deficit during the development stage


(19,893,987
)Common stock note receivable


(30,095
)TOTAL STOCKHOLDERS' EQUITY <DEFICIT>


(550,315
)TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY <DEFICIT>

$
1,067,100
 
 ***Page - 5***
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT (UNAUDITED)
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004, 2003, AND
 THE PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE) TO SEPTEMBER 30, 2004
 
 
 
 1-Mar-94Three Months Ended Sept 30,
Nine Months Ended Sept 30,

(inception of developmentstage) to2004


2003


2004


2003


9/30/2004$
$REVENUE


45,010


-


69,098


-


114,817COSTS AND EXPENSESPersonnel Costs


21,000


21,000


63,000


63,000


751,871Compensation expense


-


400,000


9,432,425


400,000


12,002,425Occupancy costs


19,113


22,864


62,491


61,341


432,968Professional fees


13,108


121,610


169,825


168,968


1,457,827Media advertising


6077


-


71,591


-


349,909Marketing


156,031


58,789


205,660


83,811


443,159Travel & promotion


41,668


49,390


101,975


84,152


434,150Consulting


148,350


21,978


308,299


59,607


738,775Bank charges


3,508


982


5,653


1,806


17,257Office supplies


16,905


23,038


59,922


59,545


355,280Communication


6,344


2567


17,556


11,025


169,933Insurance


48


343


147


665


77,933Miscellaneous


3,668


2,415


5,138


5,024


29,286Transfer fees


1,310


1,948


4,618


3,370


27,127Depreciation and amortization


18,663


16,562


55,183


49,686


293,571Bad debt expense


-


-





-


6,343Research and Development


56,548


35,342


252,954


130,231


1,002,113Investor relations


98,755


52,477


472,604


97,618


723,993TOTAL OPERATING EXPENSES


611,096


831,305


11,289,041


1,279,849


19,313,920NET OPERATING COSTS


(566,086
)

(831,305
)

(11,219,943
)

(1,279,849
)

(19,199,103
)OTHER INCOME<LOSS>Dissolution of Corp Reports


-


-





-


(503,507
)Other


-


-


-


-


(138,774
)-





-


-


-


(642,281
)OTHER EXPENSESInterest and penalties


(12,232
)

-


(10,282
)

6,312


12,527Other interest


(1,980
)

4,756


2,250


25,429


40,076(14,212
)

4,756


(8,032
)

31,741


52,603NET (LOSS)


(551,874
)

(836,061
)

(11,211,911
)

(1,311,590
)Accumulated deficit beginning


(19,342,113
)

(7,144,872
)

(8,682,076
)

(6,669,343
)Accumulated deficit ending


(19,893,987
)

(7,980,933
)

(19,893,987
)

(7,980,933
)

(19,893,987
)BASIC AND DILUTEDLOSS PER SHARE (NOTE A)


($0.003
)

($0.01
)

($0.09
)

($0.02
)WEIGHTED AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING


142,112,167


98,935,500


123,503,476


90,976,426 
 
 ***Page - 6***
 
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 STATEMENTS OF CASH FLOWS (UNAUDITED)
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004, 2003, AND
 THE PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE) TO SEPTEMBER 30, 2004


March 1, 1994(inception ofdevelopment stage) toNINE MONTHS Ended Sept 30,


September 30, 20042004


2003


(as restatedCASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(11,211,911
)
$
(1,311,590
)
$
(19,893,987
)Adjustments to reconcile net lossto net cash used by operating activities:Depreciation &Amortization


55,183


49,686


293,571Shares issued in exchange for servicesand charged to professional fees


232,825


118,000


487,325Shares issued for stock performance plan


332,425


400,000


1,876,675Shares issued under section 144-control position


9,100,000


-


10,150,000Shares issued for other services


1,750,500


64,500


2,055,500Abandonment of furniture & equipment


-


-


30,809Bad debt expense


-


-


6,343Write-off of goodwill


-


-


464,831CHANGES IN CURRENT ASSETS AND CURRENT LIABILITIES:<Increase> decrease in current assets:Prepaid expenses


