Coro Global Inc. - Quarter Report: 2008 September (Form 10-Q)

form10q.htm

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, 2008
	OR
o	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 33-251256-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.)

240 Cedar Knolls Rd.

Cedar Knolls, NJ 07927

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (973) 993-8001

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 x No o

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 as of September 30, 2008: 193,771,410

Table of Contents

	Page
PART I

FINANCIAL INFORMATION
ITEM 1. Financial Statements	F-1
ITEM 2. Management Discussion and Analysis of Financial Condition and Results of Operations	3
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	5
ITEM 4. Controls and Procedures	5
ITEM 4(T). Controls and Procedures	5

PART II

OTHER INFORMATION	6
ITEM 1. Legal Proceedings	6
ITEM 1A. Risk Factors	7
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	7
ITEM 3. Defaults Upon Senior Securities	7
ITEM 4. Submission of Matters to a Vote of Security Holders	7
ITEM 5. Other Information	7
ITEM 6. Exhibits	8
Signatures	9

Medefile International Inc

Condensed Consolidated Balance Sheet

	(Unaudited)
	September 30,			December 31,
	2008			2007
Assets
Current Assets
Cash and equivalents	$	89,277		$	1,367,415
Accounts receivable		981			2,808
Prepaid expenses		33,892			26,082
Total Current Assets		124,150			1,396,305
Furniture and equipment, net of accumulated depreciation		60,382			63,352
Deposits and other assets		14,475			14,990
Intangibles		1,339			1,339
Total Assets	$	200,346		$	1,475,986

Liabilities and Stockholders' (Deficiency) Equity
Current Liabilities
Accounts payable and accrued liabilities	$	100,554		$	184,814
Deferred revenue		7,899			6,343
Advance customer payments		-			50,000
Note payable		75,058
Note payable - related party		45,296
Loan payable - related party		-			1,102,104
Total Current Liabilities		228,807			1,343,261

Commitments and Contingencies
Stockholders' (Deficiency) Equity
Common stock, $.0001 par value: 300,000,000 authorized: 193,771,410 and 178,733,910 shares issued and outstanding September 30, 2008 and December 31, 2007 respectively		19,377			17,873
Common stock subscribed					3,750,000
Additional paid in capital		10,981,177			5,893,302
Accumulated Deficit		(11,029,369	)		(9,528,804	)
Accumulated other comprehensive gain		354			354
Total stockholders' (Deficiency) Equity		(28,461	)		132,725
Total Liability and Stockholders'	$	200,346		$	1,475,986

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

F-1

Medefile International Inc

Condensed Consolidated Statement of Operations

(Unaudited)

	For the Three			For the Three			For the Nine			For the Nine
	Months			Months			Months			Months
	Ended			Ended			Ended			Ended
	Sept 30,			Sept 30,			Sept 30,			Sept 30,
	2008			2007			2008			2007
Revenues	$	25,381		$	9,410		$	47,642		$	34,865

Operating Expenses
Selling, general and administrative expenses		325,284			441,252			1,395,850			1,191,628
Non-cash compensation		-			562,622			102,678			1,726,209
Depreciation and amortization expense		5,884			2,782			14,372			17,637
Total operating expense		331,168			1,006,656			1,512,900			2,935,474

Loss from Operations		(305,787	)		(997,246	)		(1,465,258	)		(2,900,609	)
Other Income/Expenses
Interest expense note payable		(58	)		-			(58	)		-
Interest expense - related party note payable		(9,807	)		(48,610	)		(35,249	)		(124,087	)
Total other income (expense)		(9,865	)		(48,610	)		(35,307	)		(124,087	)

Loss before income tax		(315,652	)		(1,045,856	)		(1,500,565	)		(3,024,696	)
Provisions for income taxes		-			-			-			-
Net Loss	$	(315,652	)	$	(1,045,856	)	$	(1,500,565	)	$	(3,024,696	)
Other comprehensive gain (loss):
Unrealized loss on marketable securities		-			-			-			-
Comprehensive loss	$	(315,652	)	$	(1,045,856	)	$	(1,500,565	)	$	(3,024,696	)

