Coro Global Inc. - FORM 10-Q/A

Attached files

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EX-31.1 - CERTIFICATION - Coro Global Inc.	f10q0615a1ex31i_medefile.htm
EX-32.1 - CERTIFICATION - Coro Global Inc.	f10q0615a1ex32i_medefile.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Amendment No. 1)

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________

Commission File Number 033-25126-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, Suite 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 ☐ No

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). ☒ Yes ☐ 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	☐		Accelerated filer	☐
	Non-accelerated filer	☐		Smaller reporting company	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares outstanding of registrant’s common stock, par value $0.0001: 28,653,873 as of August 11, 2015.

Explanatory Note

This Amendment No. 1 to Form 10-Q for the period ended June 30, 2015, amends our Quarterly Report on Form 10-Q for the period ended June 30, 2015, which was originally filed with the Securities and Exchange Commission on August 12, 2012 (the “Original 10-Q”) This amendment is being filed solely to restate the financial statements as of and for the quarter ended June 30, 2015 and the six months ended June 30, 2015 for a failure to properly account for the derivative liability on a convertible note. Except with respect to the financial statements, and corresponding changes to Management’s Discussion and Analysis of Financial Condition and Financial Statement and Note of Operations, the Original 10-Q has not been amended, updated or otherwise modified.

Table of Content

	Page
PART I - FINANCIAL INFORMATION	4

ITEM 1. Financial Statements	4
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	26
ITEM 4. Controls and Procedures	26

PART II - OTHER INFORMATION
	26
ITEM 1. Legal Proceedings
ITEM 1A. Risk Factors	26
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	26
ITEM 3. Defaults Upon Senior Securities	26
ITEM 4. Mine Safety Disclosures	26
ITEM 5. Other Information	26
ITEM 6. Exhibits	27
Signatures	28

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Medefile International, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

	June 30,			December 31,
	2015			2014
	(Restated)
Assets
Current assets
Cash	$	290,804		$	36,170
Accounts receivable		3,926			5,425
Inventory		22,816			23,412
Merchant services reserve		2,938			2,939
Prepaid expense		-			5,709
Total current assets		320,484			73,655

Website development, net of accumulated amortization		221,494			265,792
Furniture and equipment, net of accumulated depreciation		-			-
Total assets	$	541,978		$	339,447

Liabilities and Stockholders' (Deficit)
Current Liabilities
Accounts payable and accrued liabilities	$	48,298		$	47,697
Convertible debenture		14,931			122,538
Deferred revenues		902			684
Derivative liability - convertible debenture		3,030			-
Derivative liability - warrants		-			51
Total Current Liabilities		67,161			170,970

Stockholders' (Deficit)
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding		-			-
Common stock, $.0001 par value: 700,000,000 authorized; 572,953,672 and 225,836,554 shares issued and outstanding on June 30, 2015 and December 31, 2014, respectively		57,295			22,583
Additional paid in capital		28,166,805			27,430,517
Common stock to be issued		69,920			69,920
Accumulated deficit		(27,819,203	)		(27,354,543	)
Total stockholders' (deficit)		474,817			168,477
Total liability and stockholders'(deficit)	$	541,978		$	339,447

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

Medefile International, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

	For the			For the			For the			For the
	three months			three months			six months			six months
	ended			ended			ended			ended
	June 30,			June 30,			June 30,			June 30,
	2015			2014			2015			2014
	(Restated)						(Restated)
Revenue		12,742			26,536			25,330			42,468
Cost of goods sold		279			301			595			581

Gross profit		12,463			26,235			24,735			41,887

Operating expenses
Selling, general and administrative expenses		274,118			127,078			439,724			300,723
Depreciation and amortization expenses		22,149			307			44,299			412
Total operating expenses		296,267			127,385			484,023			301,135

Loss from operations		(283,804	)		(101,150	)		(459,288	)		(259,248	)

Other income (expenses)
Interest expense - convertible note		(352	)		(2,836	)		(2,393	)		(5,573	)
Interest expense - discount on convertible note		-			(27,424	)		-			(54,548	)
Change of derivative liabilities - convertible debenture		30,213			-			(3,030	)		-
Change of derivative liabilities - warrants		-			103,264			51			1,052,121
Total other income (expense)		29,861			73,004			(5,372	)		992,000

Gain (loss) before income tax		(253,943	)		(28,146	)		(464,660	)		732,752
Provision for income tax
Net income (loss)	$	(253,943	)	$	(28,146	)	$	(464,660	)	$	732,752

Net loss per share: basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	0.01

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

Weighted average share outstanding: basic		275,365,725			67,162,073			409,742,460			85,691,810

Weighted average share outstanding: diluted		275,552,363			67,422,312			409,929,098			85,952,049

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

Medefile International, Inc.

