E Med Future Inc - Annual Report (Small Business Issuers) (10KSB)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended December 31, 2007

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

Commission file number: 33-55254-36

E Med Future, Inc.

(Name of small business issuer in its charter)


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

34 South Clay Street, Millersburg, Ohio 44654

(Address of principal executive offices)


330-674-1363		www.NeedleZap.com
(Issuer’s telephone number)		(Issuer’s website)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. ¨

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 ¨ No x

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-KSB ¨

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

State issuer’s revenues for its most recent fiscal year. $123,429

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.) $274,031 as of April 3, 2008.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 42,513,415 shares of common stock, $0.001 par value per share, as of March 31, 2008

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

TABLE OF CONTENTS


PART I					1
	Item 1.			Description of Business	1
		Our History			1
		Our Products			1
		Receivership			2
		Recent Developments			2
		Distribution of Our Products			3
		Research and Development			3
		Patents and Trademarks			3
		Royalty Agreement			4
		Employees			4
		Principal Suppliers			4
		Competition			4
		Governmental Regulations			5
		Forward Looking Statements			6
		How to Learn More About E Med			7
	Item 2.			Description of Property	7
	Item 3.			Legal Proceedings	7
	Item 4.			Submission of Matters to a Vote of Security Holders	8
PART II					8
	Item 5.			Market For Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities	8
	Item 6.			Management’s Discussion and Analysis or Plan of Operation	8
		Looking Ahead			9
		Results of Operations			9
			Net Sales		9
			Costs and Expenses		9
			Net Loss		9
			Selected Financial Data		9
		Financial Condition and Liquidity			10
		Off-Balance Sheet Arrangements			10
		Critical Accounting Policies			11
	Item 7.			Financial Statements	11
	Item 8.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	11
	Item 8A(T).			Controls and Procedures	11
	Item 8B.			Other Information	12
PART III					12
	Item 9.			Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act	12
		Committees of the Board			12
		Code of Ethics			12
		Compliance with § 16(a) of the Exchange Act			13


	Item 10.		Executive Compensation	13
		Director Compensation		13
		Equity Compensation Plans		13
	Item 11.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	13
	Item 12.		Certain Relationships and Related Transactions	14
		Royalty Agreements with Officers		14
		Loans from Employees and Directors		14
	Item 13.		Exhibits	15
	Item 14.		Principal Accountant Fees and Services	16
SIGNATURES				17

PART I

Item 1.

Description of Business.

Headquartered in Millersburg, Ohio, E Med Future, Inc. manufactures and markets products designed to reduce accidental hypodermic needlestick injuries. Our primary product, NeedleZap ^® , completely disintegrates the sharp portion of the needle. According to the American Nursing Association, there are an estimated one million accidental needlesticks reported in the United States in the healthcare industry alone. We believe the applications for the product are far reaching, and include healthcare professionals, law enforcement and correctional personnel, veterinarians, military, clinical researchers, hospitality, and sanitation workers. NeedleZap ^® is designed to work within the parameters of OSHA needlestick mandates which require employers to take advantage of new technologies to prevent needlesticks in the workplace.

Our History

The Company was formed under the laws of the State of Nevada on March 14, 1990, but until 2003 we were a shell company with no significant operations other than seeking to identify an existing business to acquire. Trading in our stock was dependant on our acquisition of an operating business. On April 4, 2003, we participated in a merger in which we acquired E Med Future, Inc., our operating subsidiary. In connection with the transaction, we issued 19,850,000 unregistered shares of our common stock (95% of our then outstanding shares) to the former stockholders of E Med Future.

Pursuant to the terms of the merger agreement, we changed our corporate name from “Micro-Economics, Inc.” to “E Med Future, Inc.” In addition, our original directors resigned and were replaced by Robert J. Ochsendorf, D. Dane Donohue and Juan J. Perez. Our shares began trading on the OTC Bulletin Board under the symbol “EMDF.OB” on April 17, 2003. For additional information about the merger, please see the Report on Form 8-K dated April 4, 2003 that we filed with the SEC on April 11, 2003.

Our Products

Our primary product is NeedleZap ^® , a revolutionary safety device intended to help reduce accidental needlestick injuries by disintegrating the sharp portion of a hypodermic needle. When a hypodermic needle is inserted into the unit, the patented electrode system disintegrates the needle in approximately two seconds at 2200° F.

In July 2003, we announced the beginning of clinical testing and market evaluation of the first extensions to the NeedleZap ^® product line which include a dental parking station and butterfly needle burner. We are presently in the process of obtaining patent protection for these new products. Because we lack sufficient funds to expedite the development of these products, both products remain in the development phase. We anticipate that both products will involve supplements to our existing FDA pre-market approval; therefore, introduction and timing of these products into the marketplace will be contingent on FDA approval.

The dental parking station is intended to provide a safer, temporary resting place for a hypodermic syringe. During a procedure, dentists often reuse a hypodermic needle on the same patient when additional anesthesia is required. Since the needle is not destroyed immediately after the initial use, dentists generally recap the needle or leave the needle exposed, increasing the risk of an accidental needlestick injury. The NeedleZap ^® unit sets directly on the dental parking station enabling the dentist to recap, or disintegrate, the hypodermic needle easily with one hand at the end of the procedure, and significantly reducing the risk of a needlestick injury.

The butterfly needle burner is intended to accommodate needles not secured to a hypodermic syringe. Butterfly needles are used primarily for IV’s and kidney dialysis. Since the original NeedleZap ^® unit was intended to disintegrate hypodermic needles held by a syringe, the butterfly needle burner necessitated design modifications, including a change to the housing and repositioning of the electrode system.

On December 30, 2003, we acquired Medical Safety Technologies, Inc. from UTEK Corporation (AMEX:UTK), an innovative technology transfer company dedicated to building bridges between university developed technologies and commercial organizations. Medical Safety Technologies, or MSTI, holds the worldwide exclusive license to a patented invention, known as the “Safe Receptacle for Sharps,” that is designed to aid in the safe transport of sterile and used sharp medical instruments. This Emory University invention was developed to help reduce the possibility of needlestick injuries by maintaining medical instruments in an angled, accessible position while encasing their sharp edges. We believe the Safe Receptacle for Sharps device is complimentary to our NeedleZap ^® product. By expanding our future product line, we hope to bring added value to the sales and distribution channel we are building. However, we are not presently pursuing the sharps receptacle as management believes resources should be conserved for marketing the currently approved product.

Receivership

On November 22, 2006, Martin Management Services, Inc. (the “Receiver”) was appointed as receiver for E Med by the Franklin County, Ohio Common Pleas Court in the action filed on August 6, 2006 by Complete Investment Management, Ltd., or CIM, against the Company. CIM has sought the repayment of a loan made by CIM to E Med in the amount of $548,000. E Med is in default in its payments to CIM due to declining revenue and cash flow. The Receiver is currently seeking to sell the company for the benefit of its creditors.

Recent Developments

From July 9 through July 25, 2007, a Food and Drug Administration investigator conducted an inspection of our operations. At the conclusion of the inspection an FDA Form 483 was issued to the company listing observations of the inspector, which we responded to on August 7, 2007. The observations included deficiencies in or operating procedures, which will require correction. We voluntarily suspended shipment of our products to assure we are in compliant. We have completed the corrections and requested a re-inspection by the FDA. We have received verbal approval from the FDA to resume shipments if we believe we are in compliance. We believe we are now in compliance and have accepted two orders which we expect to ship before the end of April.

Distribution of Our Products

In March 2006, we entered into a manufacturing and distribution agreement with One World Sourcing, LLC for the manufacture and distribution of the NeedleZap ^® device in the Peoples Republic of China. The contract calls for royalty payments on all sales of the device in China. Approvals have been secured for sale of the device in China. A prototype unit was furnished to us in September 2006 for testing and approval. Initial orders which had been placed for delivery in the fall of 2006 subject to customer approval, have been placed on hold until the receiver has made the required decisions relative to the future of the Company. Approval of our patent for the NeedleZap ^® device in the Republic of China has been received.