-


(64,500
)

-Accounts receivable


(56,852
)

-


(63,195
)Security deposit


(2,473
)

7,903


(3,738
)Media inventory


-


(100,000
)

-Increase <decrease> in current liabilities:Accrued expenses


(16,378
)

20,272


554,081Accrued wages payable


(74,500
)

63,000


179,350Advances from


47,036


(29,208
)

912,488related partiesNET CASH USED FOR OPERATING ACTIVITIES


155,855


(781,937
)

(2,949,947
)CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition of furniture and equipment


(24,464
)

-


(378,046
)Acquisition of software


-


-


(25,000
)<Purchase> of goodwill


-


-


(464,831
)Acquisition of patent, copyright, and domain protection


(924,000
)

-


(924,000
)NET CASH <USED> FOR INVESTING ACTIVITIES


(948,464
)

-


(1,791,877
)CASH FLOWS FROM FINANCING ACTIVITIES:Issuance <repayment> of notes payable


-


-


1,704,807Shares issued for note


-


-


(95
)Shares subscribed


(254,300
)

156,000


235,300Sale of common stock


1,030,100


750,956


2,804,655Sale of preferred stock


1,000


-


1,000NET CASH PROVIDED BY FINANCINGACTIVITIES


776,800


906,956


4,745,667NET INCREASE <DECREASE> IN CASH


(15,809
)

125,019


3,843CASH, beginning of period


19,652


466


-CASH, end of period

$
3,843

$
125,485

$
3,843SUPPLEMENTAL DISCLOSURE:Penalties and interest

$
1,250

$
6,312

$
26,009Income taxes


0


0


0Penalties and interestOther Interest expense

$
**-**

$
25,429

$
42,056Noncash investing and financing activitiesShares issued for debt


-


-Shares issued for services & charged to professional fees


232,825


182,500Shares issued for stock performance plan


332,425


400,000Shares issued under section 144 - control position


9,100,000


-Shares issued in exchange for extended business model


-


-Shares issued in exchange for services


1,750,500


-Shares issued for intangible assets


924,000


**-**$
12,339,750

$
582,500No significant amounts of taxes were paid during the periods shown above.
 
 See Notes to Financial Statements
 
 
 ***Page - 7***
 
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
 
 
 
 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 media specific business portals: Buy & Sell Services; Public Relations Services; and Advertising Agency Services (Live Media Marketplace).  Additionally, the Company has finished the Xrbater.com website during the quarter ended September 30, 2004. 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.
 
 Basis of Presentation
 
 The unaudited balance sheet of Xraymedia, Inc. (the "Company") as of September 30, 2004 and the unaudited statements of operations and accumulated deficit for the three months and nine months ended September 30, 2004 and 2003 and the statements of cash flow for the nine months ended September 30, 2004 and 2003 are presented. These have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys Form 10-KSB for the year ended December 31, 2003. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.
 
 Summary of Significant Accounting Principles
 
 a. 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.
 
 ***Page - 8***
 b. Basic earnings per share
 
 Basic earnings <loss> per share have been calculated in conformity with Financial Accounting Standards Board Statement No. 128 " *Earnings per Share* ". The Company has a capital structure that has significant potential common shares. Basic earnings <loss> per share is calculated weighted on the average number of common shares outstanding each year. Diluted earnings per share are calculated as if the convertible preferred shares and warrants have been converted and/or exercised at date of issuance, unless the result is antidilutive.
 
 c.(1) 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.
 
 c.(2) Software license
 
 Software license purchases are capitalized and the cost amortized over the estimated useful lives of the related assets, generally three to five years under the straight-line method.
 
 c.(3) Patent, copyright and domain protection
 
 Costs incurred in obtaining protection for that portion of our technology developments, copyrighting special features and securing our internet domain are capitalized and amortized over the estimated useful life of the related assets.
 
 d. Issuance of preferred and 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, whichever is more readily determinable. The value is discounted for restricted stock for the time that restrictions are placed on the stock.
 
 e. Income taxes
 
 No income taxes are payable for the nine months ended September 30, 2004 and 2003. The Company has net operating losses of approximately $19,900,000, which will expire in the 20 th year from the date the losses were incurred, i.e. from 2014 to 2024.
 
 f. Functional currency
 
 The financial statements are stated in U.S. dollars, which is the functional currency of the Company.
 
 g. 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.
 
