Coro Global Inc. - FORM 10-Q - November 14, 2011

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10-Q 1 form10q.htm MEDEFILE INTERNATIONAL, INC FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2011
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
	For the transition period from to

Commission File Number33-25126-D

MedeFile International, Inc.

(Exact name of registrant as specified in its charter)

Nevada		85-0368333
State or other jurisdiction of		(I.R.S. Employer
incorporation or organization		Identification No.)

301 Yamato Rd, Ste 1200

Boca Raton, FL 33431

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (561) 912-3393

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

	Large accelerated filer	o		Accelerated filer	o
	Non-accelerated filer	o		Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Number of shares outstanding of registrant’s class of common stock, par value $0.0001 (the “Common Stock”) as of November 14, 2011: 3,911,383,852.

Explanatory Note

Medefile International, Inc. is not subject to the filing requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), and files reports with the SEC voluntarily. Medefile International, Inc. has filed all Exchange Act reports for the preceding 12 months.

Table of Contents

	Page
PART I

FINANCIAL INFORMATION
ITEM 1. Financial Statements	4-14
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	17
ITEM 4. Controls and Procedures	14

PART II

OTHER INFORMATION
ITEM 1. Legal Proceedings	18
ITEM 1A. Risk Factors	18
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	18
ITEM 3. Defaults Upon Senior Securities	18
ITEM 4. Reserved	18
ITEM 5. Other Information	18
ITEM 6. Exhibits	18
Signatures	19

MedeFile International, Inc.

Condensed Balance Sheets


	Unaudited
	September 30,			December 31,
Assets	2011			2010
Current assets
Cash	$	482,830		$	499,652
Accounts receivable, net		760			2,468
Inventory		53,977			22,184
Merchant services reserve		64,141			6,173
Prepaid Insurance		2,775			-
Total current assets		604,483			530,477
Website development, net of accumulated amortization		31,473			47,210
Furniture and equipment, net of accumulated depreciation		12,751			20,364
Intangibles		1,339			1,339
Total assets	$	650,046		$	599,390

Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities	$	232,630		$	310,325
Cash overdraft		-			6,928
Deferred revenues		7,051			9,575
Total Current Liabilities		239,681			326,828


Stockholders' Equity
Preferred stock, $.0001 par value: 10,000 authorized,
no shares issued and outstanding		-			-
Common stock, $.0001 par value: 5,000,000,000 authorized;
3,911,383,852 and 3,450,021,410 shares issued and outstanding on
September 30, 2011 and December 31, 2010, respectively		391,138			345,002
Common stock payable		24,000			-
Additional paid in capital		17,948,649			16,090,116
Accumulated deficit		(17,953,422	)		(16,162,556	)
Total stockholders' equity		410,365			272,562
Total liability and stockholders' equity	$	650,046		$	599,390

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

MedeFile International, Inc.

Condensed Statements of Operations

(unaudited)


	For the Three			For the Three			For the Nine			For the Nine
	Months			Months			Months			Months
	Ended			Ended			Ended			Ended
	September 30,			September 30,			September 30,			September 30,
	2011			2010			2011			2010
Revenue	$	83,802		$	43,903		$	403,644		$	50,505

Cost of goods sold		9,838			-			163,579			-
Gross profit		73,964			43,903			240,065			50,505

Operating expenses
Selling, general and administrative expenses		675,015			330,863			1,496,220			511,172
Marketing expense		70,641			-			511,362			-
Depreciation and amortization expense		7,745			8,109			23,349			21,801
Total operating expenses		753,401			338,972			2,030,931			532,973

Loss from operations		(679,437	)		(295,069	)		(1,790,866	)		(482,468	)

Other expenses
Interest expense - note payable		-			-			-			(10,166	)
Interest expense - related party note payable		-			-			-			(1,219,633	)
Total other expenses		-			-			-			(1,229,799	)

Loss before income tax		(679,437	)		(295,069	)		(1,790,866	)		(1,712,267	)
Provision for income tax		-			-			-			-
Net Loss	$	(679,437	)	$	(295,069	)	$	(1,790,866	)	$	(1,712,267	)

Net loss per share: basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average share outstanding		3,888,216,666			1,978,131,704			3,642,641,183			1,009,955,771
basic and diluted

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

MedeFile International, Inc.