Consolidated Statement of Stockholders' Equity

	Preferred				Common Stock							Common
	Shares		Par		Shares		Par					Stock		Accumulated
	Outstanding		Amount		Outstanding		Amount		APIC			Payable		Deficit			Total
Balance December 31, 2012		-	$	-		11,413,189	$	1,141	$	23,886,499		$	-	$	(29,123,348	)	$	(5,235,708	)

Common stock sale						17,421,429		1,742		913,258								915,000
Adjustment to derivative liability										2,190,460								2,190,460
Convertible debenture discount										110,000								110,000
Common stock issued for anti-dilution						11,872,281		1,187		(1,187	)							-
Common stock payable													69,920					69,920
Net income															1,427,251			1,427,251
Balance December 31, 2013		-		-		40,706,899		4,070		27,099,030			69,920		(27,696,097	)		(523,077	)

Common stock issued for anti-dilution						150,129,655		15,013		(15,013	)							-
Common stock sale						35,000,000		3,500		346,500								350,000

Net Income															341,554			341,554
Balance December 31, 2014		-	$	-		225,836,554	$	22,583	$	27,430,517		$	69,920	$	(27,354,543	)	$	168,477

Sale of common stock						279,099,100		27,910		592,090								620,000
Stock based compensation						50,000,000		5,000		106,000								111,000
Stock issued for debt conversion						18,018,018		1,802		38,198								40,000

Net income															(464,660	)		(464,660	)
Balance June 30, 2015 (Restated)		-	$	-		572,953,672	$	57,295	$	28,166,805		$	69,920	$	(27,819,203	)	$	474,817

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

Medefile International, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	For the			For the
	six months			six months
	ended			ended
	June 30,			June 30,
	2015			2014
	(Restated)
Cash flows from operating activities
Net income	$	(464,660	)	$	732,752
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			412
Amortization		44,299			-
Interest expense - discount on convertible debenture		-			54,548
Stock based compensation		111,000			-
Change in derivative liability - convertible debenture		3,030			-
(Gain) loss in fair value of derivative liabilities - warrants		(51	)		(1,052,121	)
Changes in operating assets and liabilities
Accounts receivable		1,499			(1,122	)
Inventory		596			581
Prepaid insurance		5,709			(3,200	)
Accounts payable and accrued liabilities		601			(27,887	)
Accrued interest - convertible debenture		2,393			5,573
Merchant service reserves		-			12,405
Deferred revenue		218			(1,232	)
Net Cash used in operating activities		(295,366	)		(279,291	)

Cash flows from investing activities
Website development		-			(4,452	)
Net cash used in investing activities		-			(4,452	)

Cash flow from financing activities
Proceeds from promissory note		-			50,000
Payment on convertible note		(70,000	)
Proceeds from common stock subscriptions		620,000			-
Net cash provided by financing activities		550,000			50,000

Net increase (decrease) in cash and cash equivalents		254,634			(233,743	)
Cash and cash equivalents at beginning of period		36,170			266,843
Cash and cash equivalents at end of period	$	290,804		$	33,100

Supplemental disclosure of cash flow information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Stock issued for conversion of debt	$	40,000		$	-

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

Medefile International, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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"), 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, 2014. 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 June 30, 2015, and the results of operations and cash flows for the six months ended June 30, 2015 and 2014. The results of operations for the six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Restatement

The Company entered into two 10% Secured Convertible Debentures with a significant shareholder. The debentures carry a one year term. The debentures were issued in the amount of $50,000 on November 4, 2013 and $60,000 on December 17, 2013.

The company assessed the fair value of the conversion option using the Black Scholes pricing model and recorded a derivative liability for the value. The adjustment for this valuation to Derivative Liability is $3,030. An adjustment to change in fair value of derivative liability is a gain of $30,213 for the quarter ended June 30, 2015 loss of $3,030 for the six months ended June 30, 2015.

During the first quarter of 2015, the company recognized a change in derivative for the convertible debenture in amount of $33,243, the resulting derivative liability balance at March 31, 2015 is $33,243. During the second quarter 2015 the Company recognized a gain on the derivative liability of $30,213, the resulting derivative liability as of June 30, 2015 is $3,030.

