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 June 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 [   ]
 
 
 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 two quarters ended June 30, 2004, were $24,088.
 
 On June 30, 2004, the number of shares outstanding of the registrant's Common Stock, $0.001 par value (the only class of voting stock), was 141,682,167. On June 30, 2004 and August 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.
   Page - 1 
 
 
 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.  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 JUNE 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 attched hereto as Pages F  1 through F  9 and are incorporated herein by this reference.


(THIS SPACE LEFT BLANK INTENTIONALLY)
 
 
 Page - 1
 XRAYMEDIA, INC.
 (FORMERLY XRAYMEDIA.COM, INC.)
 (A COMPANY IN THE DEVELOPMENT STAGE)
 BALANCE SHEETS (UNAUDITED)
 JUNE 30, 2004
 
 
 
 JUNE 302004**ASSETS**CURRENT ASSETSCash and cash equivalents
$
7,636Accounts receivable
19,000Prepaid expenses
185,644TOTAL CURRENT ASSETS

212,280FIXED ASSETSFurniture and equipment, Net (Note B)

88,691Software License, Net (Note B)

4,170TOTAL FIXED ASSETS

92,861OTHER ASSETSSecurity deposit.

197Patents, copyright, domain protection - in progress
924,000TOTAL ASSETS
$
1,229,338CURRENT LIABILITIESAccounts payable and Accrued expenses (Note C)
$
793,059Advances - other

26,565Advance from related party ( Note D)

604,155TOTAL CURRENT LIABILITIES

1,423,779TOTAL LIABILITIES

1,423,779STOCKHOLDERS' EQUITY <DEFICIT>(Note F)Convertible Preferred Stock, par value $.001; 1,000,000

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

-Additional paid in capital

-Common Stock, par value $.001; 250,000,000 shares authorized; issued and outstanding 141,682,167
June 30, 2004141,683Additional paid in capital

19,634,659Shares subscribed and paid in full

147,300Deficit at inception date

(746,875
)Accumulated deficit during the development stage

(19,342,113
)Common stock note receivable

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

(194,441
)TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY <DEFICIT>
$
1,229,338
 
  
 
 Page - 23 
 
 
 XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGE)
 STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT (UNAUDITED)
 FOR THE SIX MONTHS ENDED JUNE 30, 2004, 2003, AND
 THE PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE) TO JUNE 30, 2004
 
 
 
 1-Mar-94Three Months Ended June 30,


SIX MONTHS Ended June 30,


(inception of development stage) to6/30/20042004


2003


2004


2003$
$REVENUE


22,500


-


24,088


-


69,807COSTS AND EXPENSESPersonnel Costs


21,000


21,000


42,000


42,000


730,871Compensation expense


-


-


9,432,425


-


12,002,425Occupancy costs


20,998


21,006


43,378


38,477


413,855Professional fees


91,760


29,358


156,717


47,358


1,444,719Media advertising


(11,245
)

-


65,514


-


343,832Marketing


25,632


13,162


49,629


25,022


287,128Travel & promotion


20,868


26,263


60,307


34,762


392,482Consulting


137,222


17,629


159,949


37,629


590,425Bank charges


874


539


2,145


824


13,749Office supplies


17,574


20,972


43,017


36,507


338,375Communication


6,039


4,463


11,212


8,458


163,589Insurance


99


322


99


322


77,885Miscellaneous


173


936


1,470


2,609


25,618Transfer fees


1,000


1,372


3,308


1,422


25,817Depreciation and amortization


18,260


16,563


36,520


33,124


274,908Bad debt expense


-


-





-


6,343Research and Development


76,433


47,713


196,406


94,889


945,565Investor relations


169,342


40,628


373,849


45,141


625,238TOTAL OPERATING EXPENSES


596,029


261,926


10,677,945


448,544


18,702,824NET OPERATING COSTS


(573,529
)

(261,926
)

(10,653,857
)

(448,544
)

(18,633,017
)OTHER INCOME<LOSS>Dissolution of Corp Reports


-


-





-


(503,507
)Other (Note H)