Consdensed Statements of Cash Flows

(unaudited)


	For the			For the
	Nine			Nine
	Months			Months
	Ended			Ended
	September 30,			September 30,
	2011			2010
Cash flows from operating activities
Net loss	$	(1,790,866	)	$	(1,712,267	)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation		7,613			11,310
Amortization		15,737			10,492
Stock based services		172,731			65,000
Warrant expense		377,938			-
Interest expense		-			10,166
Interest expense - related party		-			1,219,633
Changes in operating assets and liabilities
Accounts receivable		1,708			(3,017	)
Inventory		(31,793	)		(82,325	)
Merchant services reserve		(57,968	)		-
Prepaid Insurance		(2,775	)		-
Deposits and other assets		-			12,115
Accounts payable and accrued liabilities		38,305			(57,746	)
Cash overdraft		(6,928	)		(862	)
Deferred revenue		(2,524	)		9,256
Net Cash used in operating activities		(1,278,822	)		(518,245	)
Cash flows from investing activities
Website development		-			(21,800	)
Net cash used in investing activities		-			(21,800	)
Cash flow from financing activities
Proceeds from common stock subscription		24,000			1,000,000
Proceeds from common stock sale		1,238,000			-
Proceeds from note payable		-			340,842
Net cash provided by financing activities		1,262,000			1,340,842
Net increase (decrease) in cash and cash equivalents		(16,822	)		800,797
Cash and cash equivalents at beginning of period		499,652			1,513
Cash and cash equvalents at end of period	$	482,830		$	802,310
Supplemental disclosure of cash flow information
Cash paid during period for
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
Cancellation of payroll liability to CEO	$	116,000		$	-
Conversion of note payable and accrued interest	$	-		$	900,000

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

MedeFile International, Inc.

Notes to Condensed Financial Statements

(Unaudited)

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of MedeFile International, Inc., a Nevada corporation (the "Company" or “Medefile”), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company's Form 10-K for the fiscal year ended December 31, 2010. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of September 30, 2011, and the results of operations and cash flows for the three and nine months ended September 30, 2011 and 2010. The results of operations for the three and nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Nature of Business Operations

MedeFile International, Inc. has developed and globally markets a proprietary, patient-centric, Internet-enabled Personal Health Record (iPHR) system for gathering, digitizing, maintaining, accessing and sharing an individual’s actual medical records. MedeFile's goal is to revolutionize the medical industry by bringing patient-centric digital technology to the business of medicine. MedeFile intends to accomplish its objective by providing individuals with a simple and secure way to access their lifetime of actual medical records in an efficient and cost-effective manner. MedeFile's products and services are designed to provide healthcare providers with the ability to reference their patient's actual past medical records, thereby ensuring the most accurate treatment and services possible while simultaneously reducing redundant procedures.

Interoperable with most electronic medical record systems utilized by physician practices, clinics, hospitals and other care providers, the highly secure, feature-rich MedeFile iPHR solution has been designed to gather all of its members’ actual medical records on behalf of each member, and create a single, comprehensive Electronic Health Record (EHR). The member can access his/her records 24-hours a day, seven days a week – or authorize a third party user – on any web-enabled device (PC, smartphone, PDA, e-reader, et al), as well as the portable MedeFile flash drive/keychain or branded UBS-bracelet.

By subscribing to the MedeFile system, not only do members empower themselves to take control of their own health and well-being, they empower their healthcare providers to make sound and lifesaving decisions with the most accurate, up-to-date medical information available. In addition, with MedeFile, members enjoy the peace of mind that comes from knowing that their medical records are protected from fire, natural disaster, document misplacement or the closing of a medical or dental practice.