In December 2004, we appointed Moscow, Russia-based Actual Medical Supplies (“AMS”) our exclusive distributor of NeedleZap ^® products in the Russian Federation. AMS has obtained a registration certificate from the Russian Federation’s Federal Service of Health Care and Social Development Control necessary to sell the NeedleZap ^® in Russia. The Russian Federation alone has a population of 145 million people and we believe the other countries in the Commonwealth of Independent States represent a potentially significant market for our products. The Russian Federation, Department of Health required an approval process for the product to be sold in Russia. That process was successfully completed and the approval was granted on January 5, 2005 and is effective for ten years.

In January 2004 the NeedleZap ^® device underwent extensive testing at Fort Drum, New York. We received the report and evaluation of the NeedleZap ^® in November 2004. The testing showed the device was suitable for “brick and mortar” type hospital settings, but changes to make the device more durable are necessary for field applications. Based on these test results, we immediately targeted the veteran hospitals as a potential market and have begun research required for modifying the NeedleZap ^® to make it more durable for field applications.

Research and Development

In 2007, we did not expend any funds on research and development compared to $1,200 in 2006. We hope to increase our R&D budget in the future if we are able to continue as a going concern. In addition, to supplement our own R&D efforts, we have worked with other organizations to identify and develop improvements for the existing product line and new products that would be compatible with our existing product line for possible acquisition.

Patents and Trademarks

Patents and trademarks are critical in the medical device industry. We believe strongly in protecting our intellectual property and received final approval for our U.S patent in March 2006 in connection with our NeedleZap ^® product line, and have registered the “NeedleZap” trademark. Our Medical Safety Technologies subsidiary’s Safe Receptacle for Sharps is also protected by a U.S. patent. In June 2006 we received final approval for our NeedleZap ^® patent in the Peoples Republic of China. We also rely upon trade secrets and proprietary know-how. However, our intellectual property rights may not provide us with any significant degree of protection from our competitors. Please turn to “Competition“ below for additional information about competition in our business.

We do not believe that our products infringe on the intellectual property rights of others, although infringements that we are unaware of may exist now or may arise in the future. There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry. Litigation may be necessary to enforce our intellectual property rights or to defend E Med against claimed infringement of the rights of others. Any litigation would be costly and time consuming, and an adverse determination could subject us to significant liability or require us to seek licenses from third parties to allow us to continue to sell our products.

Royalty Agreement

We acquired the NeedleZap ^® technology from NeedleZap Partners in exchange for shares of our stock and a royalty of $5.00 for every NeedleZap ^® unit we sell until five million units are sold. Additionally, we have agreed to pay $1.00 per unit sold which will be divided amongst two of our officers and our director of research and development. This arrangement is currently the subject of ongoing litigation. Please turn to “Legal Proceedings” on page 7 for additional information regarding the case. For additional information about these royalty arrangements, please see Note I of our financial statements.

Employees

We currently have no paid employees due to our financial situation. Our CEO/CFO continues to perform services for the company without compensation. We presently out-source manufacturing and other key aspects of our business.

Principal Suppliers

We have contracted with Frantz Medical Development Ltd. to manufacture our products in the United States. Frantz Medical has been approved by the FDA to manufacture NeedleZap ^® units. We have entered into a manufacturing and distribution license agreement with One World Sourcing, LLC for the manufacture and distribution of the NeedleZap ^® device in the Peoples Republic of China. One World Sourcing is not currently an FDA approved manufacturer and products manufactured by One World Sourcing may not be sold in the United States. In addition to Frantz Medical, we believe that there are a number of domestic manufacturers with whom we could subcontract the manufacturing of our products at competitive rates who would also satisfy applicable quality assurance standards.

Our products are primarily comprised of ABS plastic, batteries, wiring, copper electrodes and aluminum. All of these materials and components are readily available from numerous suppliers at competitive pricing.

Competition

The medical waste disposal sector is highly competitive and is presently dominated by Baxter International, Inc., Johnson & Johnson, Kimberly-Clark, Steri-Cycle, Waste Management, BMI and other large suppliers who manufacture and sell medical waste disposal system products that store, and in some instances, treat certain contaminated medical instruments until removed for further treatment, but do not themselves decontaminate the instruments. There are generally substantial disposal costs associated in connection with contaminated products.

Our strategy is to develop a niche market within the industry through our ability to destroy commonly used syringes with a product that is both portable and relatively inexpensive — the NeedleZap ^® unit. We believe these factors distinguish our product from the generally less portable and substantially more expensive products offered by our competitors. In addition, we believe our patents together with the application and review time necessary for FDA approval of any similar competitive device should provide us with a competitive advantage, at least for a period of time. Of course, we cannot guaranty that these advantages will allow us to compete successfully or that one of our competitors will not develop a superior product. This is especially true given that many of our competitors are larger, have significantly greater resources, and broader product lines than we do.

Governmental Regulations

Because we manufacture and sell medical devices, our products, packaging and manufacturing procedures are subject to regulations by the Food and Drug Administration (FDA) and the Department of Health and Human Services and similar state agencies. Medical devices are classified into three regulatory categories (Classes I, II and III). The amount of regulation varies dependant upon the classification. NeedleZap ^® is an FDA class III device. Because these types of devices are relatively new to the marketplace they are subject to the highest level of regulation. The FDA has reviewed and approved NeedleZap ^® (PMA P010065) for sale in the United States.

Our products are also subject to regulation in foreign countries. For example, NeedleZap ^® is considered an EU Class I medical device and must qualify for and bear the “CE Mark” in European Union countries. Depending upon the distribution relationships established to market our products in countries other than the United States, we may be responsible for obtaining approval to sell in those countries.

In addition to the regulatory framework for product approvals, we are subject to regulation under federal and state laws, including requirements regarding occupational safety, environmental protection and hazardous substance control. We are not aware of any specific environmental liabilities that we would incur in connection with our business. Our sales and marketing practices are subject to regulation by the U.S. Department of Health and Human Services, pursuant to federal anti-kickback laws, and are also subject to similar state laws.

We have devoted substantial financial and human resources to comply with these extensive regulations by the FDA and other government agencies and will continue to do so in the future. Last year the FDA inspected our operations and found them deficient in several respects, although we believe these deficiencies have now been corrected (please turn to “Recent Developments” on page 2 for additional information). If we again failed to comply with applicable regulations we could be subject to administrative and criminal actions, which would likely significantly impair our business. Our operations may also be negatively impacted if the United States or state governments or the governments of other countries where we market our products pass new legislation or if courts issue new rulings with respect to existing legislation governing our products. Continued compliance with regulatory requirements is likely to be costly.

Forward Looking Statements

Some of the statements that we make in this report, including statements about our confidence in E Med’s prospects and strategies and our expectations about E Med’s sales expansion, are forward-looking statements within the meaning of § 21E of the Securities Exchange Act. Some of these forward-looking statements can be identified by words like “believe,” “expect,” “will,” “should,” “intend,” “plan,” or similar terms; others can be determined by context. Statements contained in this report that are not historical facts are forward-looking statements. These statements are necessarily estimates reflecting our best judgment based upon current information, and involve a number of risks and uncertainties. Many factors could affect the accuracy of these forward-looking statements, causing our actual results to differ significantly from those anticipated in these statements. While it is impossible to identify all applicable risks and uncertainties, they include:

•

our ability to continue operating as a going concern and emerge from receivership;

•

our ability to execute our business plan;

•

our ability to successfully market and sell our products;

•

our ability to continue to comply with rules and regulations governing our products;

•

our ability to gain and retain market share from our competitors, many of whom have greater financial and other resources than we do;

•

the introduction of competing products by other companies;

•

our ability to protect our patents, copyrights and other intellectual property rights;

•

pressure on pricing from our competitors or customers;

•

continued availability of components for our products and stability in the cost of these components;

•

our reliance on subcontractors to manufacture our products;

•

our reliance on independent distributors to market and sell our products;

•

our financial resources are limited and we are dependant on increasing sales to generate cash for operations; and

•

our ability to comply with SEC regulations and filing requirements applicable to us as a public company.