-


-


-


-


(138,774
)-





-


-


-


(642,281
)OTHER EXPENSESInterest and penalties


475


-


1,950


6,312


24,759Other interest


857


10,608


4,230


20,673


42,0561,332


10,608


6,180


26,985


66,815NET (LOSS)


(574,861
)

(272,534
)

(10,660,037
)

(475,529
)Accumulated deficit beginning


(18,767,252
)

(6,872,338
)

(8,682,076
)

(6,669,343
)Accumulated deficit ending


(19,342,113
)

(7,144,872
)

(19,342,113
)

(7,144,872
)

(19,342,113
)BASIC AND DILUTEDLOSS PER SHARE (NOTE A)


($0.004
)

($0.003
)

($0.093
)

($0.005
)WEIGHTED AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING


140,932,167


90,863,000


114,189,333


86,996,889
 
  Page - 2
 
 XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGE)
 STATEMENTS OF CASH FLOWS (UNAUDITED)
 FOR THE SIX MONTHS ENDED JUNE 30, 2004, 2003, AND
 THE PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE) TO JUNE 30, 2004
 
 
 
 March 1, 1994(inception ofdevelopment stage) toSIX MONTHS Ended June 30,

June 30, 20042004

2003


(as restated)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
$
(10,660,037
)
(475,529
)
$
(19,342,113
)Adjustments to reconcile net lossto net cash used by operating activities:Depreciation &Amortization

36,520

33,124


274,908Shares issued in exchange for servicescharged to Professional fees

232,825

-


487,325Shares issued for stock performance plan

332,425

-


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

9,100,000

-


10,150,000Shares issued for services

1,642,500

-


1,947,500Abandonment of furniture & equipment

-

-


30,809Bad debt expense

-

-


6,343Write-off of goodwill

-

-


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

(185,644
)
-


(185,644
)Accounts receivable

(19,000
)
-


(25,343
)Security deposit

1,069

7,143


(169
)Increase <decrease> in current liabilities:Accrued expenses

(189,597
)
168,044


380,862Accrued wages payable

(47,881
)
42,000


205,969Advances from related parties

-

24,458


865,452NET CASH USED FOR OPERATING ACTIVITIES

243,180

(207,903
)

(2,862,595
)CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition of furniture and equipment

(19,996
)
-


(373,578
)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

(943,996
)
-


(1,787,409
)CASH FLOWS FROM FINANCING ACTIVITIES:Issuance <repayment> of notes payable

-

-


1,704,807Shares issued for note

-

-


(95
)Shares subscribed

(342,300
)
-


147,300Sale of common stock

1,030,100

351,555


2,804,655Sale of preferred stock
1,000 - 1,000NET CASH PROVIDED BY FINANCINGACTIVITIES

688,800

351,555


4,657,667NET INCREASE <DECREASE> IN CASH

(12,016
)
150,795


7,636CASH, beginning of period

19,652

466CASH, end of period
$
7,636

151,261

$
7,636SUPPLEMENTAL DISCLOSURE:Penalties and interest
$
1,950

6,312

$
24,759Other Interest expense
$
4,230

20,673

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

-Shares issued for services & charged to professional fees

232,825Shares issued for stock performance plan

332,425

-Shares issued under section 144 - control position

9,100,000

-Shares issued in exchange for extended business model

-

-Shares issued in exchange for services

1,642,500

-Shares issued for intangible assets
924,000$
12,231,7505

0No significant amounts of taxes were paid during the periods shown above.
 
 Page - 3
 
 
 XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE SIX MONTHS ENDED JUNE 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 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.
 
 
 Basis of Presentation
 
 The unaudited balance sheet of Xraymedia, Inc. (the Company) as of JUNE 30, 2004 and the unaudited statements of operations and accumulated deficit for the THREE MONTHS and SIX MONTHS ended JUNE 30, 2004 and 2003 and the statements of cash flow for the SIX MONTHS ended June 30, 2004 and 2003. 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.
 
 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.
  Page - 4
 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. 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 SIX MONTHS ended June 30, 2004 and 2003. The Company has net operating losses of approximately $19,350,000, 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.
 
 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.
 