MedeFile believes it enjoys a number of competitive advantages over other firms within the medical records marketplace, including:

●	MedeFile has developed products and services geared to the patient, while containing the depth and breadth of information required by treating physicians and medical personnel.
●	MedeFile does all the work of collecting and updating medical information on an ongoing basis; its dependence on the patient taking action is minimal – particularly when compared to patient action required to support competing solutions.

●	MedeFile provides a complete medical record. Other companies claim complete longitudinal records, but in reality only provide histories (usually completed by the member/patient), and are by no means complete or necessarily accurate records.
●	MedeFile provides a coherent mix of services and products that are intended to affect the quality of healthcare by enabling the patient to manage and access the information normally retained by doctors and other care providers.

Going Concern

The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company has reported a net loss of $1,790,866 for the nine months ended September 30, 2011 and $2,492,310 for the year ended December 31, 2010 and had an accumulated deficit of $17,953,422 as of September 30, 2011. The Company had net working capital of $364,802 as of September 30, 2011.

Cash and Cash Equivalents

For purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. Currently our operating account is above the FDIC limit.

Advertising

The Company follows the policy of charging the costs of advertising to expense as incurred. The Company incurred advertising costs for the three months ended September 30, 2011 and 2010 of approximately $0 and $0 respectively. The Company incurred advertising costs for the nine months ended September 30, 2011 and 2010 of approximately $6,500 and $2,568 respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Property and Equipment

Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years up to 10 years.

Trademark Costs

Trademark costs incurred in the registration and acquisition of trademarks and trademark rights are capitalized. These costs will be amortized over the legal life of the related trademark once the trademark is awarded. The Company performs an annual review of its identified intangible assets to determine if facts and circumstances exist which indicate that the useful life is shorter than originally estimated or that the carrying amount of the assets may not be recoverable.

The Company expenses all software costs associated with the conceptual formulation and evaluation of alternatives until the application development stage has been reached. Costs to improve or support the technology are expensed as these costs are incurred.

Website Development

The Company's policy is to capitalize website development costs at original cost and amortize the balance over the life of the product. The life of website is determined at completion of the project. The Company reviews the amounts capitalized for impairment whenever events or circumstances indicate that the carrying amounts of the assets may not be recoverable.

The Company expenses all development costs associated with the conceptual formulation and evaluation of alternatives until the application development stage has been reached. Costs to improve or support the technology are expensed as these costs are incurred.

Revenue Recognition

The Company generates revenue from licensing the right to utilize its proprietary software for the storage and distribution of healthcare information to individuals and affinity groups. For revenue from product sales, the Company recognizes revenue on four basic criteria which must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

Deferred Revenue

The Company generally receives subscription fees for its services. From time to time, the Company will receive quarterly or annual subscriptions paid in advance and deferred revenue is recorded at that time. The deferred revenue is amortized into revenue on a pro- rata basis each month. Customers with quarterly or annual subscriptions may cancel their subscriptions and request a refund for future months' revenues at any time. Therefore, a liability is recorded to reflect the amounts that are potentially refundable. At September 30, 2011 the amount of $7,051 was in deferred revenue.

Reclassifications

Certain reclassifications have been made in prior periods financial statements to conform to classifications used in the current period.

Recent Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06: Fair Value Measurements and Disclosures (topic 820) Improving Disclosures about Fair Value Measurements.. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU, however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In July 2010, the FASB issued ASU No. 2010-20:, Receivables (Topic 310) Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The ASU amends FASB Accounting Standards Codification Topic 310, Receivables, to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate, by portfolio segment or class of financing receivables, certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. This ASU is effective for interim and annual reporting periods ending on or after December 15, 2010. The adoption of this standard may require additional disclosures, but we do not expect the adoption to have a material effect on our consolidated financial statements.