You should not place undue reliance on our forward-looking statements, which reflect our analysis only as of the date of this report. The risks and uncertainties listed above and elsewhere in this report and other documents that we file with the Securities and Exchange Commission, including our annual report on Form 10-KSB, quarterly reports on Form 10-QSB, and any current reports on Form 8-K, must be carefully considered by any investor or potential investor in E Med.

How to Learn More About E Med

We file annual, quarterly and special reports and other information with the SEC. Our SEC filings are available to the public on the internet at the SEC’s web site at SEC.gov. You may also read and copy any document we have filed at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the SEC’s public reference room by calling the SEC at 1-800-SEC-0330. To learn more about E Med you can also contact us directly at the address or phone number listed below or visit our website at NeedleZap.com.

E Med Future, Inc.

34 Clay Street

Millersburg, Ohio 44654

Phone: 330-674-1363

Email: info@NeedleZap.com

Item 2.

Description of Property.

We lease approximately 500 square feet of office and our primary warehouse space in Millersburg, Ohio for $600 a month.

Item 3.

Legal Proceedings.

On or about January 20, 2008, the Receiver entered into a settlement agreement with Kenneth Jackson and Safe Medical Solutions, LLC, which was filed of record in Complete Investment Management, Inc. v. E Med Future, Inc. , Case No. 06 CVH 10019 (Franklin County, Ohio Court of Common Pleas, J. Frye) on January 25, 2008. On January 31, 2008, an Agreed Order for Permanent Injunctive Relief was filed in the same case. Pursuant to the agreement, the parties agree to dismiss and release all claims within Safe Medical Solutions, LLC v. Sullivan, et al. , Case No. 06 CV 9757 (Franklin County Court of Common Pleas, J. Brown). Jackson and Safe Medical agree to dismiss the Cancellation Action No. 92045999, pending before the U.S. Trademark Trial Appeal Board, with regard to the Needlezap trademark. The Receiver agrees to release all cross-claims as against Jackson and Safe Medical in the Safe Medical case. Jackson and Safe Medical surrender and waive any claim of ownership or license with regard to any intellectual property, including trademarks and patents, related to the Needlezap product, but retain the right to receive royalties on the future sale of Needlezap units. Jackson and Safe Medical also retain the right to sell any Needlezap units they currently own. The Receiver agreed with Jackson to either contract for the sale of, or offer up for public sale, all assets of E Med within 120 days of the agreement. Jackson and Safe Medical retain a limited “right of first refusal” with regard to any sale of the E Med assets. While IMET Corporation remains a third-party defendant in the Complete Investment case, the Receiver anticipates that all claims will shortly be resolved and IMET dismissed from the action.

For additional information about these suits, please reference Item 3 of our December 31, 2006 Form 10-KSB that we filed with the SEC on April 17, 2007.

Item 4.

Submission of Matters to a Vote of Security Holders.

Not applicable.

PART II

Item 5.

Market For Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

Our common stock is currently traded on the OTC Bulletin Board (“OTCBB”) under the trading symbol “EMDF.OB.” The following table lists the high and low closing sale prices of our common stock during 2007 and 2006 as reported on OTCBB. These sale prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.


	2007				2006
	High		Low		High		Low
Fourth Quarter	$	0.012	$	0.005	$	0.013	$	0.005
Third Quarter	$	0.014	$	0.007	$	0.030	$	0.010
Second Quarter	$	0.019	$	0.005	$	0.049	$	0.026
First Quarter	$	0.019	$	0.007	$	0.075	$	0.035

There were approximately 983 stockholders of record of the Company’s common stock as of March 31, 2008. We estimate that an additional 500 stockholders own stock in their accounts at brokerage firms and other financial institutions.

We intend to reinvest our earnings, if any, in the business, and have never declared or paid, and do not intend to declare or pay, any cash dividends on our stock.

Item 6.

Management’s Discussion and Analysis or Plan of Operation.

We manufacture and market products designed to reduce accidental hypodermic needlestick injuries. Our primary product, NeedleZap ^® , completely disintegrates the sharp portion of the needle. Please turn to “Our Products“ at page 1 for a more detailed discussion of our product line. There are an estimated one million accidental needlesticks reported in the United States in the healthcare industry alone, and we believe the applications for our products are far reaching. NeedleZap ^® is designed to work within the parameters of recent OSHA needlestick mandates which require employers to take advantage of new technologies to prevent needlesticks in the workplace. We also believe there is a potential global market in developed as well as developing countries. For example, NeedleZap ^® could be a component in the fight against AIDS in many African countries where the disease is endemic. For additional information about our global marketing efforts, please see “Distribution of Our Products“ at page 3.

Looking Ahead

We have incurred net losses while we obtained FDA approval and patent protection for our NeedleZap ^® product and entered into distribution relationships. We have not had significant sales volume to date. We believe we have now obtained significant experience in how to market our products effectively and we had an increase in sales in 2007, which none the less were less than projected. Of course, we cannot guarantee that sales will increase or that we will be able to attain profitability. We are currently in receivership and our future is uncertain.

Results of Operations

We are a development stage company and did not have full approval to market and sell our products until March 2003. Initial sales in 2003 caused us to be optimistic that our revenues and profits would increase in subsequent years. We were disappointed when our results did not meet expectations due to lower than anticipated sales.

Net Sales

We had net sales of $123,429 in 2007, compared with $82,349 in 2006, an increase of $41,080 or 49.9%. This increase is primarily attributable to additional international sales in 2007.

Costs and Expenses

Operating costs and expenses decreased $85,419, or 24.1%, to $269,601 in 2007 from $355,020 in 2006. The decrease was primarily caused by cost cutting measures instituted by management. Selling, general and administrative expense decreases were partially offset by over $65,000 of legal fees incurred in connection with the receivership.

Other expenses increased to $59,903 in 2007 from $47,190 in 2006 due to an increase in the interest rate for the line of credit at Key Bank.

Net Loss

In 2007, our net loss decreased to $206,075, or less than $0.01 a share, from a net loss of $319,861, or $0.01 a share, in 2006, primarily as a result of substantially decreased costs.

Selected Financial Data

The following table includes selected financial information for 2006 and 2005. Please turn to our audited financial statements beginning at page F-1, including the accompanying footnotes, for additional information.


	Year Ended December 31						Increase (Decrease)
	2007			2006			Dollars			Percentage
Net sales	$	123,429		$	82,349		$	41,080		49.9	%
Net (loss)		(206,075	)		(319,861	)		(113,786	)	(35.6	)%
Net (loss) per share		(0.01	)		(0.01	)		(0.00	)	(0.0	)%
Total assets		78,422			107,753			(29,331	)	(27.2	)%
Stockholders’ equity (deficit)		(1,471,378	)		(1,265,303	)		206,075		16.3	%

Financial Condition and Liquidity

We had available cash of $3,216 on December 31, 2007, compared to $8,947 cash available at the end of 2006. The decrease is primarily the result of not having sales in the last half of the year due to the FDA requirement that we not make any shipments until full compliance with FDA regulations was achieved. Cash provided by operations increased to $18,270 in 2007 from cash used by operations of $51,099 in 2006. Cash provided by operations increased primarily due to decreases accounts receivable and inventory and increases in accrued liabilities and accounts payable.

On November 12, 2002, we entered into a credit facility with Key Bank (NA). The facility provides us with a working capital line-of-credit of up to $150,000 and currently bears interest at 10.75%. The credit facility is secured by all of E Med’s assets and must be paid back in full on demand. We presently have drawn $121,396 on the facility.

On April 1, 2004, we entered into a loan agreement with a private investor in the amount of $750,000. The convertible promissory note bears interest at 7.5% payable quarterly with the principal due in five years and is secured by all of our assets. The note is convertible at the holder’s option into 1.5 million shares of our unregistered common stock, subject to adjustment for dilutive issuances. In connection with the loan, we also agreed to pay the lender a $3.00 royalty on each of the first 1.0 million and $2.00 on the second 1.0 million NeedleZap ^® units sold, with maximum total royalty payments of $5.0 million. The loan agreement was amended effective December 31, 2004 to reduce the loan amount to $548,000. Payment of interest and royalties was deferred until January 1, 2006, provided we provide monthly sales reports to the lender when due. In addition, if we arrange an increase in bank financing, the lender agreed to subordinate its security interests to the secured interests of the banking institution up to a maximum of $500,000. We have not paid royalties to the lender and are currently in default under the loan. Please turn to “Legal Proceedings” on page 7 for more information.