Net loss per share: basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Weighted average share outstanding:
basic and diluted		205,925,256			178,733,910			202,075,105			178,733,910

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

F-2

Medefile International Inc

Condensed Consolidated Statement of Cash Flows

(Unaudited)

	For the Nine			For the Nine
	Months Ended			Months Ended
	Septeber 30,			Septeber 30,
	2008			2007
Cash Flow from Operating Activities
Net loss	$	(1,500,565	)	$	(3,024,696	)
Adjustments to reconcile net loss to net
Cash used in operating activities
Depreciation and amortization		14,372			17,675
Non cash compensation		102,679			1,726,209
Interest expense - related party		58			-
Interest expense		35,121			124,462
Bad debt expense		(9,362	)		-
Changes in operating assets and liabilities
Accounts receivable		11,188			-
Prepaid expenses		(7,810	)		(16,907	)
Marketable securities		-			106,186
Deposits and other assets		515			(24,662	)
Acccounts payable and accrued expenses		(84,259	)		720
Deferred revenue		1,556			(13,349	)
Advance Customer Payments		(50,000	)		-

Net Cash used in operating activities		(1,486,507	)		(1,104,362	)

Cash flows from Investing activities
Purchase of equipment		(11,402	)		(13,202	)
Net cash used in investing activities		(11,402	)		(13,202	)

Net cash flow from financing activities
Proceeds from note payables		119,771			1,095,000
Payments on loans from related parties		(500,000	)		(20,979	)
Proceeds from stock issuance		600,000			-
Net cash provided by financing activities		219,771			1,074,021

Net Cash Increase	$	(1,278,138	)	$	(43,543	)

Cash and cash equivalents at beginning of period		1,367,415			98,955

Cash and cash equivalent at end of period	$	89,277		$	55,412

Supplemental disclosure of cash flow information
Cash paid during the period for
Cash paid for income taxes	$	-		$	780
Cash paid for Interest	$	-		$	-
Supplemental disclosure of non-cash financing activities
Interest capitalized on note payables note payable to related party	$	35,179		$	124,462
Common issued for stock subscriptions	$	3,750,000		$	-
Cancellation of debt by stockholder
recorded as contribution to additional paid in capital	$	636,700		$	-

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

F-3

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 ("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-KSB for the fiscal year ended December 31, 2007. 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, 2008, and the results of operations and cash flows for the three and nine months ended September 30, 2008 and 2007. The results of operations for the nine months ended September 30, 2008 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Nature of Business Operations

Medefile has developed a system for gathering, digitizing, storing and distributing information for the healthcare field. Medefile's goal is to bring 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. Medefile's primary product is the MedeFile system, a highly secure system for gathering and maintaining medical records. The MedeFile system is designed to gather all of its members' medical records and create a single, comprehensive medical record that is accessible 24 hours a day, seven days a week.

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company has reported a net loss of $315,652 and $1,500,565 for the three and nine months ended September 30, 2008 and $4,160,846 for the year ended December 31, 2007 and had an accumulated deficit of $11,029,369 as of September 30, 2008 and $9,528,804 as of December 31, 2007.

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 availability of its borrowing capacity, 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 for cash flow to break even. 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, 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.

F-4

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.

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, 2008 and 2007 of $384 and $17,342, respectively. The Company incurred advertising costs for the nine months ended September 30, 2008 and 2007 of approximately $118,491 and $24,232, respectively. An advertising contract was entered into in May 2008 which included advertising and promotion through advertising media and website promotions. Total cost of the advertising was to be, $99,999 at signing of contract. A total of $99,999 had been paid through September 30, 2008.