On December 21, 2010, the FASB issued ASU 2010-29: Business Combinations (Topic 805) which impacts any public entity that enters into business combinations that are material on an individual or aggregate basis. The guidance specifies that if a public entity presents comparative financial statements, the entity should disclose revenues and earnings of the combined entity as though the business combination(s) that occurred during the year had occurred at the beginning of the prior annual period when preparing the pro forma financial information for both the current and prior reporting periods. The guidance also requires that pro forma disclosures be accompanied by a narrative description regarding the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in reported pro forma revenues and earnings. This guidance is effective for business combinations consummated in periods beginning after December 15, 2010. We do not believe the adoption of this guidance will have a material impact on our Consolidated Financial Statements

In April 2011, FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. The Company does not expect that the guidance effective in future periods will have a material impact on its consolidated financial statements.

In May 2011, FASB issued ASU 2011-04 “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The amendments in this update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the Board does not intend for the amendments in this update to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the Board’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. For public entities, the new guideline is effective for interim and annual periods beginning after December 15, 2011 and should be applied prospectively. The Company does not expect that the guidance effective in future periods will have a material impact on its consolidated financial statements.

Net Loss per Share

Basic and diluted loss per share amounts are computed based on net loss divided by the weighted average number of common shares outstanding. Outstanding options to purchase 5,640,000 common shares, warrants to purchase of 145,175,000 common shares were not included in the computation of diluted loss per share because the assumed conversion and exercise would be anti-dilutive for the nine months ended September 30, 2011.

Management Estimates

The presentation of financial statements in conformity with generally accepted accounting principles 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 reported period. Actual results could differ from those estimates.

Stock-Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement

2. ACCOUNTS RECEIVABLE

Due to the collection history of the Company, an allowance for doubtful accounts is not maintained. Recognition of a specific uncollectible account is written directly against the invoice in accounts receivable and expensed in the current period.

3. WEBSITE DEVELOPMENT

Website development consists of the following:

	September 30, 2011			December 31, 2010
Website development	$	62,945		$	62,946
Accumulated amortization		(31,472	)		(15,736	)
Net website development	$	31,473		$	47,210

Amortization is calculated over a three-year period beginning in the second quarter of 2010. Amortization expense for the three- months ending September 30, 2011 and 2010 is $5,245 and $5,245, respectively. Amortization expense for the nine months ending September 30, 2011 and 2010 is $15,736 and $10,492 respectively.

4. FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

	June 30, 2011			December 31, 2010
Computers and equipment	$	169,286		$	169,286
Furniture and fixtures		38,618			38,618
Subtotal		207,904			207,904
Less: accumulated depreciation		(195,153	)		(187,540	)
Net furniture and equipment	$	12,751		$	20,364

Depreciation is calculated by using the straight-line method over the estimated useful life. Depreciation expense totaled $2,500 and $2,864 for the three months ended September 30, 2011 and 2010, respectively. Depreciation expense totaled $7,613 and $11,310 for the nine months ended September 30, 2011 and 2010, respectively.

5. EQUITY

Common Stock

On May 24, 2010, Lyle Hauser, the son of the Company's then Chief Executive Officer, agreed to convert notes in the aggregate principal amount of $900,000 into an aggregate of 450,000,000 shares of the Company's common stock. As of June 30, 2010, the conversion to common shares had not occurred. The amount to be converted is reported in Common Stock Payable on the balance sheet. The shares were issued on July 20, 2010.

In June 2010, the Company accepted an agreement for an aggregate of 1,000,000,000 shares of its common stock for a per share purchase price of $0.001 per share (the “June Private Placement”). The Company received aggregate proceeds of $1,000,000 from its June Private Placement Agreement. The shares were unissued as of June 30, 2010 and are recorded through Common Stock Payable. The shares were issued July 20, 2010.

During the first quarter 2011, the Company entered into a Securities Purchase Agreement for the sale of 201,000,000 shares of common stock at a purchase price of $0.003 per share. Total proceeds from the sale of the stock totaled $603,000.

On March 31, 2011, the Company issued 9,375,000 shares of common stock for amounts due to consultant. The shares had a market value of $37,500.