From September 2004 to June 2006, Ronald L. Alexander, one of our directors, loaned E Med a total of $136,120. On June 15, 2006, we issued Mr. Alexander 3.5 million unregistered shares in partial satisfaction of this loan. On June 28, 2006, a private investor purchased 1.5 million shares of our unregistered shares for $45,000, or $0.03 a share. On June 15, 2006, we issued 3.5 million unregistered shares to Donald Sullivan, our CFO, interim CEO and a director, for payment of accrued wages from January 1, 2005 through May 31, 2006.

Our primary need for capital is to fund operations and the development of new products. More recently we have been forced to expend significant funds to defend the company from various legal actions. Please turn to “Legal Proceedings” on page 7 for additional information. Historically, our capital requirements have been met by a combination of loans from stockholders and other investors, our line of credit with Key Bank, and funds from operations. Although sales continue to be disappointing, we believe increased sales may eventually meet our capital needs in the long-term. However, current sales are not adequate to meet our cash needs, and without additional loans or equity infusions we will not be able to continue our operations.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements.

Critical Accounting Policies

Our independent auditors’ report contains a “going concern” note. In Note C of our financial statements the auditors point out that we have incurred net losses that raise “substantial concerns” about our ability to continue as a going concern. For more information, please turn to our audited financial statement beginning on page F-1 and Note C in particular. We are currently in receivership and cannot guaranty that we will be able to successfully emerge from receivership, sell our assets or attain profitability.

For a discussion of additional significant accounting policies that impact our financial reporting, please turn to Note B of our financial statements.

Item 7.

Financial Statements.

Our 2007 and 2006 consolidated financial statements audited by Meyler & Company, LLC follow this annual report beginning on page F-1.

Item 8.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 8A(T).

Controls and Procedures.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

Our chief financial and executive officer evaluated our disclosure controls and procedures and internal control over financial reporting. In making this assessment, he used the criteria set forth in the audit guidelines for small business published by Practitioners Publishing Co. Based on these criteria, he concluded that our disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2007. In addition, no change in internal control over financial reporting occurred during the quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Item 8B.

Other Information

The Receiver has received offers to purchase the assets of E Med or to purchase a controlling interest of the shares of E Med. The Receiver is currently evaluating these offers and expects to have agreements in place to sell each component within the next 90 days. However, there can be no assurances that the Receiver will be able to complete a transaction in that time frame or at all.

PART III

Item 9.

Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act.

Our directors and executive officers are:

Donald Sullivan , age 65, was appointed E Med’s chief financial officer in November 2004, a director in July 2005 and interim CEO in September 2005. Prior to joining E Med, from January through October 2004, Mr. Sullivan was employed as vice president and chief financial officer of Capital Furniture Works, Inc., a furniture manufacturer. From 1998 through 2003, Mr. Sullivan was the owner of Danville Pallet Co., a wooden pallet manufacturer. Previously, Mr. Sullivan was employed for approximately 20 years by Castle Nursing Homes, Inc. in various capacities, including president, secretary, treasurer and chief financial officer. Mr. Sullivan was licensed as a certified public accountant in 1967 and worked for over 10 years as a partner in various CPA firms.

Ronald L. Alexander , age 58, is an original E Med investor and has served as a director since July 2005. Mr. Alexander currently owns and operates several businesses, including funeral homes and a hospital bed sale and rental company.

Committees of the Board

We are still in the early stages of our business plan and have not yet realized significant revenues. Because we are still in the start-up phase, our board consists of only two directors — Mr. Sullivan, who also serves as our chief financial officer and interim chief executive officer, and Mr. Alexander. Because of the small size of our board, the directors have not designated audit, nominating or other committees. Instead, these responsibilities are handled by the entire board. Without an audit committee, we have not presently designated a director as “an audit committee financial expert” as defined by SEC rules.

Code of Ethics

We believe strongly in the importance of ethical conduct in our business endeavors, and on January 1, 2004, our board of directors unanimously adopted a code of conduct and ethics that applies to all of our officers, directors and employees, including our principal executive officer and principal financial and principal accounting officer. A copy of our code is attached to our 2003 Form 10-KSB filed with the SEC on March 30, 2004.

Compliance with § 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than 10% of our common stock, to make filings with the SEC reporting their ownership of our common stock and to furnish us with copies of these filings. Based solely on our review of copies of reports furnished to us, we believe that all § 16(a) filing requirements were met in 2007. Copies of these filings are available on the SEC’s website at SEC.gov or our website at NeedleZap.com.

Item 10.

Executive Compensation.

Due to our financial condition, Donald Sullivan was not paid in 2007 for serving as our chief financial officer and interim chief executive officer although we accrued $77,000 in salary for him. On June 15, 2006, we issued 3.5 million unregistered shares to Mr. Sullivan for payment of accrued wages from January 1, 2005 through May 31, 2006. Mr. Sullivan was not otherwise compensated in 2006, although we accrued $84,000 in salary for him. None of our officers or employees has an employment or severance contract or similar agreement with the Company.

Director Compensation

Our directors did not receive any compensation for serving on our board in 2006.

Equity Compensation Plans

On December 20, 2004, our board adopted the E Med Future, Inc. 2004 Stock Option Plan. The stock plan provides for the issuance of up to 10.0 million shares of our common stock or options to purchase shares and is administered by the board. The purpose of the plan is to encourage and enable our officers, directors, employees and consultants, upon whose judgment, initiative and efforts we largely depend for the successful conduct of our business, to acquire a proprietary interest in E Med. We believe that providing these individuals with a direct stake in E Med’s welfare will assure a closer identification of their interests with those of the Company, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.

Item 11.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table lists the stock ownership of all stockholders who beneficially own more that 5% of our stock as well as our executive officers and directors as of March 31, 2008.


Significant Stockholders	Shares	Percentage
Robert J. Ochsendorf 794 Morrison Road Columbus, Ohio 43230	3,000,000	7.0	%

PR Market Research Company* 16738 Maryann Furnace Road Nashport, Ohio 43830	2,500,000	5.9	%

Officers and Directors

Ronald L. Alexander** 794 Morrison Road Columbus, Ohio 43230	4,259,500	10.0	%

Donald Sullivan 794 Morrison Road Columbus, Ohio 43230	4,000,000	9.4	%

All executive officers and directors as a group	8,259,500	19.4	%

*	PR Market Research is owned by Kenneth Jackson, our former director of research.

**	Mr. Alexander’s wife owns 21,000 of these shares. Mr. Alexander is the sole shareholder of Alexander Funeral Homes, Inc., which owns 68,358 shares, Personal Touch, Inc., which owns 15,000 shares, and Holmes County Memorial Inc., which owns 8,000 shares.

Item 12.

Certain Relationships and Related Transactions.

Royalty Agreements with Officers

We have agreed to pay a royalty of $1.00 for every NeedleZap ^® unit sold which will be divided amongst D. Dane Donohue, our former chief executive officer and director, Robert J. Ochsendorf, our former CEO and director, and Kenneth A. Jackson, our former director of research and development. Messrs. Donohue and Ochsendorf have agreed to temporarily waive royalty payments until E Med is profitable. However, Jackson claims that he is owed these fees. For additional information about Jackson’s claims, please turn to “Legal Proceedings” on page 7.

Loans from Employees and Directors

Item 13.

Exhibits.