The following table provides additional details regarding the changes to the balance sheet, statement of operations and statement of cash flows as of and for the three and six months ended June 30, 2015

	Original						Restated
	June 30,			Restatement			June 30,
	2015			Adjustments			2015
Assets
Current assets
Cash	$	290,804			-		$	290,804
Accounts receivable		3,926			-			3,926
Inventory		22,816			-			22,816
Merchant services reserve		2,938			-			2,938
Prepaid expense		-			-			-
Total current assets		320,484						320,484

Website development, net of accumulated amortization		221,494			-			221,494
Furniture and equipment, net of accumulated depreciation		-			-			-
Total assets	$	541,978					$	541,978

Liabilities and Stockholders' (Deficit)
Current Liabilities
Accounts payable and accrued liabilities	$	48,298			-		$	48,298
Convertible debenture - net of discount		14,931			-			14,931
Deferred revenues		902			-			902
Derivative liability - convertible debenture		-			3,030			3,030
Derivative liability		-			-			-
Total Current Liabilities		64,131						67,161

Stockholders' (Deficit)
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding		-			-			-
Common stock, $.0001 par value: 700,000,000 authorized; 572,953,672 shares issued and outstanding		57,295			-			57,295
Additional paid in capital		28,166,805			-			28,166,805
Common stock to be issued		69,920			-			69,920
Accumulated deficit		(27,816,173	)		(3,030	)		(27,819,203	)
Total stockholders' (deficit)		477,847						474,817
Total liability and stockholders'(deficit)	$	541,978					$	541,978

	For the					For the
	three months					three months
	ended					ended
	June 30,			Restatement		June 30,
	2014			Adjustments		2015
Revenue		12,742			-		12,742
Cost of goods sold		279			-		279

Gross profit		12,463					12,463

Operating expenses
Selling, general and administrative expenses		274,118			-		274,118
Depreciation and amortization expenses		22,149			-		22,149
Total operating expenses		296,267					296,267

Loss from operations		(283,804	)				(283,804	)

Other income (expenses)
Interest expense - convertible note		(352	)		-		(352	)
Interest expense - discount on convertible note		-			-		-
Change of derivative liabilities - convertible debenture		-			30,213		30,213
Change of derivative liabilities - warrants		-			-		-
Total other income (expense)		(352	)				29,861

Gain (loss) before income tax		(284,156	)				(253,943	)
Provision for income tax
Net income (loss)	$	(284,156	)			$	(253,943	)

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

Net loss per share: diluted	$	(0.00	)

Weighted average share outstanding: basic		275,365,725					67,162,073

Weighted average share outstanding: diluted		275,552,363					-

	For the						For the
	six months						six months
	ended						ended
	June 30,			Restatement			June 30,
	2015			Adjustments			2015
Revenue		25,330			-			25,330
Cost of goods sold		595			-			595

Gross profit		24,735						24,735

Operating expenses
Selling, general and administrative expenses		439,724			-			439,724
Depreciation and amortization expenses		44,299			-			44,299
Total operating expenses		484,023						484,023

Loss from operations		(459,288	)					(459,288	)

Other income (expenses)
Interest expense - convertible note		(2,393	)		-			(2,393	)
Interest expense - discount on convertible note		-			-			-
Change in derivative liability - convertible debentures		-			(3,030	)		(3,030	)
Change of derivative liabilities		51			-			51
Total other income (expense)		(2,342	)					(5,372	)

Gain (loss) before income tax		(461,630	)					(464,660	)
Provision for income tax
Net income (loss)	$	(461,630	)				$	(464,660	)

Net loss per share: basic	$	(0.00	)				$	(0.01	)

Net loss per share: diluted	$	(0.00	)

Weighted average share outstanding: basic		409,742,460						85,691,810

Weighted average share outstanding: diluted		409,929,098

	For the						For the
	six months						six months
	ended						ended
	June 30,			Restatement			June 30,
	2015			Adjustments			2015
Cash flows from operating activities
Net income	$	(461,630	)		(3,030	)	$	(464,660	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			-			-
Amortization		44,299			-			44,299
Interest expense - discount on convertible debenture		-			-			-
Stock based compensation		111,000			-			111,000
Change in derivative liability - convertible debenture		-			3,030			3,030
(Gain) loss in fair value of derivative liabilities		(51	)		-			(51	)
Changes in operating assets and liabilities								-
Accounts receivable		1,499			-			1,499
Inventory		596			-			596
Prepaid insurance		5,709			-			5,709
Accounts payable and accrued liabilities		601			-			601
Accrued interest - convertible debenture		2,393			-			2,393
Merchant service reserves		-			-			-
Deferred revenue		218			-			218
Net Cash used in operating activities		(295,366	)					(295,366	)

Cash flows from investing activities
Website development		-			-			-
Net cash used in investing activities		-						-

Cash flow from financing activities
Proceeds from promissory note		-			-			-
Payment on convertible note		(70,000	)		-			(70,000	)
Proceeds from common stock subscriptions		620,000			-			620,000
Net cash provided by financing activities		550,000						550,000

Net increase (decrease) in cash and cash equivalents		254,634						254,634
Cash and cash equivalents at beginning of period		36,170						36,170
Cash and cash equivalents at end of period	$	290,804					$	290,804

Supplemental disclosure of cash flow information
Cash paid for interest	$	-					$	-
Cash paid for income taxes	$	-					$	-

Stock issued for conversion of debt	$	40,000					$	40,000

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 patients’ 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 MedeFileiPHR 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, cell phone, PDA, e-reader, et al), as well as the portable MedeFile flash drive/keychain or branded UBS-bracelet.