 
 ***Page - 9***
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
 
 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Summary of Significant Accounting Principles (Continued)
 
 h. Impact of Recent Accounting Standards
 
 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.
 
 ***Page - 10***
 
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE NINE MONTHS ENDEDSEPTEMBER 30, 2004
 
 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Summary of Significant Accounting Principles (Continued)
 
 i. 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 carry forward amounting to approximately $19,900,000. Because of the uncertainty of utilizing the net operating loss carry forward, the Company has provided a full valuation allowance against the deferred tax asset (See Note H).
 
 j. Media advertising
 
 The Company expenses all media advertising as incurred. For the nine month period ended September 30, 2004 and 2003, the Company charged to operations $71,591 (after a negotiated billing reduction) and $0 respectively.
 
 k. 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.
 
 l. 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.).
 
 m. Fair Value of Financial Instruments
 
 The Company estimates that the fair value of all financial instruments at September 30, 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.
 
 n. 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 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.
 
 
 ***Page - 11***
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER 30, 2004 AND 2003
 
 
 NOTE B - FIXED ASSETS
 
 Property and equipment at September 30, 2004 consisted of:
 
 2004Furniture and equipment

$
328,026Software License


25,000Less: Accumulated depreciation
and amortization


(274,360
)Fixed Assets, net

$
78,666
 
 Depreciation expense on furniture and equipment for the three and nine months ended September 30, 2004 is $16,581 and $48,937, respectively. Amortization expense on the software license was $2,082 and $6,246 for the three and nine months ended September 30, 2004, respectively.
 
 NOTE C - PATENTS, COPYRIGHT AND DOMAIN PROTECTION
 
 Intangible asset protection for the Companys new technology and interactive internet procedures. Patents, copyrights, and internet  domains (in progress) are included together due to overlapping areas:    $924,000
 
 Amortization (See Note A c.(3))          0
 
 TOTAL              $924,000
 =========
 
 The renumeration was in the form of Section 144 Restricted Stock.
 
 At September 30, 2004 all the intangible assets had finite lives. Amortization will commence after the patent and/or copyright has been granted. If the patent and/or copyright application is ultimately denied, the cost related to the application is expensed immediately.
 
 NOTE D - ACCOUNTS PAYABLE, ACCRUED EXPENSES AND ADVANCES
 
 Accounts payable and accrued expenses at September 30, 2004 consisted of the following categories:
 
 2004Accrued Consulting expense

$
98,629Accrued Office expense


167,820Accrued Professional fees expense


145,848Accrued Website/Internet expense


231,114Accrued Other expenses


1,310Accrued Wages payable


179,350Accrued Media advertising


46,813Accrued Rent payable


47,459Total Accrued Expenses

$
918,3434
 
  NOTE E - RELATED PARTY TRANSACTIONS
 
 A shareholder and spouse of the Company President advanced money on a partially revolving basis without interest to the Company since 2001, 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. Balances as of September 30, 2004 show net repayments of $47,881.
 
 The President charges XRAYMEDIA for his management fees in lieu of an employee salary. Management fees for the nine months ended September 30, 2004 and 2003 were $68,299 and $59,607 respectively and are included in consulting in the Statement of Operations and Accumulated Deficit. XRAYMEDIA owed the Presidents management company $83,219 as of September 30, 2004 for these services which are included in accounts payable on the Balance Sheet. In addition the President advanced XRAYMEDIA $86,190 during the quarter without specified terms of repayment and without interest.
 