2.1		Agreement and Plan of Merger dated April 2, 2003 by and among Micro-Economics, Inc., E Med Sub, Inc. and E Med Future, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 11, 2003 (Reg. No. 033-55254))

2.2		Agreement and Plan of Acquisition by and between Medical Safety Technologies, Inc., UTEK Corporation and E Med Future, Inc. dated December 20, 2003 (Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on January 14, 2004 (Reg. No. 033-55254))

3(i)(1)		Articles of Incorporation of the Company (Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the Securities and Exchange Commission on December 2, 1992 (Reg. No. 033-55254))

3(i)(2)		Certificate of Amendment to Articles of Incorporation of the Company filed with the Nevada Secretary of State on January 29, 2003 (Incorporated by reference to the Company’s Quarterly Report on Form 10-QSB dated March 31, 2003 as filed with the Securities and Exchange Commission on May 22, 2003 (Reg. No. 033-55254))

3(i)(3)		Certificate of Amendment to Articles of Incorporation of the Company filed with the Nevada Secretary of State on April 4, 2003 (Incorporated by reference to the Company’s Quarterly Report on Form 10-QSB dated March 31, 2003 as filed with the Securities and Exchange Commission on May 22, 2003 (Reg. No. 033-55254))

3(ii)(1)		Bylaws of the Company (Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the Securities and Exchange Commission on December 2, 1992 (Reg. No. 033-55254))

3(ii)(2)		Amendment No. 1 to the Bylaws of the Company (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2003 (Reg. No. 033-55254))

4.1		Form of Consulting and Subscription Agreement (Incorporated by reference to the Company’s Registration Statement on Form S-8 as filed with the Securities and Exchange Commission on May 12, 2003 (Reg. No. 333-105151))

10.1		2004 Stock Option Plan of the Company (Incorporated by reference to the Company’s Registration Statement on Form S-8 as filed with the Securities and Exchange Commission on December 22, 2004 (Reg. No. 333-121529))

10.2		License and Distribution Agreement among the Company and ITDevelopment Solutions, Inc. dated September 16, 2004 (Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on September 20, 2004 (Reg. No. 033-55254))


14		Code of Conduct and Ethics of the Company (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2003 (Reg. No. 033-55254))

31		Rule 13a-14(a)/15d-14(a) Certification of Principal Executive and Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

*	Filed with this annual report

Item 14.

Principal Accountant Fees and Services.

The following table lists the aggregate fees billed for professional audit services provided to us by Meyler & Company, LLC, our principal accountants, for the audit of our 2007 and 2006 annual financial statements and for other services rendered.


	2007		2006
Audit fees	$	14,000	$	18,000
Audit related fees		9,700		10,500
Tax fees		—
All other fees		—

T OTAL	$	23,700	$	28,500

Because of the small size of our board, the directors have not designated an audit committee. Instead, these responsibilities are handled by the entire board, which considers and pre-approves any audit or non-audit services to be performed by Meyler & Company. Our board believes the services provided by Meyler & Company are compatible with maintaining our auditor’s independence.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, E Med Future, Inc. caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		E M ED F UTURE , I NC .

Date: April 22, 2008		/s/ Donald Sullivan
		Donald Sullivan, Chief Financial Officer
		and interim Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of E Med Future, Inc. and in the capacities and on the dates indicated.


Date: April 22, 2008		/s/ Ronald L. Alexander
		Ronald L. Alexander, Director

Date: April 22, 2008		/s/ Donald Sullivan
		Donald Sullivan, Chief Financial Officer,
		interim Chief Executive Officer and Director

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

AUDITED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

CONTENTS


		Page
Report of Independent Registered Public Accounting Firm		F-1

Consolidated Balance Sheets		F-2

Consolidated Statements of Operations		F-3

Consolidated Statements of Cash Flows		F-4

Consolidated Statement of Stockholders’ Deficit		F-6

Notes to Consolidated Financial Statements		F-8

MEYLER & COMPANY, LLC

ONE ARIN PARK

1715 HIGHWAY 35

MIDDLETOWN, NJ 07748

Report of Independent Registered Public Accounting Firm

To the Board of Directors

E Med Future, Inc. and Subsidiary

Columbus, Ohio

We have audited the accompanying consolidated balance sheets of E Med Future, Inc. and Subsidiary (a Development Stage Company) as of December 31, 2007 and 2006 and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the two years then ended and for the cumulative development stage period March 14, 2000 (Inception) to December 31, 2007. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of E Med Future, Inc. and Subsidiary as of December 31, 2007 and 2006, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2007 and from March 14, 2000 (Inception) to December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note C to the consolidated financial statements, the Company incurred net losses of $206,075 and $319,861 for the years ended December 31, 2007 and 2006, respectively, and has a negative working capital of $951,135 and an accumulated deficit of $ 5,009,195 at December 31, 2007. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note C. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

See also Note M as to appointment of receiver for the Company.


		Meyler & Company, LLC
Middletown, NJ
April 15, 2008

F-1

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS


	December 31,
	2007			2006
ASSETS

CURRENT ASSETS
Cash	$	3,216		$	8,947
Accounts receivable, net of allowance for doubtful accounts of $3,966 in 2007 and 2006, respectively		—			358
Inventory		61,574			82,711
Deposit		4,575			4,575

Total Current Assets		69,365			95,591

EQUIPMENT, net of accumulated depreciation of $7,770 and $5,699, in 2007 and 2006, respectively		9,090			11,162

TOTAL ASSETS	$	78,455		$	107,753


LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Notes payable to bank	$	121,396			149,098
Current portion of note payable		1,089			1,089
Notes payable to related party		71,821			68,120
Accounts payable		321,004			250,311
Accounts payable to related party		39,216			41,369
Accrued expenses		390,974			240,069
Customer deposits		75,000			75,000

Total Current Liabilities		1,020,500			644,026

LONG-TERM DEBT
Convertible promissory note payable		548,000			548,000

Total Long-Term Liabilities		548,000			548,000

STOCKHOLDERS’ DEFICIT
Common stock $0.001 par value, 50,000,000 authorized, 42,513,415 issued and outstanding at December 31, 2007 and 2006, respectively		42,513			42,513
Paid-in-capital		3,476,637			3,476,637
Deficit accumulated during development stage		(5,009,195	)		(4,784,453	)

Total Stockholders’ Deficit		(1,490,045	)		(1,265,303	)

Total Liabilities and Stockholders’ Deficit	$	78,455		$	107,753

See accompanying notes to consolidated financial statements.

F-2

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Years Ended December 31,						Period March 14, 2000 (Inception) to December 31, 2007
	2007			2006
NET SALES	$	123,429		$	82,349		$	1,126,279

COSTS AND EXPENSES
Cost of goods sold		42,223			47,977			1,045,711
Selling, general and administrative		243,970			277,389			2,156,447
Impairment of long lived assets					22,500			273,844
Research and development					1,200			16,747
Consulting expense					3,000			2,112,400
Impairment of goodwill					—			188,500
Depreciation and amortization		2,075			2,954			148,067

Total Costs and Expenses		288,268			355,020			5,941,716

NET OPERATING LOSS		(164,839	)		(272,671	)		(4,815,437	)

OTHER INCOME (EXPENSE)
Interest and other income					5,842			5,865
Interest expense		(59,903	)		(53,032	)		(199,623	)

Total Other Expenses		(59,903	)		(47,190	)		(193,758	)

NET LOSS	$	(224,742	)	$	(319,861	)	$	(5,009,195	)

NET LOSS PER COMMON SHARE (Basic and diluted)	$	(0.01	)	$	(0.01	)	$	(0.50	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		42,513,415			36,916,155			10,088,474

See accompanying notes to consolidated financial statements.