By subscribing to the MedeFile system, members empower themselves to take control of their own health and well-being, and 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 that:

	●	MedeFile has developed products and services geared to the patient, which also have 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; our products’ 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), which are by no means complete or necessarily accurate records.

	●	MedeFile provides a coherent mix of services and products that are intended to improve 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 an operating loss of $459,288 and a net loss of $464,660 for the six months ended June 30, 2015. During the comparable six month period of 2014, the Company had an operating loss of $259,248 and net income of $732,752 (as a result of the change in the valuation of the Company’s warrant derivative). The Company had an accumulated deficit of $27,819,203 as of June 30, 2015. The Company has working capital of $253,323 as of June 30, 2015.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The operating losses raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to obtain additional financing depends on the success of its growth strategy and its future performance, each of which is subject to general economic, financial, competitive, legislative, regulatory, and other factors beyond the Company's control.

We will need additional investments in order to continue operations. 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 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, we may 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.

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 not above the FDIC limit.

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 June 30, 2015 and December 31, 2014, deferred revenue totaled $902 and $684, respectively.

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company’s financial statements.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company beginning November 1, 2017 and, at that time the Company may adopt the new standard under the full retrospective approach or the modified retrospective approach. Early adoption is not permitted. The Company is currently evaluating the method and impact the adoption of ASU 2014-09 will have on the Company’s condensed consolidated financial statements and disclosures.

In January 2014, the FASB issued ASU 2014-04, an update to ASC 310, "Receivables." The ASU clarifies that an in substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The amendments may be adopted using either a modified retrospective transition method or a prospective transition method. Early adoption of the guidance is permitted. The impact of this guidance is currently being evaluated by the Company, but is not expected to have a significant impact on the Company's financial position, results of operations or disclosures.

Fair Value of Financial Instruments

Cash and Equivalents, Deposits In-Transit, Receivables, Prepaid and Other Current Assets, Accounts Payable, Accrued Salaries and Wages and Other Current Liabilities

The carrying amounts of these items approximated fair value.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements).

Level 1 —Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 —Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 —Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below:

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Assets
Website development	$	–	$	–	$	221,494	$	221,494
Total	$	–	$	–	$	221,494	$	221,494
Liabilities
Derivative liability – convertible debenture	$	-	$	-	$	3,030	$	3,030
Deferred Revenues		902		–		–		902
Total	$	902	$	–	$	3,030	$	3,932

Impairment of Long Lived Assets

In accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. ASC 360-10 relates to assets that can be amortized and the life can be determinable. The Company reviews property and equipment and other long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the asset’s carrying amount to future undiscounted net cash flows the assets are expected to generate. Cash flow forecasts are based on trends of historical performance and management's estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. 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 exceeds the projected discounted future cash flows arising from the assets or their fair values, whichever is more determinable.

Inventory

Inventories are stated at the lower of cost or market value. Cost is determined by the first-in, first-out basis and market being determined as the lower of replacement cost or net realizable value. The Company records inventory write-downs for estimated obsolescence of unmarketable inventory based upon assumptions about future demand and market conditions. For the year ended December 31, 2014 the Company had an inventory write down in the amount of $30,000. There was no write down of inventory in the six months ended June 30, 2015.

Net Loss per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method.

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, the Company does not maintain an allowance for doubtful accounts. Recognition of a specific uncollectible account is written directly against the invoice in accounts receivable and expensed in the current period. Accounts receivables totaled $3,926 as of June 30, 2015 and $5,425 as of December 31, 2014

3. WEBSITE DEVELOPMENT

Website development consists of the following:

	June 30, 2015			December 31, 2014
Website development	$	328,738		$	324,285
Additional development		–			4,453
Accumulated amortization		(107,244	)		(62,946	)
Net website development	$	221,494		$	265,792

The Company completed the redesign in January 2015. The redesign is being amortized over a three year period. Amortization expense for the three month period ending June 30, 2015 was $22,149 compared to $0 for the three month period ended June 30, 2014, respectively. Amortization expense for the six month period ending June 30, 2015 was $44,299 compared to $0 for the six month period ended June 30, 2014, respectively.

4. FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

	June 30, 2015			December 31, 2014
Computers and equipment	$	169,286		$	169,286
Furniture and fixtures		38,618			38,618
Subtotal		207,904			207,904
Less: accumulated depreciation		(207,904	)		(207,904	)
Net furniture and equipment	$	–		$	–

Depreciation is calculated by using the straight-line method over the estimated useful life. Furniture and equipment was fully depreciated as of June 30, 2015. Depreciation expense for the three months ended June 30, 2015 and 2014 totaled $0 and $307, respectively. Depreciation expense for the six months ended June 30, 2015 and 2014 totaled $0 and $412, respectively.

5. CONVERTIBLE DEBENTURES – RELATED PARTY

The Company entered into two 10% Secured Convertible Debentures with a significant shareholder. The debentures carry a one year term. The debentures were issued in the amounts of $50,000 on November 4, 2013 and $60,000 on December 17, 2013. Both debentures are convertible into common stock at a conversion price of the lower of $0.10 (subject to adjustments for the events of stock splits, stock dividends and similar transaction) or 80% of the previous day’s market price of common stock.

	June 30, 2015			December 31, 2014
Convertible debenture – related party	$	122,538		$	122,538
Accumulated Interest		2,393
Payment		(110,000	)		–
Convertible debenture	$	14,931		$	122,538

6. WARRANT LIABILITY

In connection with certain securities purchase agreements entered into during the third quarter of 2011 and the second quarter of 2012, the Company granted warrants with ratchet provisions. The warrants contain an expiration date of four years from the date of grant. During the first two years of grant, if the Company issues any additional shares of common stock at a price per share less than the exercise price in effect, the exercise price will be adjusted to equal the average price per share received by the Company for the additional shares issued. After the first two years following the issuance date, if the Company issues any additional shares of common stock at a price per share less than the exercise price in effect, the exercise price will be adjusted using a formula based on the existing exercise price, the outstanding shares before and after the issuance of such shares, and the average price during the issuance of such shares. In addition to the exercise price adjustment, the number of shares upon exercise of the warrants is also subject to adjustment.

Upon grant, the Company assesses the fair value of the warrants using the Black Scholes pricing model and records a warrant liability for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the warrant liability to the new value, and records a corresponding gain or loss (see below for variables used in assessing the fair value). The Company uses expected volatility based primarily on historical volatility using weekly pricing observations for recent periods that correspond to the expected life of the warrants. The risk-free interest rate is based on U.S. Treasury securities rates.

Due to the ratchet provisions, the Company treats the warrants as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging” (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entity’s own common stock.

As of June 30, 2015, these warrants include the following:

Warrants granted during July 2011 in connection with the sale of 35,461 shares of common stock with the right to originally purchase up to 35,461 shares of the Company’s common stock with an original exercise price of $2.50. Due to the issuance of the Company’s common stock in April 2012, the exercise price was adjusted to $0.50 and the number of shares to 1,808,511. Fair value was determined using the following variables:

	Grant Date			June 30, 2015			December 31, 2014
Risk-free interest rate at grant date		1.21	%		1.13	%		1.27	%
Expected stock price volatility		194.9	%		92.2	%		189.65	%
Expected dividend payout		–			–			–
Expected option in life-years		4			.27			1.5

Warrants granted during April 2012 in connection with the sale of 100,000 shares of the Company’s preferred stock to a significant shareholder and brother of the then-Chief Executive Officer with the right to purchase up to 200,000 shares of the Company’s common stock with an exercise price of $0.50. Fair value was determined using the following variables:

	Grant Date			June 30, 2015
Risk-free interest rate at grant date		0.47	%		1.13	%
Expected stock price volatility		137.8	%		92.2	%
Expected dividend payout		–			–
Expected option in life-years		3.75			1.03.

Warrants granted during April 2012 in connection with the sale of 1,000,000 shares of the Company’s common stock with an exercise price of $0.50.

	Grant Date			June 30, 2015
Risk-free interest rate at grant date		0.47	%		1.13	%
Expected stock price volatility		137.8	%		92.2	%
Expected dividend payout		–			–
Expected option in life-years		3.75			1.05

Transactions involving warrants with ratchet provisions are as follows:

	Number of Warrants		Weighted-Average Price Per Share
Outstanding at December 31, 2013		3,008,511	$	0.50
Granted
Exercised
Canceled or expired
Additional due to ratchet trigger
Outstanding at December 31, 2014		3,008,511		0.50
Granted
Exercised
Canceled or expired
Addition due to ratchet trigger
Outstanding at June 30, 2015		3,008,511	$	0.50

As of June 30, 2015 and December 31, 2014, the warrant liability consisted of the following:

	June 30, 2015			December 31, 2014
Warrant liability (beginning balance)	$	51		$	5,618,819
Additional liability due to new grants
Loss(gain) on changes in fair market value of warrant liability		(51	)		(5,618,786	)
Net warrant liability	$	–		$	51

Change in fair market value of warrant liability resulted in a gain of $51 and a loss of $948,857 for the three months ended March 31 2015 and 2014, respectively.