On April 29, 2011, the Company issued 7,653,061 shares of common stock for amounts due to a consultant. The shares had a market value of $32,143.

On May 11, 2011, the Company issued 10,000,000 shares of common stock for amounts due to consultants. The shares had a market value of $70,000.

During the first quarter 2011, the Company entered into a Securities Purchase Agreement for the sale of 45,000,000 shares of common stock at a purchase price of $0.003 per share. The funds were received during the first quarter of 2011 and recorded as a stock payable in the amount of $135,000 as of June 30, 2011. On July 8, 2011, 45,000,000 shares of common stock were issued.

On June 3, 2011, the Company received $24,000 from proceeds from a Securities Purchase Agreement for the purchase of 8,000,000 shares of common stock. The stock is currently unissued and $24,000 is recorded as a stock payable.

During the third quarter of 2011, the Company entered into a Securities Purchase Agreement pursuant to which the Company sold 177,304,960 shares of common stock at a purchase price of $0.00282 per share.

On August 1, 2011, the Company issued 11,029,421 shares of common stock for amounts due to consultant. The shares had a market value of $33,088.

Stock Options

2006 Incentive Stock Plan

In January 2006, the Board of Directors of the Company approved an Incentive Stock Plan, pursuant to which they have initially reserved 10,000,000 shares of common Stock for issuance. Under the 2006 Incentive Stock, the Board has granted an aggregate of 5,640,000 options to employees pursuant to certain employment agreement that are more fully described below:

2008 Amended and Restated Incentive Stock Plan

In November 2008, our Board of Directors adopted the 2008 Equity Incentive Plan and subsequently amended it in January 2009, June 2009 and July 2009 (the “2008 Plan”). The purpose of the 2008 Plan was to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. Under the 2008 Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified stock options, stock appreciation rights, performance shares, restricted stock and long term incentive awards. The 2008 Plan will be administered by our Board of Directors until such time as such authority has been delegated to a committee of the board of directors.

2010 Incentive Stock Plan

In December 2009, our Board of Directors adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The purpose of the 2010 Plan was to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. Under the 2010 Plan, we are authorized to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified stock options, stock appreciation rights, performance shares, restricted stock and long term incentive awards. The 2010 Plan will be administered by our Board of Directors until such time as such authority has been delegated to a committee of the Board of Directors.

A summary of option activity under all Plans as of September 30, 2010, and changes during the period then ended are presented below:

	Options		Weighted-Average Exercise Price
Outstanding at December 31, 2009		5,640,000	$	0.80
Issued		-		-
Exercised		-		-
Forfeited or expired		-		-
Outstanding at December 31, 2010		5,640,000	$	0.80
Issued		-		-
Expired		-		-
Forfeited		-		-
Outstanding at September 30, 2011		5,640,000		0.80
Non-vested at September 30, 2011		-		-
Exercisable at September 30, 2011		5,640,000	$	0.80

The options outstanding as of September 30, 2011 have been segregated for additional disclosure as follows:

Options Outstanding			Options Exercisable
			Weighted
		Weighted	Average		Weighted
Range of		Average	Remaining		Average
Exercise	Number	Exercise	Contractual	Number	Exercise
Price	Outstanding	Price	Life	Exercisable	Price
$0.80	5,640,000	$ 0.80	.25	5,640,000	$ 0.80

Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. For the three and nine months ended September 30, 2011 and 2010, the Company recorded no compensation expense related to options.

Warrants

The Company awarded 175,000 Common Stock warrants, at an exercise price of $0.56 per share, to former Board members at the quoted stock price on the effective date of the awards. The warrants have an expiration date of five years from the issue date and contain provisions for a cash exercise. The estimated value of the compensatory warrants granted to non-employees in exchange for services and financing expenses was determined using the Black-Scholes pricing model and the following assumptions:

Risk-free interest rate at grant date	4.75	%
Expected stock price volatility	155	%
Expected dividend payout	--
Expected option in life-years	5

On June 22, 2011, the Company awarded 10,000,000 Common Stock warrants, at an exercise price of $0.01 per share, to consultants for services at the quoted stock price on the effective date of the awards. The warrants have an expiration date of four years from the issue date and contain provisions for a cash exercise. The estimated value of the compensatory warrants granted to non-employees in exchange for services and financing expenses was determined using the Black-Scholes pricing model and the following assumptions listed below.