 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 - 5
 
 
 XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE SIX MONTHS ENDED JUNE 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 required information should be provided separately for pension plans and for other postretirement benefit plans.
  Page - 6
 
 XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE SIX MONTHS ENDEDJUNE 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 $19,350,000. 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 G).
 
 j. Media advertising
 
 The Company expenses all media advertising as incurred. For the six month period ended June 30, 2004 and 2003, the Company charged to operations $65,514 (after a negotiated billing reduction) and $0 respectively. The advertising was used in the joint ventures as described further in Note K but included Company information in the advertisement.
 
 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 June 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 - 7
 
 
 XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 JUNE 30, 2004 AND 2003
 
 
 NOTE B  PREPAID EXPENSE
 
 
 Prepaid expenses at June 30, 2004 consisted of:
  (a)Promotional campaigns for third quartercompletion at which time the amounts willbe expensed to the appropriate accounts.
$ 31,644.(b)Investor relations efforts commenced inthe first quarter, continued in the secondquarter and will continue over to the thirdquarter as regards approachingvarious venture capitol groups, preparingamended business plans which will meet therequirements of venture capitalists differingneeds The renumeration remains in theform of Section 144 Restricted Stock
154,000.$185,644.
========
 
 
 
 NOTE C - FURNITURE AND EQUIPMENT
 
 
 Property and equipment at June 30, 2004 consisted of:
 
 2004Furniture and equipment

$
323,558Software License


25,000Less: Accumulated depreciation
and amortization


(255,697
)Furniture and equipment, net

$
92,861
 
 Depreciation expense on furniture and equipment for the quarters ended June 30, 2004 and 2003 was $16,178 for each quarter ended, respectively. Amortization expense on the software license was $2,082 for each of the quarters ended June 30, 2004 and 2003, respectively.
 
 NOTE D  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.
 
 
 NOTE E - ACCOUNTS PAYABLE, ACCRUED EXPENSES AND ADVANCES
 
 
 Accounts payable and accrued expenses at June 30, 2004 consisted of the following categories:
 
 2004Accrued Consulting expense

$
74,939Accrued Office expense


159,758Accrued Professional fees expense


120,522Accrued Website/Internet expense


210,972Accrued Other expenses


22,868Accrued Wages payable


158,500Accrued Media advertising


45,500Total Accrued Expenses

$
793,059
 
 Advances were made by another company for rental expenses incurred during the SIX MONTHS ended December 31, 2002 in the amount of $26,565. The advances were extended on open terms and remain outstanding on June 30, 2004.
 
 NOTE F  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 June 30, 2004 show net repayments of $47,881.
 
 During the years ended December 31, 2002 and 2001, 1,000,000 and 5,900,000 shares and as outlined below were issued to the same related party in consideration of forgiveness of advances, respectively. The shares issued were valued at $0.03 per share for a total amount of $30,000 and $177,000 of debt forgiven for the years ended December 31, 2002 and 2001, respectively. No shares were issued in consideration of forgiveness of advances in 2003, nor in the first two quarters of 2004.
 
 Year ended December 31,

# of common shares issued

Value of debt forgiven

FMV of stock issued2002

1,000,000

$30,000

$70,0002001

5,900,000

$177,000

$325,500 
 The President charges XRAYMEDIA for his management fees in lieu of an employee salary. Management fees for the six months ended June 30, 2004 and 2003 were $44,949 and $37,629 respectively and are included in consulting in the Statement of Operations and Accumulated Deficit. XRAYMEDIA owed the Presidents management company $59,860 as of June 30, 2004 for these services which are included in accounts payable on the Balance Sheet.
 
 NOTE G  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 quarter ended June 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 - 8
 XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE SIX MONTHS ENDED JUNE 30, 2004
 
 
 
 NOTE H  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.
 
 The Corporation changed its name by dropping the .com. 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. When the switchover was completed the existing stock ceased to trade, i.e.; the old shares had to be exchanged for new certificates through the transfer agent.
 
 The Preferred shares are not being called for trading, but as they are convertible to a specific number of Common shares, the value of the Preferred will easily be calculated as a multiplier of the Common.
 
 Stock Transaction - in the two quarters and to the date of this report, August 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.
 