F-3

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Years Ended December 31,						Period March 14, 2000 (Inception) to December 31, 2007
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(224,742	)	$	(319,861	)	$	(4,990,528	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		2,075			2,954			148,067
Consulting expense					3,000			2,112,400
Research and development costs								8,808
Start-up costs								19,177
Amortization of prepaid expense								39,913
Loss on inventory obsolescence								225,110
Impairment of long lived assets					22,500			273,844
Impairment of goodwill								188,500
Changes in operating assets and liabilities:
Accounts receivable		358			16,052
Inventory		21,137			22,417			(135,669	)
Prepaid expenses and compensation					8,400			(9,312	)
Deposits					(4,575	)		(4,575	)
Accounts payable		80,932			9,137			314,331
Accounts payable to related party		(2,153	)		(15,739	)		39,216
Accrued expenses		140,663			129,616			460,974
Customer deposits					75,000			75,000

Net Cash Provided by (Used in) Operating Activities		18,270			(51,099	)		(1,234,744	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment					—			(94,806	)

Net Cash Used in Investing Activities					—			(94,806	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock					45,000			45,000
Initial capitalization								1,666
Cash acquired in acquisition								200,000
Notes payable		(27,702	)		(2,019	)		122,485
Notes payable to related party		3,701			17,430			415,615
Convertible promissory note payable								548,000

Net Cash Provided by (Used in) Financing Activities		(24,001	)		60,411			1,332,766

INCREASE (DECREASE) IN CASH		(5,731	)		9,312			3,216
CASH, BEGINNING OF YEAR		8,947			(365	)

CASH, END OF YEAR	$	3,216		$	8,947		$	3,216

See accompanying notes to consolidated financial statements.

F-4

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


	For the Years Ended December 31,			Period March 14, 2000 (Inception) to December 31, 2007
	2007	2006
Supplemental Disclosure of Cash Flow Information:
Interest paid		$	11,668	$	46,207
Supplemental Schedule of Non-Cash Investing and Financing Activities:
NeedleZap Partnership Contribution of Assets to Company
Inventory					151,015
Equipment					133,912
Patent					189,089
Issuance of common stock for consulting services and compensation			3,000		2,259,067
Loss on inventory obsolescence					225,110
Impairment of long lived assets			22,500		273,844
Issuance of 1,250,000 shares valued at $0.3108 per share to acquire MSTI and allocation of purchase price to license					188,500
Issuance of common stock in payment of loan			70,000		336,484
Issuance of common stock in payment of accrued wages			70,000		70,000
Issuance of common stock in payment of accounts payable			12,000		12,000
Settlement of accounts payable with fixed assets			7,310		7,310

See accompanying notes to consolidated financial statements.

F-5

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Period March 14, 1990 (Inception) to December 31, 2007


	Common Shares	Common Stock		Paid in Capital		Deficit Accumulated During Development Stage			Total
Inception, March 14, 1990 to December 31, 2000	1,000,000	$	1,000	$	666	$	(1,666	)
Net loss for the year ended December 31, 2001							(81,917	)	$	(81,917	)

Balance December 31, 2001	1,000,000		1,000		666		(83,583	)		(81,917	)
Net loss for the year ended December 31, 2002							(298,709	)		(298,709	)

Balance December 31, 2002	1,000,000		1,000		666		(382,292	)		(380,626	)

Issuance of common shares for preferred stock in reverse merger	19,850,000		19,850		485,150					505,000
Issuance to consultants for services rendered @ $0.15 per share	4,000,000		4,000		596,000					600,000
Issuance for Strategic Alliance Agreement @ $0.90 per share	34,000		34		30,566					30,600
Issuance of shares for acquisition of MSTI @ $0.3108 per share	1,250,000		1,250		387,250					388,500
Net loss for the year ended December 31, 2003							(866,581	)		(866,581	)

Balance December 31, 2003	26,134,000		26,134		1,499,632		(1,248,873	)		276,893

June 20, 2004 issuance of shares @ $0.3566 per share in payment of loan	749,415		749		265,735					266,484
September 16, 2004 issuance of shares @ $0.44 per share for consulting agreement	2,000,000		2,000		878,000					880,000
November 5, 2004 issuance of shares @ $0.53 per share for consulting services	300,000		300		158,700					159,000
Net loss for the year ended December 31, 2004							(1,117,556	)		(1,117,556	)

Balance December 31, 2004	29,183,415		29,183		2,802,067		(2,366,429	)		464,821

January 15, 2005 issuance of 3,580,000 shares @ $0.13 per share for consulting services and employee and director compensation	3,580,000		3,580		461,820					464,400
Net loss for the year ended December 31, 2005							(2,098,163	)		(2,098,163	)

Balance December 31, 2005	32,763,415	$	32,763	$	3,263,887	$	(4,464,592	)	$	(1,167,942	)

See accompanying notes to consolidated financial statements.

F-6

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Period March 14, 1990 (Inception) to December 31, 2007


	Common Shares	Common Stock		Paid in Capital		Deficit Accumulated During Development Stage			Total
Balance December 31, 2005	32,763,415	$	32,763	$	3,263,887	$	(4,464,592	)	$	(1,167,942	)

June 15, 2006, issuance of 7,000,000 shares @ $0.02 per share to settle amounts due to CEO and Director	7,000,000		7,000		133,000					140,000
September 2006, issuance of 400,000 shares @0.03 per share to settle accounts payable	400,000		400		11,600					12,000
September 2006, issuance of 850,000 shares @ $0.03 per share for services	850,000		850		24,650					25,500
September 2006, issuance of 1,500,000 shares @0.03 per share for cash	1,500,000		1,500		43,500					45,000
Net loss for the year ended December 31, 2006							(319,861	)		(319,861	)

Balance December 31, 2006	42,513,415		42,513		3,476,637		(4,784,453	)		(1,265,303	)
Net loss for the year ended December 31, 2007							(224,742	)		(206,075	)

Balance December 31, 2007	42,513,415	$	42,513	$	3,476,637	$	(5,009,195	)		(1,471,378	)

See accompanying notes to consolidated financial statements.

F-7

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE A - BUSINESS

The Company and Nature of Business

E Med Future, Inc. and Subsidiary (the “Company”), a development stage enterprise, was organized under the laws of Delaware on August 25, 2000. The Company plans to manufacture and sell a device that can disable a hypodermic needle trademarked under the name “NeedleZap.”

Reverse Merger

In April 2004, Micro-Economics, Inc., (“Micro”) , a Nevada corporation, acquired all of the Company’s outstanding convertible preferred stock by the issuance of 19,850,000 shares of $0.001 par value common stock (the “Merger”). Simultaneously, Micro-Economics, Inc. changed its name to E Med Future, Inc. In connection with the Merger, the Company became a wholly owned subsidiary of Micro and the Company’s officers and directors replaced Micro’s officers and directors. Prior to the Merger, Micro was a non-operating “Shell” corporation. Pursuant to Securities and Exchange Commission rules, the Merger of a private operating company (E Med Future, Inc.) into a non-operating public shell corporation with nominal net assets (Micro) is considered a capital transaction. Accordingly, for accounting purposes, the Merger has been treated as an acquisition of Micro by the Company and a recapitalization of the Company.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

The Loss due to inventory obsolescence, which was previously shown as a separate line, was been reclassified to be included in Cost of sales in the Statement of Operations

Cash and Cash Equivalents

The Company considers all highly-liquid investments, with a maturity of three months or less when purchased, to be cash equivalents.

Consolidated Financial Statements

The consolidated financial statements include the Company and its wholly owned subsidiary. All significant intercompany transactions and balances have been eliminated in consolidation.

Fair Values of Financial Instruments

The Company uses financial instruments in the normal course of business. The carrying values of cash, accounts receivable, inventory, bank overdrafts, accounts payable, accrued expenses, and customer deposits approximate their fair value due to the short-term maturities of these assets and liabilities. The carrying values of notes payable and convertible promissory note payable approximate their fair value based upon management’s estimates using the best available information.

F-8

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

Revenues are recorded at the time of shipment of merchandise to customers, which is the time that the price is fixed, title has been transferred, collection of the resulting receivable is reasonably assured and the Company has no significant obligations remaining to be performed. Certain goods are shipped to retailers on a consignment basis under which title and risk of ownership are not transferred to the retailer. Accordingly, sales are not recorded until a retail customer has purchased the goods from these retailers.

Net Loss Per Common Share

The Company computes per share amounts in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings per Share”. SFAS No. 128 requires presentation of basic and diluted EPS. Basic EPS is computed by dividing the income (loss) available to Common Stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of Common Stock and Common Stock equivalents outstanding during the periods.

Equipment and Depreciation

Equipment is stated at cost and is depreciated using the straight line method over the estimated useful lives of the respective assets. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that extend the useful life of the assets are capitalized. When equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in operations.