On July 28, 2011, the Company awarded 135,000,000 Common Stock warrants at an exercise price of $0.005 per share to consultants for services at the quoted stock price on the effective date of the awards. The warrants have an expiration date of three years from the issue date and contain provisions for a cash exercise. The estimated value of the compensatory warrants granted to non-employees in exchange for services was determined using the Black-Scholes pricing model and the assumptions listed below.

Risk-free interest rate at grant date	0.39	%
Expected stock price volatility	172.1	%
Expected dividend payout	--
Expected option in life-years	4

Warrant expense was recognized for the nine months ended September 30, 2011 was $377,938.

Transactions involving warrants are summarized as follows:

	Number of Warrants		Weighted-Average Price Per Share
Outstanding at December 31, 2010		8,125,000	$	.73
Granted		145,000,000		.01
Exercised		-		-
Canceled or expired		7,950,000		-
Outstanding at September 30, 2011		145,175,000	$	0.019

Warrants Outstanding							Warrants Exercisable
					Weighted						Weighted
					Average		Weighted				Average
					Remaining		Average				Remaining
Exercise			Number		Contractual		Exercise		Number		Contractual
Prices			Outstanding		Life (years)		Price		Exercisable		Life (years)
	$	0.56		175,000		1.5	$	0.56		175,000		1.5
		0.005		135,000,000		3.0		0.005		135,000,000		3.0
		0.01		10,000,000		3.75		0.01		10,000,000		3.75
				145,175,000		3.05	$	0.56		145,175,000		3.05

6. RELATED PARTY TRANSACTIONS

On May 10, 2011,the Company and the Company’s Chief Executive Officer, Kevin Hauser, executed an amendment, effective as of March 26, 2011, to the Employment Agreement, dated December 10, 2008, by and between Mr. Hauser and the Company. Mr. Hauser agreed to reduce the base salary payable to him pursuant to the Employment Agreement to $100,000 for the year ending December 31, 2010. As a result, the Company recorded a cancellation of payroll expense due to Mr. Hauser during the first quarter of 2010 through additional paid in capital in the amount of $116,000.

7. SUBSEQUENT EVENTS

There are no significant subsequent events.

Item 2. Management's Discussion and Analysis

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

It should be noted that this Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain "forward-looking statements." The terms "believe," "anticipate," "intend," "goal," "expect," and similar expressions may identify forward-looking statements. These forward-looking statements represent the Company's current expectations or beliefs concerning future events. The matters covered by these statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including the Company's dependence on product introduction and customer acceptance of new products, the impact of competition and price erosion, as well as other risks and uncertainties. The foregoing list should not be construed as exhaustive, and the Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events, except as may be required under applicable securities law. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation that the strategy, objectives or other plans of the Company will be achieved. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. More information about potential factors that could affect our business and financial results is included in the section entitled "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission on April 1, 2011. The following discussion should be read in conjunction with our consolidated financial statements provided in this quarterly report on Form 10-Q.

Organizational History

On November 1, 2005, Bio-Solutions International, Inc. ("Bio-Solutions") entered into an Agreement and Plan of Merger (the "Agreement") with OmniMed Acquisition Corp., (the "Acquirer), a Nevada corporation and a wholly owned subsidiary of Bio-Solutions, OmniMed International, Inc., a Nevada corporation ("OmniMed"), and the shareholders of OmniMed (the "OmniMed Shareholders"). Pursuant to the Agreement, Bio-Solutions acquired all of the outstanding equity stock of OmniMed from the OmniMed Shareholders. As consideration for the acquisition of OmniMed, Bio-Solutions agreed to issue 9,894,900 shares of Bio-Solutions' common stock to the OmniMed Shareholders. These issuances were deemed to be exempt under rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended since, among other things, the transaction did not involve a public offering, the investors were accredited investors and/or qualified institutional buyers, the investors had access to information about the company and their investment, the investors took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.