 Another special general meeting is to be held later this year for purposes of further amending the authorized capital.
 
 A recap of stock transactions by quarters is as follows:
 
 
 Page - 9
  # of Shares
Pricea.Cash transactions
Cash subscriptions received by
December 31, 2003
Cash subscriptions received
January to March 2, 2004
4,038,333
$0.10  0.15(audit date)Cash subscriptions received
2,875,000
0.03  0.12March 3 to June 30, 2004
8,258,334
0.03  0.12Total issued for cash during quarter
15,171,667=========performance 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
26,575,000=========Total common shares issued
41,746,667Common shares issued toDecember 31, 2003
98,935,500Total common shares issued toMarch 31, 2004
140,682,167II. Quarter Ended June 30, 2004a.Shares issued non-cash transactionsIssued for past services
1,000,000
0.12Total issued for non-cash transactions
1,000,000Total common shares issued toJune 30, 2004
141,682,167==========c.Future shares issuance is restricted byCash subscriptions receivedprior to June 30, 2004
5,826,664
0.03  0.10Cash subscriptions receivedsubsequent to June 30, 2004
1,350,000
0.03Unconverted preferred shares
100,000,000Unexpired warrants
5,000,000Total potential unissued shares
112,176,664Total issued shares
141,682,167253,858,831Total authorized common shares
(250,000,000)Short fall in excess of potentialauthorized common shares
3,858,831**=========
 
 
 
 
 ** A yet to-be-approved registration statement and/or holding of a shareholders meeting are expected to increase the authorized capital well in excess of the above shortfall. In any event, and to regularize the capital structure, Raymond Dabney, the registered owner of the Companys convertible Preferred shares is prepared temporarily to abrogate sufficient of the conversion privileges on these shares to reduce the potential excess.
 
 NOTE I  NET OPERATING LOSS CARRY FORWARD
 
 
 The net operating loss carry forward since inception is as follows:
 
 Year
Net Operating Loss
Valuation
Allowance
Year of
Expiration2004  First Six Months
$ 10,660,037
$4,264,015
20242003
2,012,733
805,093
20232002
1,679,917
671,967
20222001
1,571,200
628,480
20212000
1,671,139
668,456
20201999
205,851
82,340
20191994-1998
1,541,236
616,494
2014-2018$19,342,113
$7,736,845
 
 
  
 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. A valuation allowance for the full amount of the net deferred tax asset, using an anticipated U.S. income tax rate of 40%, was recorded each year because of uncertainties as to the amount of taxable income that would be generated in future years. The change in the valuation allowance was $229,945 for the quarter ended June 30, 2004.
  Page - 10
 XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGE)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE SIX MONTHS ENDED JUNE 30, 2004
 
 
 
 NOTE J  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. However, in 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 K  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. No additional venture agreements were signed in either quarter of 2004.
 
 Joint Venture

Company Investment in Joint Venture

Profit Sharing Percentage

Joint Venture revenue for First Two Quarters
2004A

$0

50%

$0B

$0

50%

$0C

$0

20%

$0D*

$0

40%-50%

$0E*

$0

15%-20%

$1,588 
 
 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 quarter of 2004. The Company under the terms of the agreements will not be reimbursed. The Company received a discount for the media advertising above. The total media advertising for the six months ended June 30, 2004 is $65,514.
 
 Two of the joint ventures (marked with an *) were discontinued by mutual consent during the quarter ended June 30, 2004.
 
 
 
 
 Page - 11
   XRAYMEDIA, INC.
 (A COMPANY IN THE DEVELOPMENT STAGES)
 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE SIX MONTHS ENDED JUNE 30, 2004
 
 
 NOTE L  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        $40,140 (Cdn $27,144)
 2005        80,280 (Cdn $54,288)
 2006        26,760  (Cdn $18,096)
 Total        $147,180  (Cdn $99,528)
 
 Rental and other occupancy expenses for the six month period ended June 30, 2004 amounted to $43,378..
 
 
 
 NOTE M  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 the 2002 year-end in the amount of $47,540, including violation penalties and interest in the amount of $22,809.
 