7. DERIVATIVE LIABILITY

The following Secured Convertible Debentures entered into in November and December 2013 contain ratchet provisions regarding the conversion of debt into shares of common stock.

The Company entered into 10% Secured Convertible Notes in November 2013 and December 2013, both for a term of 12 months. The debentures are in the amount of $50,000 and $60,000 respectively. The conversion price of the note is based on 80% of the previous day’s market price.

The Company assesses the fair value of the conversion option using the Black Scholes pricing model and records a derivative expense and a corresponding derivative liability for the value. The Company then assesses the fair value of the derivative quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility using daily pricing observations for recent periods that correspond to the expected life of the notes. The risk-free interest rate is based on U.S. Treasury securities rates.

Due to the ratchet provisions, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging” (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entity’s own common stock.

	June 30, 2015
Risk-free interest rate at grant date		.28	%
Expected stock price volatility		161	%
Expected dividend payout		–
Expected option in life-years		.75

As of June 30 2015, derivative liability for this note is $3,030 and the change of derivative liability for the quarter ended June 30, 2015 was $30,213 and for the six months ended June 30, 2015 was $3,030.

8. EQUITY

Common Stock

On October 8, 2012, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada, pursuant to which (i) the Company effected a 5,000-to-1 reverse split of its common stock and (ii) the number of authorized shares of the Company’s common stock decreased from 75,000,000,000 to 100,000,000. The market effective date of the reverse split was October 9, 2012. The effect of the stock split has been applied retroactively. On December 19, 2013 the Company increased its authorized shares of common stock from 100,000,000 to 500,000,000. On February 10, 2015 the Company increased its authorized shares of common stock from 500,000,000 to 700,000,000.

2013

On January 17, 2013 the Company entered into a Securities Purchase Agreement pursuant to which the Company sold 400,000 shares of common stock for an aggregate purchase price of $200,000

On April 15, 2013, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 2,000,000 shares of common stock for an aggregate purchase price of $400,000.

On May 1, 2013 the Company issued an aggregate of 11,872,281shares of common stock to purchasers under the securities purchase agreements entered into by the Company in July 2011 and April 2012 pursuant to anti-dilution rights held by such purchasers.

On August 27, 2013, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 42,743 shares of common stock for an aggregate purchase price of $29,920.

On September 23, 2013, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 21,429 shares of common stock for an aggregate purchase price of $15,000.

On December 17, 2013, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 2,000,000shares of common stock for an aggregate purchase price of $40,000.

On December 20, 2013, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 15,000,000 shares of common stock for an aggregate purchase price of $300,000.

2014

On April 17, 2014, the Company issued an aggregate of 150,129,655 shares of common stock to certain shareholders of the Company, in accordance with anti-dilution rights held by such shareholders, including 125,584,200 shares to Lyle Hauser and 24,545,455 shares to purchasers under Securities Purchase Agreements entered into by the Company in July 2011. Lyle Hauser is the Company's largest shareholder.

On July 3, 2014, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 15,000,000 shares of common stock for an aggregate purchase price of $200,000.

On July 6, 2014, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 20,000,000 shares of common stock for an aggregate purchase price of $150,000.

2015

During the first quarter of 2015, the Company issued an aggregate of 279,099,100 shares of common stock to purchasers under the securities purchase agreements entered into by the Company in January and February 2015 for aggregate price of $620,000.

On March 18, 2015 the Company issued 18,018,018 shares of common stock in exchange for $40,000 of debt owed by the Company.

On May 11, 2015 the Company issued 50,000,000 shares of common stock to its CEO and a consultant for a total expense of stock based compensation of $111,000.

Preferred Stock

On April 10, 2012, the Company filed a certificate of designation of Series B Preferred Stock (the “Series B Certificate of Designation”) with the Secretary of State of Nevada, pursuant to which 100,000 shares of the Company’s preferred stock were designated as Series B Convertible Preferred Stock (the “Series B Preferred Stock”). Pursuant to the Series B Certificate of Designation, the Series B Preferred Stock:

	●	Has a liquidation preference over the common stock equal to the stated value of $1.00 per share.