As a result of the Agreement, the OmniMed Shareholders assumed control of Bio-Solutions. Effective November 21, 2005 Bio-Solutions changed its name to OmniMed International, Inc. Effective January 17, 2006 OmniMed changed its name to MedeFile International, Inc. ("MedeFile" , the "Company", “we”, “us” or “our”).

Website Development

The Company has completed an extensive redesign of its website. The site has been rebranded and made ready for search engine optimization (SEO). During development, the Company used feedback from focus groups to make the site user friendly, intuitive and easy to use. In addition, improvements have been made to help support direct response campaigns.

RESULTS OF OPERATIONS

THREE-MONTHS ENDING SEPTEMBER 30, 2011 COMPARED TO THREE MONTHS ENDING SEPTEMBER 30, 2010

Revenues

Revenues for the quarter ended September 30, 2011 totaled $83,802 compared to revenues of $43,903 during the quarter ended September 30, 2010. The increase in membership revenue is primarily related to an increase in the amount of members and medical record reimbursement revenue received from members. Medical record reimbursement revenue is a dollar for dollar reimbursement for charges from members’ doctors for sending updated medical records to MedeFile. The off-setting expense is charged to selling general and administrative expense. The Company has increased its marketing and advertising efforts; as a result, there has been a substantial increase in memberships over the previous period. Revenues received from memberships are recognized through the period of the membership, and, therefore, revenue recognized represents a fraction of the membership in the quarter being reported.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the quarter ended September 30, 2011 totaled $675,015 an increase of $344,152 or approximately 104.021% compared to selling, general and administrative expenses of $330,863 for the quarter ended September 30, 2010. The overall increase in the total selling, general and administrative is primarily due to increased costs associated with attracting new members, sales and business development expenses.

Marketing Expense

Marketing expense for the quarter ended September 30, 2011 totaled $70,641, compared to $0 for the quarter ending September 30, 2010. The increased marketing expense was due to more aggressive lead generation for new members. The Company relies on one source for generation of leads through the Company’s telemarketing efforts to increase revenues.

Depreciation Expense

Depreciation expense totaled $2,500 for the quarter ended September 30 2011, compared to depreciation expense of $2,864 during the quarter ended September 30, 2010. The decrease in depreciation was due to some assets being fully depreciated.

Amortization Expense

Amortization expense for the quarter ended September 30, 2011 totaled $5,245, compared to $5,245 for the quarter ended September 30, 2010. Amortization expense is the expensing of the website development through May 2013. Amortization began in the second quarter of 2010 and is expensed at $5,245 per quarter over a three-year period.

Interest Expense

Net interest expense for the quarter ended September30, 2011 was $0, compared to interest expense of $0 during the quarter ended September 30, 2010.

Net Loss

For the reasons stated above, our net loss for quarter ended September 30, 20111 was $679,437 or $0 per share, a decrease of $384,368, compared to a net loss of $295,069, or $0 per share, during the quarter ended September 30, 2010.

NINE-MONTHS ENDING SEPTEMBER 30, 2011 COMPARED TO NINE-MONTHS ENDING SEPTEMBER 30, 2010

Revenues

Revenues for the nine-months ended September 30, 2011 totaled $403,644, compared to revenues of $50,505 during the nine-months ended September 30, 2010. The increase in membership revenue is primarily related to an increase in the amount of members and medical record reimbursement revenue received from members. Medical record reimbursement revenue is a dollar for dollar reimbursement for charges from member’s doctors for sending updated medical records to MedeFile. The off-setting expense is charged to selling general and administrative expense. The Company has increased its marketing and advertising efforts, and as a result there has been a substantial increase in memberships over the previous period. Revenues received from memberships are expensed through the period of the membership, and, therefore, revenue recognized represents a fraction of the membership in the quarter being reported.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine months ended September 30, 2011 totaled $1,496,220 an increase of $985,048 or approximately 192.7%, compared to selling, general and administrative expenses of $511,172 for the nine months ended September 30, 2010. The overall increase in the total selling, general and administrative expenses is primarily due to increased costs associated with attracting new members, sales and business development expenses.