 In 2003, the Canadian Revenue Agency (now referred to as the CRA) assessed a tax lien against the Company for these unpaid payroll taxes. The total amount owing CRA at June 30, 2004, with regard to the lien is approximately $6,000. Management has arranged a payment plan with the CRA to pay the remainder off during the third quarter of 2004. The Company has agreed to a payment plan of approximately $3,800 per month.
 
 
 
 Page - 12
 
 NOTE N  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 O  SUBSEQUENT EVENTS
 
 Subsequent to June 30, 2004 the Company has received subscriptions for 1,350,000 shares of common stock at price of $0.03 per share (see also Note F).
 
 
 Page - 13
 
 
 ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 Management Statement:
  
 During the quarter ended June 30, 2004 XRAYMEDIA completed its programming infrastructure and successfully released the newest version of the Live Media Marketplace (LMM v5.0) on May 15, 2004. The new LMM v5.0 reveals a completely restructured media trading floor, as well as additional improved features for seamless order entry and clear-cut live event management. The embedded live streaming technology provides its users with finger tip controls to promptly view and negotiate on any media inventory listed in the LMM v5.0 giving much more control to its users. The LMM v5.0 empowers the user with the ability to place media buy or sell orders, choose from their media matches, and initiate multiple negotiations simultaneously, in real-time.
 
 XRAYMEDIA is actively working with its corporate trade partner and wholesale liquidators to assist in liquidating the trade inventory from the "Corporate Trade Transactions Fees" received from the use of the Live Media Marketplace. Based on Generally Accepted Accounting Principles in the United States the inventory will not be reflected in the financial statements until the company has liquidated the goods. The Company is negotiating to sell this asset for cash to an unrelated party.
 
 On March 8, 2004, XRAYMEDIA announced the upcoming launch of its new corporate website would released March 31, 2004, closely followed by the release of the newest version of the Live Media Marketplace which would launch on May 15, 2004. The corporate website and the Live Media Marketplace would both be launched with a fresh new look and feel. Both websites would offer a number of progressive new features, additional user-friendly tools, and powerful upgrades to the existing live media negotiating technology designed to attract the attention of corporate America and the media industry worldwide.
 
 On July 23, 2004 XRAYMEDIA announced that the Company has successfully released the latest version of its live Internet negotiating technology, specifically designed for live corporate barter negotiations, at www.xrbarter.com. The new XRBarter System picks up where the old LMM v3.0 left off, bringing together live Internet negotiations with the rapidly evolving corporate barter industry.
 
 XRAYMEDIA is planning a broad marketing campaign to cover several targeted areas focusing on media buyers, corporate buyers, advertising agencies, media whole-sellers, television, radio, print, and Internet companies. The marketing program will emphasize several key advantages of the LMM v5.0 and the XRBarter System.
 
 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 v5.0 and the new XRBarter System through working with its revenue partners and registered users, as well as liquidating inventory for additional revenue and assets on the balance sheet. 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 - 14
 A. Results of Operations
 
 The numbers used in this analysis are those contained in the comparative financial statements that follow. These reflect the changes of previous periods to reflect the current method of presentation.
 
 THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO SIX MONTHS ENDED JUNE 30, 2003
 
 Sales
 
 Revenues for the first quarter of 2004 were $1,588 and $0 for the same quarter in 2003.
 Revenues for the second quarter of 2004 were $22,500, for a six month total of $24,088.
 Revenues for the second quarter of 2003 were again, $0.
 
 Losses
 
 Net losses including penalties and interest for the quarter ended June 30, 2004, increased to $574,861 over the same period in 2003 of only $272,534, an increase of approximately 111% ($302,000).
 
 The increase in losses was attributable to a combination of five items, they are - increase in (1) consulting expense (2) professional fees (3) investor relations (4) travel and (5) research and development.
 
 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.
 
 
 Page - 15
 
 
 Expenses
 
 Selling and general expenses including penalties and interest of $1,332 (2004) and $10,608 (2003) for the quarter ended June 30, 2004, increased to $498,428 from $224,821 for the quarter ended June 30, 2003. The increase in selling, general and administrative expenses was as mentioned in the previous paragraph. Depreciation and amortization expenses for the quarters ended June 30, 2004 and June 30, 2003 were $18,260 and $16,563 respectively.
 