 NOTE F - 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. In the two quarters ended September 30, 2004 no shares were issued under this plan, but in the quarter ended March 31, 2004, 3,044,773 restricted Section 144 shares of common stock were issued. Because of the one year restriction, these were priced at $0.07 per share, 70% of the closing price on the day of issuance. This total includes 1,075,000 shares issued in the employees names, but delivered in stages. The first during April, one third of the shares was upon completion of the new website. The remainder of the shares were issued upon presentation of the new Live Media Marketplace (LMM v5.0) and partnership venues. During the years ended December 31, 2003 and 2002, 1,000,000 shares and 5,350,000 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.
 
 
 ***Page - 12***
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
 
 
 NOTE G - EQUITY TRANSACTIONS
 
 During the last quarter of 2003, at a special general meeting, the shareholders of the Corporation voted and XRAYMEDIA subsequently received regulatory approvals, to amend the authorized capital.
 
 COMMON SHARES (voting) : 250,000,000 shares par value $0.001 per share
 
 CONVERTIBLE PREFERRED SHARES: 1,000,000 shares par value $0.001 per share (non voting) Convertible at the option of the holder to 100
 common shares for each preferred share.
 
 In November 2003 the Corporation changed its name to Xraymedia, Inc.. This change necessitated new stock certificates being issued to existing shareholders and the stock to trade under its new name and ticker symbol "XRYM".
 
 Stock Transaction - in the three quarters September 30, 2004 and to the date of this report, November 17, 2004, are as follows:
 
 Non voting Convertible Preferred Stock: 1,000,000 shares issued at their par value $0.001 per share.
 
 Charged to compensation expense    $9,100,000.
  Restricted under Section 144, and recorded at 70% of FMV on the date of issuance.
  If converted, stock remains covered by the SECs control position release rules.
 
 Voting Common Stock : Authorized 250,000,000 shares.
 
 A recap of stock transactions by quarters is as follows:
 
 
 
 # of Shares

PriceI. **Quarter ended March 31, 2004**a.Cash transactionsCash subscriptions received by
December 31, 2003


4,038,333

$
0.10 - 0.15Cash subscriptions received
January to March 2, 2004(audit date)


2,875,000


0.03 - 0.12Cash subscriptions received
March 3 to September 30, 2004


8,258,334


0.03 - 0.12Total issued for cash during quarter


15,171,667Performance plan


3,044,773


0.07Issued for services past and future


10,330,227


0.07 - 0.11Issued for patent/domain protection


13,200,000


0.07Total issued for non-cash transactions


26,575,000Total common shares issued


41,746,667Common shares issued toDecember 31, 2003


98,935,500Total common shares issued to March 31, 2004


140,682,167II.**Quarter Ended June 30, 2004**a.Shares issued non-cash transactionsIssued for past services


1,000,000


0.12Total common shares issued to June 30, 2004


141,682,167III.**Quarter Ended September 30, 2004**a.Shares issued for non-cash consideration for past considerations


1,350,000


0.08Total common shares issued 09/30/04


143,032,167   ***Page - 13***
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
 
   **# of Shares**
****
****
**Price****Future share issuance is restricted by****the following**:Unexpired warrants as of November 15, 2004


4,000,000Unconverted preferred shares


100,000,000Remaining cash subscriptions from September 30, 2004


433,332Total share issuance restriction


104,433,332Total shares issued as of September 30, 2004


143,032,167Total possible shares


288,317,164
 Subsequent to September 30, 2004 the Company issued 7,351,665 shares of common stock in connection with common stock subscriptions as of September 30, 2004, with a remainder of 433,332 shares to be issued.
 
  NOTE H - NET OPERATING LOSS CARRY FORWARD
 
 The net operating loss carry forward since inception is as follows:
 
 Year


Net Operating Loss


Year of
Expiration2004 - First Nine Months

$
11,211,911


20242003


2,012,733


20232002


1,679,917


20222001


1,571,200


20212000


1,671,139


20201999


205,851


20191994-1998


1,541,236

2014-2018$
19,893,987
 
 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 $220,749 for the quarter ended September 30, 2004.
 
 ***Page - 14***
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
 
 
 NOTE I - GOING CONCERN
 
 The Company has 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 Companys intention to grow through generating sales. Iin order to support existing operations, the Company plans to seek additional financing, form strategic partnerships to generate revenue, 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. No revenue was generated from the joint venture during the quarter ended September 30, 2004.
 