The Company contracted with Ruckus Marketing in 2007. There developed a disagreement between parties as to the accuracy of deliverables. The contract was cancelled. Ruckus Market filed suit for payment and a judgment resulted in $15,000 being due. The judgment was paid in full on July 21, 2008

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting For Income Taxes". The provision for income taxes is comprised of current and deferred components. The current component presents the amount of federal and state income taxes that are currently reportable to the respective tax authorities and is measured by applying statutory rates to the Company's taxable income as reported in its income tax returns.

Deferred income taxes are provided for the temporary differences between the carrying values of the Company's assets and liabilities for financial reporting purposes and their corresponding income tax basis. These temporary differences are primarily attributable to net operating losses. The temporary differences give rise to either a deferred tax asset or liability in the financial statements, which is computed by applying statutory tax rates to taxable or deductible temporary differences based upon classification (i.e., current or non-current) of the asset or liability in the financial statements which relate to the particular temporary difference.

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. In accordance with the provisions of Statement of Financial Accounting Standards No. 142 (SFAS No. 142), Goodwill and Other Intangible Assets, 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.

F-5

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 in accordance with Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition," which superseded SAB No. 101, "Revenue Recognition in Financial Statements." SAB No.101 requires that four basic criteria 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) collectibility 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 collectibility 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. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. SAB No. 104 incorporates Emerging Issues Task Force ("EITF") No. 00-21, "Multiple-Deliverable Revenue Arrangements." EITF No. 00-21 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing EITF No. 00-21 on the Company's consolidated financial position and results of operations was not significant. This issue addresses determination of whether an arrangement involving more than one deliverable contains more than one unit of accounting and how the arrangement consideration should be measured and allocated to the separate units of accounting.

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.

Advance Customer Payments

The Company occasionally will receive lump sum payments from its clients that will be used to prepay a number of subscriptions on behalf of the client’s members. As the client’s members enroll for these subscriptions, then the amounts are deducted from the advance customer payments account and are recognized as revenue or deferred revenues as appropriate. A liability is recorded to reflect the amounts that are potentially refundable.

Reclassifications

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

Liquidity

As of September 30, 2008, we had cash and cash equivalents of $89,277. Net cash used in operating activities for the nine months ended September 30, 2008 was $1,486,507. Current liabilities are $228,807 of which $100,554 is for accounts payable and $120,354 is for Note Payables. We have negative working capital of $104,657 as of September 30, 2008. During the first quarter of 2008, we raised $300,000 from common stock sales and made a repayment to a related party that is our largest stockholder in the amount of $500,000. (Note 8). During the third quarter of 2008 we raised an additional $300,000 from common stock sales and $119,771 through issuances of two Note Payables (Note 7).

The accompanying condensed consolidated financial statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company has reported a net loss of $1,500,565 for the nine months ended September 30, 2008 and $4,160,846 for the year ended December 31, 2007 and had an accumulated deficit of $11,029,369 as of September 30, 2008 and $9,528,804 as of December 31, 2007.

Our previous registered independent certified public accountants have stated in their report dated March 31, 2008, that we have incurred operating losses in the past years, and that we are dependent upon management's ability to develop profitable operations. These factors among others may raise substantial doubt about our ability to continue as a going concern.

We will need additional investments in order to continue operations to cash flow break even. 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.

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 the purchase of 8,175,000 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, 2008. The warrants to the purchase of 200,000 common shares and outstanding options to purchase 5,640,000 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, 2008.

F-6

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

On January 1, 2006 the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004) "Share-Based Payment" ("SFAS 123 (R) which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to a Employee Stock Purchase Plan based on the estimated fair values. SFAS 123 (R) supersedes the Company's previous accounting under Accounting Principles Board Opinion No.25, "Accounting for Stock Issued to Employees" ("APB 25") for the periods beginning fiscal 2006.

2. ACCOUNTS RECEIVABLE

During the second quarter of 2008 it was determined that $9,362 of Accounts Receivable was uncollectible. This amount was expensed as a Bad Debt Expenses as of September 30, 2008. 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. During the third quarter of 2008, $6,923 was received as previously expensed Bad Debt Expense.