Patent Amortization

The Company amortizes its patent over a 15 year period.

Allowance for Doubtful Accounts

It is the Company’s policy to provide an allowance for doubtful accounts when it believes there is a potential for non-collectibility.

Inventories

Inventories are stated at the lower of cost or market value. Cost is determined using the first-in, first-out (FIFO) method.

Advertising Costs

Advertising costs are expensed in the period incurred.

Stock-Based Compensation

SFAS No. 123, “Accounting for Stock-Based Compensation,” prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123 requires employee compensation expense to be recorded (1) using the fair value method or (2) using the intrinsic value method as prescribed by accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB25”) and related interpretations with pro forma disclosure of what net income and earnings per share would have been had the Company adopted the fair value method. The Company accounts for employee stock based compensation in accordance with the provisions of APB 25. For non-employee options and warrants, the Company uses the fair value method as prescribed in SFAS 123.

F-9

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeded the fair value of the assets.

Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation 48, “Accounting for Income Tax Uncertainties” (“FIN 48”). FIN 48 defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority. Recently issued literature also provides guidance on the derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties. FIN 48 also includes guidance concerning accounting for income tax uncertainties in interim periods and increases the level of disclosures associated with any recorded income tax uncertainties. FIN 48 was effective for fiscal years beginning after December 15, 2006. The Company’s adoption of the provisions of FIN 48 did not have a material impact on its financial position, results of operations or liquidity.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value under other accounting pronouncements that permit or require fair value measurements, changes the methods used to measure fair value and expands disclosures about fair value measurements. In particular, disclosures are required to provide information on the extent to which fair value is used to measure assets and liabilities; the inputs used to develop measurements; and the effect of certain of the measurements on earnings (or changes in net assets). SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Early adoption, as of the beginning of an entity’s fiscal year, is also permitted, provided interim financial statements have not yet been issued. The Company expects to adopt the provisions of SFAS No. 157 beginning in the first quarter of 2008. The Company is currently evaluating the potential impact, if any, that the adoption of SFAS No. 157 will have on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 allows entities to measure at fair value many financial instruments and certain other assets and liabilities that are not otherwise required to be measured at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company has not determined what impact, if any, that adoption will have on our results of operations, cash flows or financial position.

In December 2007, the FASB issued SFAS No. 141R, Business Combinations . This standard establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. This statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS No.141R is effective for us for acquisitions made after November 30, 2009. The Company is currently evaluating the potential impact, if any, that the adoption of SFAS No. 141R will have on its consolidated financial statements.

F-10

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements (Continued)

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements . This standard outlines the accounting and reporting for ownership interest in a subsidiary held by parties other than the parent. SFAS No. 160 is effective for the first quarter of 2010. The Company is currently evaluating the potential impact, if any, that the adoption of SFAS No. 160 will have on its consolidated financial statements.

NOTE C - GOING CONCERN

As indicated in the accompanying financial statements, the Company incurred net losses of $224,742 and $319,861 for the years ended December 31, 2007 and 2006, respectively, and has a negative working capital of $951,135 an accumulated deficit of $5,009,195 at December 31, 2007, and is considered a company in the development stage. Management’s plans include the raising of capital through short term financing to fund future operations and the generating of revenue through its business. Failure to raise capital, keep its products and manufacturing facilities in FDA compliance, and generate sales revenues could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE D - ACQUISITION OF MEDICAL SAFETY TECHNOLOGIES, INC.

On December 30, 2003, the Company acquired 100% of the issued and outstanding stock of Medical Safety Technologies, Inc. (“MSTI”), a wholly owned subsidiary of UTEK corporation, a publicly-held technology transfer company, in exchange for 1,250,000 shares of the Company’s common stock. MSTI holds the license to a patented invention known as the Safe Receptacle for Sharps, designed to aid in the safe transport of sterile and used sharp medical instruments. The Company expects the Safe Receptacle for Sharps product to provide complimentary technology to its “NeedleZap” portable needle destruction device.

Allocation of the purchase price was as follows:


Value of 1,250,000 shares of common stock at $0.74 per share	$	925,000
Less: Write down of fair market value due to small market “float” and high market volatility of the Company’s stock		536,500

Adjusted purchase price at $0.3108 per share	$	388,500

Fair value of net assets allocated as follows:
Cash	$	200,000
License		188,500

	$	388,500

F-11

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE D - ACQUISITION OF MEDICAL SAFETY TECHNOLOGIES, INC. (Continued)

The agreement additionally requires minimum payments and royalties as follows:

(a)

A license fee payment of $13,000 within 30 days of the execution of the agreement,

(b)

3% of net sales of the licensed product,

(c)

50% of all payments received from sublicense fees, and

(d)

Minimum royalties as follows: first year - nothing; second year - $5,000; third year - $7,500; fourth year - $10,000; and fifth and subsequent years $15,000 until the end of the patent life.

In 2004, the Company determined that the license was impaired and accordingly it was written off to operations.

NOTE E - INVENTORY

Inventory consists of the following at December 31, 2007 and 2006:

NOTE F - EQUIPMENT

Equipment consists of the following at December 31, 2006 and 2005:


	Useful Life	2007			2006
Office equipment and vehicle	3-5 years	$	16,860		$	18,118
Less accumulated depreciation			(7,770	)		(6,956	)

		$	9,090		$	11,162

$2,075 and $2,954 of Depreciation expense is included in Depreciation and amortization on the statement of operations for the years ended December 31, 2007 and 2006, respectively.

NOTE G - IMPAIRMENT OF LONG LIVED ASSETS

Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets,” required the Company to test long lived assets for impairment when conditions arise which indicate that the carrying amount of long lived assets may not be recoverable. As such, the Company tested its long lived assets for impairment based upon the fact that the Company had current-period operating and cash flow losses combined with the Company’s history of operating and cash flow losses. In 2006, the Company determined that the Trademark acquired during the year was impaired and recognized an impairment loss for its carrying amount of $25,500.

NOTE H - SHORT TERM BORROWING

The Company has a $150,000 line of credit from a local bank of which $28,604 was available at December 31, 2007. The loan is secured by the assets of the Company and is personally guaranteed by three major shareholders of the Company. The current annual interest rate is 8.75%. The average annual borrowing rate approximated 8.75%. The balance due was $121,396 and $149,098 at December 31, 2007 and 2006, respectively.

F-12

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE H - SHORT TERM BORROWING (CONTINUED)

During 2004, the Company entered into a note payable to Ford Motor Credit payable in monthly installments of $198 including interest at 13.96%. The note is collateralized by transportation equipment. At December 31, 2007, the balance due was $1,089, all of which was current.

NOTE I - ROYALTY AGREEMENT

The Company has a royalty arrangement with NeedleZap General Partnership. The agreement requires a $5 royalty on each unit sold up to five million units regardless of how long it takes the Company to sell the units. Additionally, the Company has agreed to pay $1.00 per unit sold to be divided between two officers of the Company and the Director of Research and Development. This fee has been temporarily waived until the Company becomes profitable.

NOTE J - INCOME TAXES

The Company follows Financial Accounting Statement No. 109 (“SFAS No. 109”). Under this method, the Company recognizes a deferred tax liability or asset for temporary differences between the tax basis of an asset or liability and the related amount reported on the financial statements. The principal types of differences, which are measured at the current tax rates, are net operating loss carry forwards. At December 31, 2007 and 2006, these differences resulted in a deferred tax asset of approximately $797,000 and $730,787, respectively. SFAS No. 109 requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Since realization is not assured, the Company has recorded a valuation allowance for the entire deferred tax asset, and the accompanying financial statements do not reflect any net asset for deferred taxes at December 31, 2007 or 2006.

The Company’s net operating loss carry forwards amounted to approximately $2,490,000 at December 31, 2007 and will expire through 2022.