 Joint Venture


Company Investment in Joint Venture

Profit Sharing Percentage


Joint Venture revenue for First Three Quarters
2004A

$
0

50
%
$
0B

$
0

50
%
$
0C

$
0

20
%
$
0D

$
0

40%-50
%
$
0E

$
0

15%-20
%
$
1,588F

$
0

7.5%-50
%
$
0
 
 
 It was during the quarter ended March 31, 2004, the $1,588 in revenues were generated under the above agreements and XRAYMEDIA, INC. incurred $76,759 in media advertising expenses associated with the joint ventures during the same period. No revenues were earned, nor advertising media expense were incurred in the 2 nd & 3 rd quarter of 2004.
 
 Joint ventures D & E were discontinued by mutual consent during the quarter ended March 31, 2004.
 
 ***Page - 15***
 
 **XRAYMEDIA, INC.**
 (A COMPANY IN THE DEVELOPMENT STAGES)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
 
 NOTE K - COMMITTMENTS
 
 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 $6,690. Future minimum lease payments are as follows:
 
 2004                $ 6,830
 2005                 81,960
 2006 27,320
 Total $ 116,110
 
 Rental and other occupancy expenses for the nine months ended September 30, 2004 is $62,491.
 
 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 account 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. The specific amounts would be calculated during the 4 th quarter. In the interim the CRA has advised the Company not to remit any holdings for August and September, until the amount is determined. 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 period.
 
 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 - SUBSEQUENT EVENTS
 
 Subsequent to September 30, 2004 the Company has issued 40,851,665 shares at prices in effect on the relative date of issue or as agreed to in the private placement subscriptions, refer to Note G.
 
 
 ***Page - 16***
 **ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**
 Management Statement:
 
 On July 23, 2004, XRAYMEDIA announced the release of the XRBarter website, www.xrbarter.com. The XRBarter system allows clients to instantly reach the worldwide barter industry while using the live negotiating technology. In the past XRAYMEDIA attempted to work in the barter industry, with the previous Live Media Marketplace (LMM) v3.0. XRAYMEDIA created this solo barter system using real time technology.
 
 On August 29, 2004, XRAYMEDIA announced the signing of a revenue sharing agreement, which calls for this partner to bring in $250 million in gross media to the Live Media Marketplace for buying and selling with a minimum of $50 million per year for the next 5 years. XRAYMEDIA will be accommodating an interface for this partner to allow the facilitation of a flow of media and transactions onto our website. As of the quarter end no revenue had been produced from this agreement.
 
 During the quarter ended September 30, 2004, the Company began and completed the newest version of the real-time negotiating technology, Live Media Marketplace (LMM) v5.1. This latest version has added features like "Express Matches", to accelerate the order creation process, and "Match Priority Icons", allowing clients to rank their media matches according to their personal importance. Other features include allowing matches to be ranked as Priority #1 or #2, with all other considerations becoming Priority #3. It also allows "Order Change History" for users to observe and track their consecutive changes in their personal media orders. LMM v5.1 builds on LMM v5.0 which, allowed the user to buy or sell orders, choose from their media matches and initiate multiple negotiations simultaneously, in real-time.
 
  On October 14, 2004 XRAYMEDIA announced that in co-operation with R-Style Entertainment Inc., the company entered into a venture with Los Angeles based, entertainment management firm, Relativity Management, Inc. providing both Bridge and Full motion picture funding for development and physical production on a global basis. XRAYMEDIA is working with Relativity Management to bring $100 million of investment capital to both pre- and post-film production financing for feature films Relativity has slated to be funded through two of its newly formed finance funds. Additionally, XRAYMEDIA expanded its agreement with Relativity, announced on November 17, 2004, to include a range of advertising services and ventures capitalizing on our collective advertising experience and online, real time negotiating live technology.
  