3. PREPAID EXPENSES

Prepaid expenses consist of the following:

	September 30, 2008		December 31, 2007
Prepaid expenses	$	16,667	$	25,412
Prepaid insurance		17,225		670
Total prepaid	$	33,892	$	26,082

4. FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

	September30, 2008			December 31, 2007
Computers and equipment	$	169,286		$	157,884
Furniture and fixtures		38,618			38,618
Subtotal		207,904			196,502
Less: accumulated depreciation	$	(147,522	)	$	(133,150	)
Net furniture and equipment	$	60,382		$	63,352

Depreciation is calculated by using the straight-line method over the estimated useful life. Depreciation expense totaled $14,372 and $17,637 for the nine months ended September 30, 2008 and 2007, respectively.

F-7

5. INTANGIBLE ASSETS

The Company has adopted SFAS No. 142, Goodwill and Other Intangible Assets, whereby the Company periodically tests its intangible assets for impairment. On an annual basis, and when there is reason to suspect that their values have been diminished or impaired, these assets are tested for impairment, and write-downs will be included in results from operations. There was no impairment of acquired intangibles as of September 30, 2008 and December 31, 2007.

Identifiable intangible assets consist of the carrying value of a trademark totaling $1,339 as of September 30, 2008 and December 31, 2007. The trademark acquired is considered to have an undeterminable life, and as such will not be amortized. Instead, the trademark is tested annually for impairment, with any impairment charged against earnings in the Company’s consolidated statement of earnings. Management determined the fair value of the trademark acquired exceeded its recorded book value at September 30, 2008 and December 31, 2007.

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts Payable and Accrued Liabilities consist of the following:

Accounts payable	$	100,049
Payroll liabilities		505
Balance September 30, 2008	$	100,554

7. NOTE PAYABLE

On September 26, 2008, the Company issued a Demand Note in the principle amount of $75,000 to an individual. The Note bears interest at a rate of seven percent per annul.

	September 30, 2008
Borrowings	$	75,000
Repayments		-
Accrued interest		58
Balance, September 30, 2008	$	75,058

8. NOTE PAYABLE – RELATED PARTY

On July 31, 2008, the Company issued an unsecured Demand Note in the principle amount of $44,771 to Cybervault LLC, a company wholly owned by Medefile CEO. The Note bears interest at a rate of seven percent per annul.

	September 30, 2008
Borrowings	$	44,771
Repayments		-
Accrued Interest		525
Balance, September 30, 2008	$	45,296

F-8

9. LOAN PAYABLE - RELATED PARTY

The Company has been and continues to be dependent upon the funding from The Vantage Group, Ltd., (“Vantage”) the Company’s largest stockholder. On April 11, 2007, the Company issued two unsecured promissory notes to The Vantage Group as evidence of this indebtedness outstanding. Both notes bear interest at the rate of seven percent per annum. One note, with a principal amount of $1,115,379, was payable on July 1, 2008. The other note, is payable on demand in the principal amount of $700,000. During the year ended December 31, 2007, the Company borrowed a total of $1,245,000 against the demand note and repaid $20,979. On November 15, 2007, the Company and Vantage, entered into a debt conversion agreement. Pursuant to the debt conversion agreement, Vantage agreed to convert the aggregate principal amount of $2,100,000, of its indebtedness into an aggregate of 14,000,000 restricted shares of common stock of the Company. The conversion amount was used to satisfy the note maturing on July 1, 2008, and the remaining conversion amount was used to pay down the demand loan. In addition, the Company issued to Vantage 8,400,000 three year warrants to purchase an aggregate of 8,400,000 restricted shares of the Company’s common stock at an exercise price of $0.60 per share. As of December 31, 2007, the shares of common stock had not been issued and were recorded as common stock subscribed, until issuance. The shares were issued on February 7, 2008.