	●	Votes as a single class with the common stock and entitles its holders, for each share of Series B Preferred Stock, to cast such number of votes equal to 0.00051% of the total number of votes entitled to be cast. Accordingly, a holder of all 100,000 shares of Series B Preferred Stock will have the right to cast 51% of the total number of votes entitled to be cast.

	●	Will automatically convert into common stock at a ratio of 2 shares of common stock for each share of Series B Preferred Stock, effective upon the Company’s filing of a certificate of amendment to its articles of incorporation.

On April 12, 2012, the Company entered into a securities purchase agreement with Lyle Hauser (the “Preferred Stock Investor”). Lyle Hauser is the Company’s largest shareholder and the brother of Kevin Hauser, the Company’s then-chief executive officer. Pursuant to the purchase agreement, on April 12, 2012, the Company sold 100,000 shares of Series B Preferred Stock to the Preferred Stock Investor for an aggregate purchase price of $100,000, and the Company issued four-year warrants to purchase 200,000 shares of common stock to the Preferred Stock Investor with an exercise price of $0.50. On April 23, 2012, 100,000 Series B Preferred shares were converted to 200,000 shares of common stock.

Stock Options

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.

Other Warrants

Transactions involving warrants are summarized as follows:

`	Number of Warrants		Weighted- Average Price Per Share
Outstanding at December 31, 2013		29,000		30.07
Granted		–		–
Exercised		27,000		25.00
Canceled or expired		–		–
Outstanding at December 31, 2014		2,000	$	50.00
Granted		–		–
Exercised		-2,000		-2,000
Canceled or expired		–		–
Outstanding at June 30, 2015		–	$	–

9. RELATED PARTY TRANSACTIONS

10. SUBSEQUENT EVENTS

Effective July 6, 2015, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada, pursuant to which the Company effected a 20-to-1 reverse split of its common stock. Share amounts herein do not give retroactive effect to this reverse split unless otherwise indicated.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

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 customer acceptance of new products, the impact of competition and price erosion, as well as other risks and uncertainties. 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. Except as may be required under applicable securities laws, we undertake no duty to update this information.

OVERVIEW

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 1,979 shares of Bio-Solutions' common stock to the OmniMed Shareholders.

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" or the "Company").

Overview of Business

MedeFile International, Inc., through its MedeFile, Inc. subsidiary, 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. Our goal is to revolutionize the medical industry by bringing patient-centric digital technology to the business of medicine. We intend to accomplish our 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. Our 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.

By subscribing to the MedeFile system, members can empower themselves to take control of their own health and well-being, as well as 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.

We believe we enjoy a number of direct, competitive advantages over others in the medical records marketplace, including that:

●

We have developed products and services geared to the patient, which also have the depth and breadth of information required by treating physicians and medical personnel

●

We do all the work of collecting and updating medical information on an ongoing basis; our products’ dependence on the patient taking action is minimal – particularly when compared to patient action required to support competing solutions.

●

We provide a complete medical record. Other companies claim complete longitudinal records, but in reality only provide histories (usually completed by the member/patient), which are by no means complete or necessarily accurate records

●

We provide a coherent mix of services and products that are intended to improve the quality of healthcare by enabling the patient to manage and access the information normally retained by doctors and other care providers.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2015 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2014

Revenues

Revenues for the three months ended June 30, 2015 totaled $12,742 compared to revenues of $26,536 during the three months ended June 30, 2014. The decrease in membership revenue is primarily related to 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. 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 three months ended June 30, 2015 totaled $274,118, an increase of $147,040 or approximately 115.7% compared to selling, general and administrative expenses of $127,078 for the three months ended June 30, 2014. The increase was due mainly to increased payroll, legal expense and consulting fees. There was a stock based compensation expense in the amount of $111,000 during the three months ended June 30, 2015.

Depreciation Expense

Depreciation expense totaled $0 for the three months ended June 30, 2015, compared to depreciation expense of $307 during the three months ended June 30, 2014. The decrease in depreciation was due to some assets being fully depreciated. All assets are fully depreciated.

Amortization Expense

Amortization expense for the three months ended June 30, 2015 was $22,149, compared to $0 for the three months ended June 30, 2014. Amortization expense is the expensing of the website development.

Interest Expense

Interest expense on convertible debentures for the three months ended June 30, 2015 and 2014, was $352 and $2,836 respectively. The Company entered into two secured convertible debentures during the third quarter of 2013. The notes have a one year term at a 10% interest rate.

Interest expense on the discount for convertible notes for the three months ended June 30, 2015 and 2014 was $0 and $27,424 respectively. The conversion feature of the debentures allows the note to be converted at a share price of the higher of $2.00 (as adjusted for the Company’s twenty-for-one reverse split of its common stock effected on July 6, 2015) or 80% of the previous day’s market trading price of common stock.

