Coro Global Inc. - Quarter Report: 2011 March (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 March 31, 2011
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period from

Commission File Number33-251256-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.)

301 Yamato Rd, Ste 1200

Boca Raton, FL 33431

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (781) 497-2900

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 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). o Yes o No

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

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

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

Yes o No x

Number of shares outstanding of registrant’s class of common stock as of May 16, 2011: 3,668,049,471

Table of Contents

	Page

PART I - FINANCIAL INFORMATION	F-1

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.	8
Item 4. Controls and Procedures.	8

PART II - OTHER INFORMATION	9

Item 1. Legal Proceedings.	9
Item 1A. Risk Factors.	9
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	9
Item 3. Defaults Upon Senior Securities.	9
Item 4. (Removed and Reserved).	9
Item 5. Other Information.	9
Item 6. Exhibits.	10
Signatures	11

Item 1. Financial Statements.

MedeFile International, Inc
Condensed Balance Sheets


	Unaudited
	March 31,			December 31,
Assets	2011			2010
Current assets
Cash	$	388,398		$	499,652
Inventory		20,418			22,184
Merchant services reserve		10,950			6,173
Accounts receivable, net		3,991			2,468
Total current assets		423,757			530,477
Website development, net of accumulated amortization		41,963			47,210
Furniture and equipment, net of accumulated depreciation		17,764			20,364
Investment		1,800			-
Intangibles		1,339			1,339
Total assets	$	486,623		$	599,390

Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities	$	257,269		$	310,325
Cash overdraft		13,947			6,928
Deferred revenues		7,539			9,575
Total Current Liabilities		278,755			326,828


Stockholders' Equity
Preferred stock, $.0001 par value: 10,000 authorized,
no shares issued and outstanding		-			-
Common stock, $.0001 par value: 5,000,000,000 authorized;
3,459,396,410 and 3,450,021,410 shares issued and outstanding on
March 31, 2010 and December 31, 2010, respectively		345,939			345,002
Common stock payable		230,000			-
Additional paid in capital		16,242,678			16,090,116
Accumulated deficit		(16,610,749	)		(16,162,556	)
Total stockholders' equity		207,868			272,562
Total liability and stockholders' equity	$	486,623		$	599,390


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

F - 1

MedeFile International, Inc
Condensed Statements of Operations
(unaudited)


	For the Three			For the Three
	Months			Months
	Ended			Ended
	March 31,			March 31,
	2011			2010
Revenue	$	132,102		$	2,359

Cost of goods sold		63,475			-
Gross profit		68,627			2,359

Operating expenses
Selling, general and administrative expenses		379,120			79,175
Maketing expense		129,854			-
Depreciation and amortization expense		7,846			4,250
Total operating expenses		516,820			83,425

Loss from operations		(448,193	)		(81,066	)

Other Expenses
Interest expense - note payable		-			(7,709	)
Interest expense - related party note payable		-			(1,766	)
Total other expense		-			(9,475	)

Loss before income tax		(448,193	)		(90,541	)
Provision for income tax		-			-
Net Loss	$	(448,193	)	$	(90,541	)

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

Weighted average share outstanding		3,450,021,410			1,463,021,410
basic and diluted









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

F - 2

MedeFile International, Inc
Condensed Statements of Cash Flows
(unaudited)

	For the			For the
	Three			Three
	Months			Months
	Ended			Ended
	March 31,			March 31,
	2011			2010
Cash flows from operating activities
Net loss	$	(448,193	)	$	(90,451	)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization		7,847			4,250
Stock based services		37,500			-
Interest expense		-			7,709
Interest expense - related party		-			1,766
Changes in operating assets and liabilities
Accounts receivable		(1,523	)		-
Inventory		1,766			-
Merchant services reserve		(4,777	)		-
Deposits and other assets		-			13,325
Accounts payable and accrued liabilities		62,943			(16,157	)
Cash overdraft		7,019			-
Deferred revenue		(2,036	)		326
Net Cash used in operating activities		(339,454	)		(79,232	)
Cash flows from investing activities
Investment		(1,800	)		-
Website development		-			(14,400	)
Net cash used in investing activities		(1,800	)		(14,400	)
Cash flow from financing activities
Proceeds from common stock subscription		230,000
Proceeds from note payable					95,834
Net cash provided by financing activities		230,000			95,834
Net increase (decrease) in cash and cash equivalents		(111,254	)		2,202
Cash and cash equivalents at beginning of period		499,652			1,513
Cash and cash equvalents at end of period	$	388,398		$	3,715

Supplemental disclosure of cash flow information
Cash paid during period for
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
Cancellation of payroll liability to CEO	$	116,000		$	-
The accompanying notes are an integral part of these condensed financial statements

F - 3

MedeFile International, Inc.