As of December 31, 2007, the Company was indebted to the Vantage Group Ltd. in the amount of $1,102,104, including accrued interest for the demand note bearing interest at 7% per annum. During the quarter ended March 31, 2008, the Company made payments on the demand note to Vantage for $500,000. The demand note balance and summarized transactions are shown below:

On September 23, 2008 the Company received a Cancellation of Debt from Vantage Group Ltd, canceling the remaining balance of the Loan Payable, including all outstanding interest as of that date. In addition Vantage Group Ltd surrendered 14,000,000 shares of common stock and 8,400,000 warrants at $0.60.

	September 30, 2008
Balance, December 31, 2007	$	1,102,104
Borrowings		-
Repayments		(500,000	)
Interest		34,596
Cancellation of Debt		(636,700	)
Balance, September 30, 2008	$	--

10. EQUITY

Common Stock

On November 15, 2007, the Company and Vantage, the Company’s largest stockholder and primary source of funding, entered into a debt conversion agreement. Pursuant to the debt conversion agreement, Vantage agreed to convert the aggregate principal amount of $2,100,000 of its indebtedness into an aggregate of 14,000,000 restricted shares of common stock of the Company. At December 31, 2007 the conversion amount was recorded as common stock subscribed until issuance. In addition, the Company issued to Vantage 8,400,000 three year warrants to purchase an aggregate of 8,400,000 restricted shares of the Company’s common stock at an exercise price of $0.60 per share. The shares were issued on February 7, 2008.

On November 16, 2007, pursuant to the terms of a securities purchase agreement the Company sold subscriptions for 11,000,000 restricted shares of the Company’s common stock and three year warrants to purchase an aggregate of 6,600,000 restricted shares of the Company’s common stock at an exercise price of $0.60 per share for aggregate proceeds of $1,650,000. As of December 31, 2007, the shares of common stock had not been issued and the funds were recorded as common stock subscribed until issuance. The shares were issued on February 7, 2008

During the quarter ended March 31, 2008, pursuant to the terms of the Purchase Agreement, the Company issued and sold 2,000,000 restricted shares of the Company’s common stock and three year warrants to purchase an aggregate of 1,200,000 restricted shares of the Company’s common stock at an exercise price of $0.60 per share for aggregate proceeds of $300,000. The Company claims an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated thereunder since, among other things, these transactions did not involve a public offering, the investors were accredited investors and/or qualified institutional buyers, the investors had access to information about us 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.

The Company issued 37,500 shares of common stock to an employee per their employment agreement during the quarter ended March 31, 2008. The Company recognized compensation expense of $22,125 based on the closing price of the Company’s common stock as of the grant date.

On September 23, 2008, in connection with the Cancellation of Debt Agreement with Vantage Group (Note 9) 14,000,000 share of restricted common stock, previously issued on February 27, 2008 were cancelled and returned to the Company.

On September 30, 2008 the Company issued 2,000,000 shares of restricted common stock in exchange for $300,000

F-9

Stock Options

A summary of option activity under the Plan as of December 31, 2007, and changes during the period then ended are presented below:

	Options	Weighted-Average Exercise Price
Outstanding at December 31, 2007	5,640,000	$	.080
Issued	--		--
Exercised	--		--
Forfeited or expired	--	$	--
Outstanding at September 30, 2008	5,640,000	$	0.80
Non-vested at September 30, 2008	--	$	--
Exercisable at September 30, 2008	5,640,000	$	0.80

The options outstanding as of September 30, 2008 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	1.50	5,640,000	$ 0.80

At September 30, 2008, the exercisable and outstanding options had no intrinsic value. Intrinsic value represents the difference between the company’s closing stock price on the last trading day of the fiscal period, which was $0.09 as of September 30, 2008, and the exercise price multiplied by the number of options outstanding.

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. Share based compensation expense recognized under SFAS 123 (R) for the nine months ended September 30, 2008 and 2007 was $102,678 and $1,163,587 respectively.