 PLAN OF OPERATIONS;
 
 XRAYMEDIA's plan of operations for the remainder of the year 2004 will consist of continuing to build on its revenue stream through increased transactions in the LMM v5.1 and the new XRBarter System through working with its revenue partners and registered users. Additionally, the company will work with its corporate trade partners and wholesale liquidators to assist in liquidating the trade inventory from the "Corporate Trade Transaction Fees" received from the use of the LMM. Based on accounting principles generally accepted in the United States of America the inventory will not be reflected in the financial statements until the company has liquidated the goods. The Company is negotiating to sell these assets for cash to an unrelated party. During the remainder of this fiscal year, XRAYMEDIA intends to show how this plan will translate into strong cash flow for the Company.
 
 Going forward XRAYMEDIA will continue to focus on the three areas that we feel will add significantly to shareholder value: transactional business flow, cash flow, and liquid asset accumulation.
 
 ***Page - 17***
 A. RESULTS OF OPERATIONS
 
 THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2003
 
 *Sales*
 
 Revenues for the three months ended September 30, 2004 and 2003 were $45,010 and $0, respectively. The revenue was generated primarily from advertising services and technical support.
 
 *Losses*
 
 Net losses including penalties and interest remissions for the quarter ended September 30, 2004, decreased to $551,874 over the same period in 2003 of $836,061, a decrease of approximately 34% (approximately $284,000). The major factor involved was the non-cash compensation expense in 2003 of $400,000 compared to $0 in 2004.
 
 XRAYMEDIA expects to continue to incur losses at least through fiscal year 2004 and there can be no assurance that XRAYMEDIA will achieve or maintain profitability from revenues that may be generated or that growth can be sustained in the future.
 
 *Expenses*
 
 After including penalties and interest remission/expense (see Note L of the financial statements) of ($14,212) versus $4,756 for the respective quarter ended September 30, 2003. Selling, general and administrative expenses decreased to $521,673 from $784,157 for the same quarter in 2003. The decrease in selling, general and administrative expenses was as mentioned in the *losses* first paragraph.
 
 Depreciation and amortization expenses for the quarters ended September 30, 2004 and September30, 2003 were $18,663 and $16,562 respectively.
 
 Research and Development expenses increased during the three months ended September 30, 2004 to $56,548 from $35,342 for the three months ended Sept 30, 2003. The company has spent more heavily in 2004 to expedite the development and launch of its Media Service Portal of the Live Media Marketplace.
 
 NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO NINE MONTHS ENDED SEPT 30, 2003
 
 *Sales*
 
 Total revenues for the first two quarters of 2004 were $69,098 and $0, for the same period in 2003.
 
 *Losses*
 
 Net losses for the nine months ended September 30, 2004 substantially increased to $11,211,911 from $1,311,590 for the same period ended Sept 30, 2003. The increase in losses was primarily attributable to increased compensation expense.
 
 ***Page - 18***
 XRAYMEDIA expects to continue to incur losses at least through the fourth quarter of 2004 when a small profit for the twelve month period, net of the aforementioned compensation expense is expected. Optimism must be tempered by past performance so there can be no complete assurance that XRAYMEDIA will achieve or maintain profitability or that sufficient revenues will be generated or that growth can be sustained in the future.
 
 *Expenses*
 
 Selling, general and administrative expenses including penalties and interest for the nine month sended September 30, 2004 increased to $10,903,774 from $1,131,673 for the nine months ended September 30, 2003. The increase of approximately $9,770,000 in selling, general and administrative expenses was over 90% attributable to the compensation expense category referred to in the proceeding paragraph, with increases in Investor Relations of approximately $375,000 and Marketing/Media Advertising of approximately $190,000. Settlement of these amounts were a mixture of cash and shares.
 
 Depreciation and amortization expense for the nine months ended September 30, 2004 and 2003 were $55,183 and $49,686 respectively. Research and Development expenses increased during the nine months ended September 30, 2004 to $252,954 from $130,231 for the nine months ended September 30, 2003. The Companys expenditures for research and development should decrease as the Company gets closer to ending the development stage of business, as indicated by the schedule of the three month comparative.
 