 Research and Development expenses increased during the three months ended June 30, 2004 to $76,433 from $47,713 for the three months ended June 30, 2003. The company has spent more heavily in 2004 to expedite the development and spring launch of its Media Service Portal of the Live Media Marketplace.
 
 SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO SIX MONTHS ENDED JUNE 30, 2003
 
 
 Sales
 
 Total in revenues for the first two quarters of 2004 were $24,088 and $0, for the same period in 2003.
 
 Losses
 
 Net losses for the six months ended June 30, 2004 substantially increased to $10,660,037 from $475,529 for the same period ended June 30, 2003. The increase in losses was primarily attributable to increased compensation expense, a new costing category introduced retroactively in 2001, to reflect a non-cash reporting change to share pricing at market value.
 
 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 six month ended June 30, 2004 increased to $10,463,631 from $380,640 for the six months ended June 30, 2003. The increase in selling, general and administrative expenses was directly attributable to the compensation expense category referred to in the proceeding paragraph. Depreciation and amortization expense for the six months ended June 30, 2004 and 2003 were $36,520 and $33,124 respectively. Research and Development expenses increased during the six months ended June 30, 2004 to $196,406 from $94,889 for the six months ended June 30, 2003. The Companys expenditures for research and development should decrease as the Company gets closer to ending the development stage of business.
 
 B. Liquidity and Capital Resources
 
 Cash flows from operations was $243,184 for the six months ended June 30, 2004 and used by operations for the six months ended June 30, 2003 was $(207,903). The decrease in negative cash flow for the six months ended June 30, 2004 was primarily attributable to share issuance not requiring cash.
 
 Cash flows generated by investing activities were a negative $943,996 for the six months ended June 30, 2004 and $0 for the six months ended June 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 $688,800 for the six months ended June 30, 2004 and $351,555 for the six months ended June 30, 2003. XRAYMEDIA's financing activities for the period primarily consisted of the sale of XRAYMEDIA's common stock pursuant to private placements, a practice that has continued into the third quarter.
 
 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 two quarters. 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 two quarters ended June 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 estimated cash requirements are approximately $1,500,000 annually. 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.
 
 
 Page - 16
 
 
 
 D. Income Tax Expense (Benefit)
 
 XRAYMEDIA has net operating loss carry forwards of approximately $19,350,000. 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.
 
 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 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. 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 June 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 then to 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 - 17
 
 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 - 18
 
 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
 
 /S/ RAYMOND DABNEY       PRESIDENT AND DIRECTOR    AUGUST 17, 2004.
 RAYMOND DABNEY
 
 Page - 19
 
 
 EXHIBIT 31
 
 
 
 
 
 Page - 20
 
 CERTIFICATIONS PURSUANT TO
 SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
 
 I, Raymond Dabney, Chief Executive Officer of XRAYMEDIA, Inc. certify that:
 
 I have reviewed this quarterly report on Form 10-QSB of  XRAYMEDIA, Inc;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;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;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: August 17, 2004
 Signature: /s/Raymond C. Dabney
 
 Raymond C. Dabney
 Chief Executive Officer
 
 
 
 
 Page - 21
 
 
 CERTIFICATIONS PURSUANT TO
 SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
 
 I, Raymond Dabney,  Chief Financial Officer  of XRAYMEDIA, Inc. certify that:
 
 I have reviewed this quarterly report on Form 10-QSB of  XRAYMEDIA, Inc;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;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;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: August 17, 2004
 Signature: /s/Raymond C. Dabney
 Raymond C. Dabney
 Chief Financial Officer
 
 
 
 Page - 22
 
 
 EXHIBIT 32
 
 
  Page - 23
  
 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 June 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: August 17, 2004
 
 Signature: /s/Raymond C. Dabney
 Raymond C. Dabney
 Chief Executive Officer
 
 
 
 Page - 24
 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 June 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: May 17, 2004
 Signature: /s/Raymond C. Dabney
 Raymond C. Dabney
 Chief Financial Officer
 
 Page - 25
 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 - 26
 
 
 
 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 - 27
 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 - 28