Warrants

On June 19, 2006 the Company issued 200,000 warrants to consultants for services to be provided. The warrants vested in 50,000 increments on June 19, 2006; September 18, 2006, December 17, 2006 and March 17, 2007. The Company charges the fair value of these warrants of $155,793 to deferred compensation. The Company charged to operation s the amount of $31,991 and $123,802 during the years ended December 31, 2007 and 2006 respectively. As of December 31, 2007, all warrants were fully expensed

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	86	%
Expected dividend payout	--
Expected option in life-years	4

As of December 31, 2007, all warrants were fully vested. During the quarter ended March 31, 2008, the Company issued 16,200,000 three year warrants to purchase an aggregate of 16,200,000 restricted shares of the Company’s common stock at an exercise price of $0.60 per share as part of the common stock sales. On September 23, 2008, in connection with the Vantage Group Ltd Cancellation of Debt agreement, 8,400,000 warrants previously mentioned were cancelled (See Note 8). A summary of the warrants outstanding and exercisable appears below:

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)
	$	3.50		50,000		1.72	$	3.50		50,000		1.72
	$	5.00		50,000		1.97	$	5.00		50,000		1.97
	$	6.50		50,000		2.21	$	6.50		50,000		2.21
	$	8.00		50,000		2.46	$	8.00		50,000		2.46
	$	0.60		7,800,000		2.25	$	0.60		7,800,000		2.50
	$	0.56		175,000		4.25	$	0.56		175,000		4.50
				8,175,000		2.29	$	0.73		8,175,000		2.29

F-10

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. These warrants were expensed to non-cash compensation in the amount of $80,553. 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

Transactions involving warrants are summarized as follows:

	Number of Warrants	Weighted-Average Price Per Share
Outstanding at December 31, 2007	200,000	$	5.75
Granted	16,375,000		0.60
Exercised	-		-
Canceled or expired	(8,400,000)		0.60
Outstanding at September 30, 2008	8,175,000	$	0.73

11. SUBSEQUENT EVENTS

None

F-11

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. 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. We undertake no duty to update this information. 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-KSB for the year ended December 31, 2007 filed with the Securities and Exchange Commission on March 31, 2008. The following discussion should be read in conjunction with our consolidated financial statements provided in this quarterly report on Form 10-Q.

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 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" or "the Company").

Our future operations are dependent upon the identification and successful completion of additional equity financing, the support of creditors and shareholders, and, ultimately, the achievement of profitable operations. Other than as discussed in this report, we know of no trends, events or uncertainties that are reasonably likely to impact our future liquidity.

RESULTS OF OPERATIONS

THREE MONTHS ENDING SEPTEMBER 30, 2008 COMPARED TO THREE MONTHS ENDING SEPTEMBER 30, 2007

Revenues

Revenues for the quarter ended September 30, 2008 totaled $25,381 compared to revenues of $9,410 during the quarter ended September 30, 2007. The increase in 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.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the quarter ended September 30, 2008 totaled $325,284 consisting primarily of cash compensation, marketing costs and professional fees. This was a decrease of $115,968 or approximately 26% compared to selling, general and administrative expenses of $441,252 for the quarter ended September 30, 2007. The overall decrease in the total selling, general and administrative is primarily due a decrease in sales, marketing, and business development expenses.

Non-cash Compensation

Non-cash compensation expenses for the quarter ended September 30, 2008 were $0.00 compared to $562,622 for the quarter ended September 30, 2007. This compensation was for stock-based compensation to board members, employees and consultants.

The non-cash compensation expense for the quarter ended September 30, 2007 was much higher as the Company was recognizing compensation expense on approximately 5,640,000 common stock options issued during 2006, which were fully expensed at December 31, 2007.

Depreciation Expense

Depreciation and amortization expense totaled $5,884 for the quarter ended September 30, 2008, compared to depreciation and amortization expense of $2,782 during the quarter ended September 30, 2007. The increase was due to some assets being fully depreciated and the purchase of assets in the 2008.

Interest Expense

Net interest expense for the quarter ended September 30, 2008 was $9,865, a decrease of $38,745 or approximately 80% compared to interest expense of $48,610 during the quarter ended September 30, 2007. The reason for the decrease was reduction in loans payable – related party, of which $2,100,000 was converted to equity during the quarter ended December 31, 2007 and additional repayments made on the same loan payable related party of $500,000 in the quarter ended March 31, 2008, reducing the average amount of the loan outstanding.