Notes to Condensed Financial Statements

(Unaudited)

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS

Basis of Presentation

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

Nature of Business Operations

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. Medefile's goal is to revolutionize the medical industry by bringing patient-centric digital technology to the business of medicine. Medefile intends to accomplish its objective by providing individuals with a simple and secure way to access their lifetime of actual medical records in an efficient and cost-effective manner. Medefile's products and services are designed to provide healthcare providers with the ability to reference their patient's actual past medical records, thereby ensuring the most accurate treatment and services possible while simultaneously reducing redundant procedures.

Interoperable with most electronic medical record systems utilized by physician practices, clinics, hospitals and other care providers, the highly secure, feature-rich MedeFile iPHR solution has been designed to gather all of its members’ actual medical records on behalf of each member, and create a single, comprehensive Electronic Health Record (EHR). The member can access his/her records 24-hours a day, seven days a week – or authorize a third party user – on any web-enabled device (PC, 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, not only do members empower themselves to take control of their own health and well-being, they empower their healthcare providers to make sound and lifesaving decisions with the most accurate, up-to-date medical information available. In addition, with MedeFile, members enjoy the peace of mind that comes from knowing that their medical records are protected from fire, natural disaster, document misplacement or the closing of a medical or dental practice.

MedeFile enjoys a number of direct, competitive advantages over others in the medical records marketplace, including:

·	MedeFile has developed products and services geared to the patient, while containing the depth and breadth of information required by treating physicians and medical personnel.

·	MedeFile does all the work of collecting and updating medical information on an ongoing basis; its dependence on the patient taking action is minimal – particularly when compared to patient action required to support competing solutions.

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

·	MedeFile provides a coherent mix of services and products that are intended to affect the quality of healthcare by enabling the patient to manage and access the information normally retained by doctors and other care providers.

Going Concern

The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company has reported a net loss of $448,193 for the three months ended March 31, 2011 and $2,492,310 for the year ended December 31, 2010 and had an accumulated deficit of $16,610,749 as of March 31, 2011. The Company has working capital of $145,002 as of March 31, 2011.

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. Currently our operating account is above the FDIC limit.

Advertising

The Company follows the policy of charging the costs of advertising to expense as incurred. The Company incurred advertising costs for the three months ended March 31, 2011 and 2010 of $0 and $2,568 respectively.

Income Taxes

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

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

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

Property and Equipment

Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years up to 7 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 a website is estimated to be three years. 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.

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 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 March 31, 2011, the amount of $7,539 was in deferred revenue compared to $9,575 at December 31, 2010.

Reclassifications

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

Recent Accounting Pronouncements

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

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

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

Net Loss Per Share

Basic and diluted loss per share amounts are computed based on net loss divided by the weighted average number of common shares outstanding. Outstanding options to purchase 5,640,000 common shares and warrants to purchase 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 three months ended March 31, 2011.

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

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

2. ACCOUNTS RECEIVABLE

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

3. WEBSITE DEVELOPMENT

The website consists of the following:

	March 31, 2011			December 31, 2010
Website development	$	62,945		$	62,945
Accumulated amortization		(20,982	)		(15,735	)
Net website development	$	41,963		$	47,210

Amortization is calculated over a three year period beginning in the second quarter of 2010. Amortization expense for the three months ending March 31, 2011 and 2010 is $5,247 and $0, respectively.

4. FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

	March 31, 2011		December 31, 2010
Computers and equipment	$	169,286	$	169,286
Furniture and fixtures		38,618		38,618
Subtotal		207,904		207,904
Less: accumulated depreciation		(190,140)		(187,540	)
Net furniture and equipment	$	17,764	$	20,364

Depreciation is calculated by using the straight-line method over the estimated useful life. Depreciation expense totaled $2,600 and $4,250 for the three months ended March 31, 2011 and 2010, respectively.

5. EQUITY

Common Stock

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

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

F - 7

During the first quarter 2011, the Company entered into a Securities Purchase Agreement for the sale of 201,000,000 shares of common stock at a purchase price of $0.003 per share. Total proceeds from the sale of the stock totals $603,000 of which $230,000 has been received as of March 31, 2011. As discussed in Note 7, the shares were issued May 10, 2011. The additional funds of $373,000 were received in April 2011.

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

Stock Options

2006 Incentive Stock Plan

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

2008 Amended and Restated Incentive Stock Plan

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

2010 Incentive Stock Plan

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

A summary of option activity under all Plans as of March 31, 2011, and changes during the period then ended, are presented below:

	Options	Weighted-Average Exercise Price
Outstanding at December 31, 2009	5,640,000	$	.080
Issued	-		-
Exercised	-		-
Forfeited or expired	-		-
Outstanding at December 31, 2010	5,640,000	$	0.80
Issued	-		-
Expired	-		-
Forfeited	-		-
Outstanding at March 31, 2011	5,640,000		0.80
Non-vested at March 31, 2011	-		-
Exercisable at March 31, 2011	5,640,000	$	0.80

F - 8

The options outstanding as of March 31, 2011 have been segregated for additional disclosure as follows:

Options Outstanding			Options Exercisable
			Weighted
		Weighted	Average		Weighted
Range of		Average	Remaining		Average
Exercise	Number	Exercise	Contractual	Number	Exercise
Price	Outstanding	Price	Life	Exercisable	Price
$0.80	5,640,000	$ 0.80	.50	5,640,000	$ 0.80

Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. For the three months ended March 31, 2011 and 2010, the Company recorded no compensation expense related to options.