 B. Liquidity and Capital Resources
 
 Cash flows from operations was $155,855 for the nine months ended September 30, 2004 and used by operations for the nine months ended Sept 30, 2003 was $(781,937). The decrease in negative cash flow for the nine months ended September 30, 2004 was primarily attributable to share issuance not requiring cash.
 
 Cash flows generated by investing activities were a negative $948,464 for the nine months ended September 30, 2004 and $0 for the nine months ended Sept 30, 2003. The substantial increase is negative cash flow is attributable to the payment, in restricted shares, for protection of patents, copyrights and domain.
 
 Cash flows generated from financing activities was $776,800 for the nine months ended September 30, 2004 and $906,956 for the nine months ended Sept 30, 2003. XRAYMEDIA's financing activities for the two periods primarily consisted of the sale of XRAYMEDIA's common stock pursuant to private placements.
 
 ***Page - 19***
 XRAYMEDIA has funded its cash needs over the period covered by this Form 10-QSB through the issuance of its common stock for cash, and for services. XRAYMEDIA realizes this is still not sufficient working capital over the next quarter. XRAYMEDIA anticipates it will meet its needs in part through outside advances, the sale of additional shares of its common stock pursuant to a registration statement or an appropriate exemption from registration and through revenues generated by the Companys Live Media Marketplace.
 
 *C. Capital Expenditures*
 
 XRAYMEDIA made no significant net capital expenditures on property or equipment  during the three quarters ended September 30, 2004 and 2003. The major planned capital expenditure is further website development. XRAYMEDIA has budgeted $100,000.00 to purchase the additional equipment or programs needed for this development and XRAYMEDIA intends to contract sometime in the near future to complete this work. XRAYMEDIA also plans to raise operating funds by a mixture of debt and stock to provide monies needed for their new projects.
 
 XRAYMEDIA's budgeted cash requirements are approximately $1,500,000 annually at present and are expected to rise to $2,000,000. The majority of our cash requirements will be used for personnel costs, professional fees, advertising, and further website development. These should be offset to some extent from revenue cash flow. The company will continue its earlier practice of settling some debt for shares.
 
 *D. Income Tax Expense (Benefit)*
 
 XRAYMEDIA has net operating loss carry forwards of approximately $19,900,000. which will expire from 2014 to 2024. All available losses may not be utilized unless matching profits are earned.
 
 
 *E. Impact of Inflation*
 
 XRAYMEDIA believes that inflation has had a negligible effect on operations over the past three years. XRAYMEDIA believes that it can offset inflationary increases in the cost of materials and labor by increasing sales and improving operating efficiencies.
 
 *F. Critical accounting policies*
 
 Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our Board of Directors, we have identified accounting policies that we believe are key to an understanding of our financial statements. These are important accounting policies that require managements most difficult, subjective judgments.
 
 ***Page - 20***
 Revenue Recognition
 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 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 readily determinable fair values within reasonable limits as the Company has no history of receiving cash in similar transactions. Therefore the earnings process has not been completed. The transactions involve barter as described further in Note K of the Financial Statements.
 
 Research and Development
 The second critical accounting policy relates to research and development expenses. We expense all research and development expenses as incurred. Costs incurred to establish the technological feasibility of our 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.
 
 Valuation of Intangible Assets
 The third critical accounting policy relates to intangible assets.  Our intangible assets consist of patents and copyrights.  We value our intangible assets at cost. In accordance with SFAS 142, "Goodwill and Other Intangible Assets", only intangible assets with finite lives are amortized.  At September 30, 2004 all our intangible assets had finite lives. We initiate amortization of intangible assets with finite lives after the patent or copyright is granted. If a patent or copyright application is ultimately denied, we immediately record an expense for the cost related to that application.
 
 *G.. Going Concern*
 
 XRAYMEDIA has suffered recurring losses from operations that raises possible doubts about its ability to continue as a going concern. Management plans in regards to these matters is to grow through business combinations rather than seek immediate, short-term earnings. However, in order to support existing operations and to fund proposed acquisitions, additional bank, private and/or equity financing must be obtained. Additionally, XRAYMEDIA plans to increase its sales through its website, www.xraymedia.com.
 