Net Loss

For the reasons stated above, our net loss for quarter ended September 30, 2008 was $315,652 or $0.00 per share, an increase of $730,204 or approximately 70%, compared to a net loss of $1,045,856 or $0.01 per share during the quarter ended September 30, 2007.

NINE MONTHS ENDING SEPTEMBER 30, 2008 COMPARED TO NINE MONTHS ENDING SEPTEMBER 30, 2007

Revenues

Revenues for the nine months ended September 30, 2008 totaled $47,642 compared to revenues of $34,865 during the nine months ended September 30, 2007. The increase in 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.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine months ended September 30, 2008 totaled $1,395,850 consisting primarily of cash compensation, marketing costs and professional fees. This was an increase of $204,222 or approximately 17% compared to selling, general and administrative expenses of $1,191,628 for the nine months ended September 30, 2007. The overall increase in the total selling, general and administrative is primarily due an increase in sales, marketing, and business development expenses.

Non-cash Compensation

Non-cash compensation expenses for the nine months ended September 30, 2008 were $102,678 compared to $1,726,209 for the nine months ended September 30, 2007. This compensation was for stock-based compensation to board members, employees and consultants.

The non-cash compensation expense for the nine months ended September 30, 2007 was much higher as the Company was recognizing compensation expense on approximately 5,640,000 common stock options issued during 2006, which were fully expensed at December 31, 2007.

Depreciation Expense

Depreciation and amortization expense totaled $14,372 for the nine months ended September 30, 2008, compared to depreciation and amortization expense of $17,637 during the nine months ended September 30, 2007. The decrease was due to assets being fully depreciated and purchases of fewer assets in the comparable six month periods.

Interest Expense

Net interest expense for the nine months ended September 30, 2008 was $35,307, a decrease of $88,780 or approximately 72% compared to interest expense of $124,087 during the nine months ended September 30, 2007. The decrease was due to a reduction in loans payable – related party, of which $2,100,000 was converted equity during the quarter ended December 31, 2007 and additional repayments made on the same loan payable related party of $500,000 in the quarter ended March 31, 2008, reducing the average amount of the loan outstanding.

Net Loss

For the reasons stated above, our net loss for nine months ended September 30, 2008 was $1,500,565 or $0.01 per share, a decrease in net loss of $1,524,131, or approximately 50%, compared to a net loss of $3,024,696 or $0.02 per share during the nine months ended September 30, 2007

FINANCIAL CONDITION

Liquidity and Capital Resources

As of September 30, 2008, we had cash and cash equivalents of $89,277. Net cash used in operating activities for the quarter was approximately $1,486,507. Current liabilities of $228,807 consisted of $100,554 for accounts payable and $120,354 for Note Payables. We have negative working capital of approximately $104,657. During the nine months ended September 30, 2008, we raised $600,000 from common stock sales, made a repayment to a related party that is our largest stockholder, in the amount of $500,000. (Note 9), and received a cancellation of Debt in the amount of $636,700 (Note 9)

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements as of September 30, 2008 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

Not applicable.

ITEM 4T. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer (our Principal Executive Officer and Principal Financial Officer), has evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the period ended September 30, 2008, the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of September 30, 2008 to ensure the timely collection, evaluation and disclosure of information relating to our company that would potentially be subject to disclosure under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Control Over Financial Reporting

During the most recent quarter ended September 30, 2008, 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 various lawsuits and legal proceedings that arise in the ordinary course of business. While management does not believe these matters will have a material effect on the Company’s financial statements, litigation is subject to inherent uncertainties, and an adverse result could arise from time to time that may harm the Company’s business, financial condition and results of operations. The Company and its subsidiaries are involved in the following:

Ruckus Marketing LLC

On March 17, 2008, the Company was notified via a process server that it was being sued by Ruckus Marketing LLC (“Ruckus”) in the Superior Court of New Jersey in Morris County. In its complaint, Ruckus stated various causes of action including breach of contract, unjust enrichment, quantum meriut and breach of covenant of good faith and fair dealing. Ruckus alleged that it was owed fees for marketing services it had performed for the Company. This matter was settled by the parties in July 2008.