Change in derivative liability for convertible debenture for the three months ended June 30, 2015 and 2014, was a gain of $30,213 and $0 respectively.

Net Loss

For the reasons stated above, our operating loss for the three months ended June 30, 2015 was $283,804 compared to an operating loss of $101,150 for the three months ended June 30, 2014. The increase in operating loss of $182,254 is primarily the result of an increase in our general and administrative and compensation expenses and increased amortization expense as detailed above. We had a net loss of $253,943, or $(0.00) per share, for the three months ended June 30, 2015, compared to a net loss of $28,146, or $(0.00) per share, for the three months ended June 30, 2014. We had a change in the fair value of derivative liability of warrants of $0 for the three months ended June 30, 2015 and $103,264 for the three months ended June 30, 2014.

FOR THE SIX MONTHS ENDED JUNE 30, 2015 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2014

Revenues

Revenues for the six months ended June 30, 2015 totaled $25,330 compared to revenues of $42,468 during the six months ended June 30, 2014. The decrease in membership revenue is primarily related to 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. 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 six months ended June 30, 2015 totaled $439,724, an increase of $139,001 or approximately 46.2% compared to selling, general and administrative expenses of $300,723 for the six months ended June 30, 2014. The increase was due mainly to increased payroll, legal expense and consulting fees. There was a stock based compensation expense in the amount of $111,000 during the three months ended June 30, 2015.

Depreciation Expense

Depreciation expense totaled $0 for the six months ended June 30, 2015, compared to depreciation expense of $412 during the six months ended June 30, 2014. The decrease in depreciation was due to some assets being fully depreciated. All assets are fully depreciated.

Amortization Expense

Amortization expense for the six months ended June 30, 2015 was $44,299, compared to $0 the six months ended June 30, 2014. Amortization expense is the expensing of the website development.

Interest Expense

Interest expense on convertible debentures for the six months ended June 30, 2015 and 2014, was $2,393 and $5,573 respectively. The Company entered into two secured convertible debentures during the third quarter of 2013. The notes have a one year term at a 10% interest rate.

Interest expense on the discount for convertible notes for the six months ended June 30, 2015 and 2014 was $0 and $54,548 respectively. The conversion feature of the debentures allows the note to be converted at a share price of the higher of $2.00 (as adjusted for the Company’s twenty-for-one reverse split of its common stock effected on July 6, 2015) or 80% of the previous day’s market trading price of common stock.

Change in derivative liability for convertible debenture for the six months ended June 30, 2015 and 2014, was $3,030 and $0 respectively.

Net Loss

For the reasons stated above, our net loss for the six months ended June 30, 2015 was $464,660, or $(0.00) per share, a decrease of $1,197,412 compared to net income for the six months ended June 30, 2014 of $732,752, or $0.01 per share. The significant change is directly related to adjustments in the fair value of our derivative liability. Our operating loss for the six months ended June 30, 2015 was $459,288 compared to an operating loss of $259,248 for the six months ended June 30, 2014. The increase in operating loss of $200,040 is primarily the result of an increase in our general and administrative and compensation expenses and increased amortization expense as detailed above.

FINANCIAL CONDITION

Liquidity and Capital Resources

As of June 30, 2015, we had cash and cash equivalents of $290,804, inventory of $22,816, merchant services reserve of $2,938, and accounts receivable of $3,926. Net cash used in operating activities for the six months ended June 30, 2015 was approximately $295,366. Our current liabilities as of June 30, 2015 of $67,161 consisted of: $48,298 for accounts payable and accrued liabilities, deferred revenues of $902, convertible debenture of $14,931 and derivative liability on convertible debenture of $3,030. We have net working capital of $253,323 as of June 30, 2015.

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 $464,660 for the six months ended June 30 2015 and had an accumulated deficit of $27,819,203 as of June 30, 2015.

The Company currently estimates that it will require approximately $420,000 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 conditions 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 June 30, 2015 or as of the date of this report.

Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities.

We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements, we believe the following critical accounting policy involves the most complex, difficult and subjective estimates and judgments:

Revenue Recognition

Stock-based Compensation

Recent Accounting Pronouncements

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for a smaller reporting company.

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 not 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 also are not 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 June 30, 2015, 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

We are not party to any material legal proceedings.

Item 1A. Risk Factors

Not required for a smaller reporting company.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MEDEFILE INTERNATIONAL, INC.

Date: December 22, 2015	By:	/s/ Niquana Noel
		Niquana Noel
		Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Coro Global Inc. - FORM 10-Q/A - December 22, 2015

Attached files

Coro Global Inc. Reports