 Additionally, due to the website launch delays and unexpected expenditures on internal development of replacement auction software it was necessary for management to arrange advances to XRAYMEDIA.
 
 
 ***Page - 21***
 
 **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.
 
 
 [THIS SPACE LEFT BLANK INTENTIONALLY]
 
 
 
 ***Page - 22***
 
 **SIGNATURES**
 
 IN ACCORDANCE WITH SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT CAUSED THIS FORM 10-QSB TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, THIS 17TH DAY OF AUGUST, 2004.
 
 **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: NOVEMBER 17, 2004
 
 /S/ RAYMOND DABNEY PRESIDENT AND DIRECTOR
 RAYMOND DABNEY
 
 
 ***Page - 23***
   
 
 **EXHIBIT 31**
 
 
 
 
 
 
 
 ***Page - 24***
 
 **CERTIFICATIONS PURSUANT TO**
 **SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**
 
 
 I, Raymond Dabney, Chief Executive Officer of XRAYMEDIA, Inc. certify that:
 
  1.
I have reviewed this quarterly report on Form 10-QSB of  XRAYMEDIA, Inc;   2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;   3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants of, and for, the periods presented in this quarterly report;   4.
The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have;  a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
  b)    evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
 
 c)    presented in this quarterly report our conclusions about the effectives of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
 
 5.The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions):
 
 a)    all significant deficiencies in the design or operation in internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
 
 b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
 
 6. The registrants other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
 
 
 Date: November 17, 2004
 Signature: /s/Raymond C. Dabney
 
 Raymond C. Dabney
 Chief Executive Officer
 
 
 
 
 
 ***Page - 25***
 
 
 **CERTIFICATIONS PURSUANT TO**
 **SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**
 
 
 I, Raymond Dabney,  Chief Financial Officer  of XRAYMEDIA, Inc. certify that:
 
  1.
I have reviewed this quarterly report on Form 10-QSB of  XRAYMEDIA, Inc;   2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;   3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants of, and for, the periods presented in this quarterly report;   4.
The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have;  a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
  b)    evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
 
 c)    presented in this quarterly report our conclusions about the effectives of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
 
 5.The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions):
 
 a)    all significant deficiencies in the design or operation in internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
 
 b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
 
 6. The registrants other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
 
 
 Date: November 17, 2004
 Signature: /s/Raymond C. Dabney
 Raymond C. Dabney
 Chief Financial Officer
 
 
 
 
 ***Page - 26***
  
 
 **EXHIBIT 32**
  
 
 
 
 ***Page - 27***
 
 **CERTIFICATION PURSUANT TO 18 U.S.C.**
 **SECTION 1350, AS ADOPTED PURSUANT TO**
 **SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**
 
 In connection with the Quarterly Report of XrayMedia, Inc. on Form 10-QSB for the period ending September 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Raymond Dabney, President and Chief Executive Officer of XrayMedia, Inc and a member of the Board of Directors, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
 
 (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
 (2) The information contained in the Report fairly represents, the financial condition and result of operations of the Company.
 
 
 
 Date: November 17, 2004
 
 Signature: /s/Raymond C. Dabney
 Raymond C. Dabney
 Chief Executive Officer
 
 
 
 
 ***Page - 28***
 **CERTIFICATION PURSUANT TO 18 U.S.C.**
 **SECTION 1350, AS ADOPTED PURSUANT TO**
 **SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**
 
 In connection with the Quarterly Report of XrayMedia, Inc. on Form 10-QSB for the period ending September 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Raymond Dabney, President and Chief Financial Officer of XrayMedia, Inc and a member of the Board of Directors, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
 
 (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
 (2) The information contained in the Report fairly represents, the financial condition and result of operations of the Company.
 
 
 
 Date: Novermber 17, 2004
 Signature: /s/Raymond C. Dabney
 Raymond C. Dabney
 Chief Financial Officer
 
 
 ***Page - 29***
 **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 - 30***
 
 
 
 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 - 31***
 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 - 32***