Consumer Protection Corporation

On September 8, 2008, the Company was notified via a process server of a proposed class action suit brought by Consumer Protection Corporation (“CPC”) in Superior Court in the State of Arizona. CPC alleges that the Company sent an unsolicited facsimile advertisement in violation of the TCPA. On October 8, 2008, the matter was moved to the District Court of Arizona. On October 28, 2008, the Company filed a motion to dismiss the action based on the plaintiff’s failure to properly allege a cause of action. CPC filed a response to the Company’s motion to dismiss on November 4, 2008. CPC is seeking damages of $500 per member of the class. As the class has yet to be certified by the court, management is unable to estimate the potential liability related to this claim. The Company denies any involvement in the alleged facsimile transmission and intends to vigorously defend itself.

Garrett Sayer Group LLC

On October 23, 2008, the Company was notified that it was being sued by Garrett Sayer Group LLC (“Garrett Sayer”) in Superior Court of New Jersey in Morris County. Garrett Sayer, an employment placement service, alleges that the Company failed to pay a placement fee associated wit its placement of an employee at the Company. Garrett Sayer is seeking damages totaling $8,000. This action is currently pending and the Company intends to vigorously defend itself.

Item 1A. Risk Factors

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

In July 2008 the Company agreed to sell one million common shares of stock at $0.15 for funds received in the amount of $150,000. The Company agreed to sell an addition one million common shares of stock at $0.15 for an additional $150,000 for funds received in August 2008. During September 2008, 2,000,000 shares of common stock were issued.

The Company claims an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated thereunder since, among other things, these transactions did not involve a public offering, the investors were accredited investors and/or qualified institutional buyers, the investors had access to information about us 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.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

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.

2.1

Agreement and Plan of Merger made as of November 1, 2005 among Bio-Solutions International, Inc., OmniMed Acquisition Corp., OmniMed International, Inc., and the shareholders of OmniMed International, Inc. (as incorporated by reference to the Company's Current Report on Form 8-K filed on November 3, 2005).

3.1

Articles of Incorporation (as incorporated by reference to the Company's Annual Report on Form 10-KSB filed on April 17, 2006).

3.2

Bylaws of the Issuer (as incorporated by reference to the Company's Annual Report on Form 10-KSB filed on April 17, 2006).

3.3

Certificate of Amendment to Articles of Incorporation filed on August 31, 2004 (as incorporated by reference to the Company's Annual Report on Form 10-KSB filed on April 17, 2006).

3.4

Articles of Merger changing the Registrant's name to OmniMed International, Inc. (as incorporated by reference to the Company's Current Report on Form 8-K filed on November 22, 2005).

3.5

Articles of Merger changing the Registrant's name to Medefile International, Inc. (as incorporated by reference to the Company's Current Report on Form 8-K filed on January 18, 2006).

	10.6	2006 Stock Incentive Plan (as incorporated by reference to the Company's Annual Report on Form 10-KSB filed on April 17, 2006).

	10.7	HSA Bank Marketing Agreement

	10.8	Promissory Note dated April 11, 2007

	10.9	Promissory Note dated April 11, 2007—Add stock sales agreements and note

	14.	Code of Ethics

	16.1	Letter from Former Accountant (as incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 7, 2006)

	21.1	Subsidiaries

	31.1	Section 302 Certification – Chief Executive Officer

	31.2	Section 302 Certification – Chief Financial Officer

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

	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002- Chief Executive Officer

* 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, 2008	By:	/s/ Milton Hauser
		Milton Hauser
		President, Chief Executive Officer, Acting Chief Financial Officer and Director (Principal Executive Officer and Principal Financial Officer)