NOTE K - RELATED PARTY TRANSACTIONS

Accounts payable to related party represents amounts payable to a supplier owned by the former President of the Company. Additionally, a company owned by the former President provides warehouse and office space to the Company on a month to month basis at the rate of $1,800 per month. In August of 2005, the company owned by the former President stopped charging the Company rent. The amounts due to the related party at December 31, 2007 and 2006 are $39,216 and $41,369, respectively. The Company also owes $2,000 at December 31, 2007 to a law firm in which a former Director is a partner.

Notes payable to Related Party is a note payable to a Director of the Company. This note is non-interest bearing.

During the year ended December 31, 2002, an employee advanced the Company $215,585. The loan carried no interest and had no repayment terms. Had the Company borrowed such funding from a lending institution, the imputed interest would have been approximately $4,696 based on a five percent (5%) interest rate. During the year ended December 31, 2003, the Director of Research purchased this loan for stock of the Company which he held and advanced additional funds bringing the total funds advanced to $320,585. During the six months ended June 30, 2004, the loan accrued interest of $9,399 and the Company made payments against the principal and interest of $63,500. The net loan balance, including interest at June 30, 2004, of $266,484 was converted to 749,415 shares of the Company’s common stock at an average price of $0.356 per share.

F-13

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE L - STOCKHOLDERS’ DEFICIT

In March 2003, the shareholders approved an increase in the Company’s authorized shares of common stock from 25,000,000 to 50,000,000.

On April 1, 2003, the Company, in a reverse merger, issued 19,850,000 shares of its common stock in exchange for 3,970 preferred shares of the former E-Med Future, Inc. and subsidiary valued at $505,000.

On April 21, 2003, the Company issued 4,000,000 shares of its common stock to various consultants for prior services rendered. These shares were valued at a price of $0.15 per share and reflected as stock based compensation aggregating $600,000.

On June 12, 2003, the Company issued 34,000 shares of its common stock for services to be rendered during a 12 month period commencing June 12, 2004, under a Strategic Alliance Agreement with UTEK Corporation (“UTEK”), a publicly held technology transfer company, whereby UTEK will use its best efforts to identify new technologies that could be acquired by the Company. These shares were valued at a price of $0.90 per share.

On December 30, 2003, the Company issued 1,250,000 of its common stock to acquire 100% of the outstanding stock of Medical Safety Technologies, Inc. (“MSTI”), a wholly owned subsidiary of UTEK. MSTI holds the license to a patented invention known as Safe Receptacle for Sharps, designed to aid in the safe transport of sterile and used sharp instruments. These shares were valued at a discounted market price of $0.3108.On June 30, 2004, the Company issued 749,415 shares of its common stock at a price of $0.3556 per share as payment of a loan payable and accrued interest in the amount of $266,484.

On September 16, 2004, the Company issued 2,000,000 shares of its common stock for consulting services to be performed through September 2006. These shares were valued at $0.44 per share for a total value of $880,000 and recorded as prepaid compensation.

On November 5, 2004, the Company issued 300,000 freely trading shares of its common stock at $0.53 per share for a total value of $159,000 for consulting services.

On January 15, 2005, the Company issued 4,830,000 shares of its common stock, pursuant to a Form S-8 filing at a value of $0.39 per share for consulting services and employee and director compensation. Consulting expense was recorded in the amount of $1,883,700 for these services. In July 2005, the Company hired a qualified valuation consultant to perform a valuation of the company stock. Based on this valuation, the shares of stock were revalued at $0.13 per share and the consulting expense was adjusted to $627,900. 1,250,000 of these shares were returned to the Company. Consulting expense relating to this transaction has therefore been adjusted to $465,400.

On June 15, 2006, the Company issued 3,500,000 shares of its common stock to each of Ronald L. Alexander, a director of the Company, and Donald Sullivan, the Chief Financial Officer and Interim Chief Executive Officer and a director of the Company. All shares were issued at a price of $0.02 a share. The shares issued to Mr. Alexander were issued as consideration for amounts advanced by Mr. Alexander to the Company. The shares issued to Mr. Sullivan were issued as consideration for accrued, unpaid salary.

On June 15, 2006, the Company also issued 400,000 shares at $0.03 a share to settle accounts payable. The Company also issued 100,000 shares at $0.03 a share for services performed. As such, $3,000 in expense has been recorded within the Selling, general and administrative expenses within the Statement of Operations. Additionally, the Company issued 750,000 shares at $0.03 a share to acquire the remaining Trademark of Needlezap not already held in the name of the Company. $22,500 was initially recorded as a Trademark but was determined to be impaired and thus written off (See Note G).

F-14

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE L - STOCKHOLDERS’ DEFICIT (CONTINUED)

On July 10, 2006, the Company received $45,000 in exchange for 1,500,000 shares of common stock from a customer of the Company.

NOTE M - CONVERTIBLE PROMISSORY NOTE

On April 1, 2004, the Company entered into a convertible promissory note agreement with an individual to lend the Company up to $750,000 of which $90,000 was in cash for working capital with the balance to be advanced to suppliers for the purchase of inventory. The note bears interest at the rate of 7.5% payable quarterly and is secured by a UCC Financing Agreement covering all of the Company’s assets. The note, at the note holder’s option, can be converted into 1,500,000 shares of the Company’s common stock.

Additionally, the Company is obligated to make royalty payments as follows: On the first one million (1,000,000) units produced and sold after March 18, 2004, a payment of $3.00 per unit; on the second one million (1,000,000) units produced and sold, a payment of $2.00 per unit. Maximum aggregate royalty payments will be $5,000,000. Upon the option of the note holder to convert the note to 1,500,000 shares of the Company’s common stock, the lender would own approximately 5.555% of the Company’s issued and outstanding shares. The Company has agreed that, throughout the loan period, the note holder’s ownership interest will not be diluted through the issuance of additional stock warrants, options, convertible securities, preemption or other rights which may dilute the earning potential of the note holder’s shares. At December 31, 2007, the balance due on this note was $548,000. (See also Note S).

On November 22, 2006, Martin Management Services, Inc. (“Martin Management”) was appointed as receiver for the Company by the Franklin County, Ohio Common Pleas Court in the action filed on August 6, 2006 by Complete Investment Management, Ltd. (“CIM”). CIM has sought the repayment of a loan made by CIM to the Company in the amount of $548,000. The Company is in default in its payments to CIM due to declining revenue and cash flow. Martin Management has been operating the Company for the benefit of its creditors.

NOTE N - LICENSE AND DISTRIBUTION AGREEMENT

On September 6, 2004, the Company entered into a license and distribution agreement with ITDevelopment Solutions, Inc. (“ITD”), granting ITD the exclusive right to manufacture, distribute and sell the NeedleZap unit in Pakistan and the United Arab Emirates. ITD has completed construction of a new high-tech manufacturing facility in Pakistan that it expects will reduce the production cost of NeedleZap by 58%. ITD bears all the new costs of the new facility as part of the arrangements. In connection with the ITD arrangement, the Company entered into a two year consulting agreement with ITD president, Patrick Downs, in which Mr. Downs agreed to perform consulting service as an independent contractor. Pursuant to the term of the agreement, Mr. Downs will render advice and assistance with respect to the development of the Pakistan manufacturing facility and will receive 2,000,000 shares of the Company’s common stock as compensation for his services. The shares were valued at an average price of $0.44 per share of $880,000 and recorded as a prepaid consulting fee to be earned over a two year period.

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

In July 2005, the Company terminated its license and distribution agreement with ITD. The Company has been unable to recover the shares owned by Mr. Downs and wrote the unamortized prepaid consulting balance of $495,000 in 2005.

F-15

E MED FUTURE, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

NOTE Q - LEASE COMMITMENTS

In 2005, the Company entered a lease agreement which expired December 31, 2006. The lease has not been extended and the Company is operating on a month-to-month lease.

Total Rent expense was $6,600 and $6,949 for the years ended December 31, 2007 and 2006.

NOTE R - CONCENTRATION

Approximately 94% of the Company’s sales for the year ended December 31, 2007 were with three distributors. Approximately 94% of the Company’s sales for the year ended December 31, 2006 were with four distributors. Approximately 41% of the Company sales for the year ended December 31, 2006 were with a Company controlled by the former Director of Marketing of the Company.

F-16

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