Marketing Expense

Marketing expense for the nine-months ended September 30, 2011 totaled $511,362, compared to $0 for the nine-months ending September 30, 2010. The increased marketing expense was due to more aggressive lead generation for new members. The Company relies on one source for generation of leads through the Company’s telemarketing efforts to increase revenues.

Depreciation Expense

Depreciation expense totaled $7,613 for the nine-months ended September 30 2011, compared to depreciation expense of $11,310 during the nine-months ended September 30, 2010. The decrease in depreciation was due to some assets being fully depreciated.

Amortization Expense

Amortization expense for the nine-months ended September 30, 2011 totaled $15,737, compared to $10,490 for the nine-months ended September 30, 2010. Amortization expense is the expensing of website development through May 2013. Amortization began in the second quarter of 2010 and is expensed at $5,245 per quarter over a three-year period.

Interest Expense

Net interest expense for the nine months ended September 30, 2011 was $0, a decrease of $1,229,799 as compared to interest expense of $1,229,799 during the nine months ended September 30, 2010. The decrease was due to the Company paying off their debt obligations during the second quarter of 2010.

Net Loss

For the reasons stated above, our net loss for the nine-months ended September 30, 2011 was $1,790,866, or $0.00 per share, a decrease of $78,599, compared to a net loss of $1,712,267, or $0.00 per share, during the nine-months ended September 30, 2010.

FINANCIAL CONDITION

Liquidity and Capital Resources

As of September 30, 2011, we had cash and cash equivalents of $482,830; inventory of $53,977; merchant services reserve of $64,141; accounts receivable of $760 and prepaid insurance of 2,775. Net cash used in operating activities for the nine months ended September 30, 2011 was approximately $1,278,822. Current liabilities of $239,681 consisted of $232,630 for accounts payable and accrued liabilities and deferred revenues of $7,051. We have a net working capital of $364,802.

The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. The Company has reported a net loss of $1,790,866 for the nine months ended September 30, 2011 and $2,492,310 for the year ended December 31, 2010 and had an accumulated deficit of $17,953,422 as of September 30, 2011. The Company has a net working capital of $364,802 as of September 30, 2011.

The Company currently estimates that it will require approximately $480,000 to continue its operations for the next twelve months. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements as of September 30, 2011 or as of the date of this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a Smaller Reporting Company as defined Rule 12b-2 of the Exchange Act and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 3.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this Quarterly Report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer (Principal Executive and Financial Officer); of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer (Principal Executive and Financial Officer) concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and which also are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer (Principal Executive and Financial Officer), to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2011, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) ) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company may become involved in litigation relating to claims arising out of its operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on the Company.

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4.

Reserved

Item 5. Other Information

None.

Item 6. Exhibits

(a) Pursuant to Rule 601 of Regulation S-K, the following exhibits are included herein or incorporated by reference.

	31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.

	32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-101.INS	XBRL INSTANCE DOCUMENT

EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT

EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

EX-101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

EX-101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE

EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

* Filed herewith.

SIGNATURES

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

	MEDEFILE INTERNATIONAL, INC.

November 14, 2011	By:	/s/ Kevin Hauser
		Kevin Hauser
		President, Chief Executive Officer, Acting Chief Financial Officer and Director (Principal Executive Officer and Principal Financial Officer)

Coro Global Inc. - FORM 10-Q - November 14, 2011

Attached files

Coro Global Inc. Reports