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. During the first quarter of 2011, all remaining warrants have expired. 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). As of March 31, 2011, the remaining 7,800,000 warrants have expired. A summary of the warrants outstanding and exercisable appears below:

Warrants Outstanding

Warrants Exercisable

Weighted

Average

Weighted

Average

Remaining

Average

Remaining

Exercise

Number

Contractual

Exercise

Number

Contractual

Prices

Outstanding

Life (years)

Price

Exercisable

Life (years)

0.56

175,000

2.0

0.56

175,000

2.0

175,000

2.0

0.56

175,000

.56

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

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

F - 9

Transactions involving warrants are summarized as follows:

	Number of Warrants	Weighted-Average Price Per Share
Outstanding at December 31, 2010	8,125,000	$	.56
Granted	-		-
Exercised	-		-
Canceled or expired	7,950,000		-
Outstanding at March 31,2011	175,000	$	0.56

6. RELATED PARTY TRANSACTIONS

On March 31, 2011, the Company’s CEO, Kevin Hauser, forgave $116,000 of Payroll Liability which had accumulated on December 31, 2010. In addition, Kevin Hauser agreed to reduce his salary for the remaining two years of his contract to $125,000 per year. The Company recorded the forgiveness as contributed capital

7. SUBSEQUENT EVENTS

During the first quarter 2011, the Company entered into a Securities Purchase Agreement for the sale of 201,000,000 shares of common stock at a purchase price of $0.003 per share. Total proceeds from the sale of the stock totals $603,000 of which $230,000 has been received as of March 31, 2011. Additional funds of $373,000 were received in April 2011. On May 10, 2011, 201,000,000 shares were issued for the Securities Purchase Agreement.

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

F - 10

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

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-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission on April 1, 2011. The following discussion should be read in conjunction with our consolidated financial statements provided in this quarterly report on Form 10-Q.

Organizational History

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

As a result of the Agreement, the OmniMed Shareholders assumed control of Bio-Solutions. Effective November 21, 2005 Bio-Solutions changed its name to OmniMed International, Inc. Effective January 17, 2006, OmniMed changed its name to MedeFile International, Inc. ("MedeFile" 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 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. 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.

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

·	We have developed products and services geared to the patient, while containing 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; its 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), and are by no means complete or necessarily accurate records.

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

Industry Overview

Since the beginning of modern medicine, information about a patient's history, testing, treatment and care have been key factors in the provision and delivery of quality healthcare. Medical record information takes many forms, such as the patient's diagnosis, treatments, surgeries, medications, allergies, x-rays, and test results. The usage of medical record information has dramatically increased over the past two decades due to factors such as the complex reimbursement structure in the United States healthcare system, an ever more litigious society, and increased patient awareness.

Every patient visit generates a medical record. Today, this information is largely contained in a paper-based patient medical record. A patient's medical records are usually stored in physicians' offices as well as other healthcare facilities the patient has visited. A record that tracks a patient's medical treatment over time is called a "longitudinal record".

In today's healthcare environment, access to hospital-based medical records by patients and other authorized parties (e.g., insurance companies, attorneys, etc.) is controlled by Release of Information (ROI) policies and procedures. ROI processes are based on the premise that patients have a right to access their medical records and that they must specifically designate any other party to whom their medical information can be released. ROI policies and procedures are based on the following laws and policies: the federal Health Insurance Portability and Accountability Act (HIPPA), various state laws, and the policies and professional practice guidelines set forth by the American Health Information Management Association (AHIMA).

Congress passed the Health Insurance Portability & Accountability Act (HIPAA) in 1996. The purpose of HIPAA is to prevent fraud in the healthcare industry and to protect confidential patient information. HIPPA standardizes and provides enforcement mechanisms for ROI rules and guidelines to protect personal healthcare information. HIPAA effects entities involved with electronic health care information--including health care providers, health plans, employers, public health authorities, life insurers, clearinghouses, billing agencies, information systems vendors, service organizations, universities, and even single-physician offices. The final version of the HIPAA Privacy regulations was issued in December 2000, and went into effect on April 14, 2001. A two-year "grace" period was included; enforcement of the HIPAA Privacy Rules began on April 14, 2003.

Overview of Products and Services

MedeFile

MedeFile is a Business-to-Business and a Business-to-Consumer subscription service. MedeFile is designed to create a "cradle to grave" longitudinal record for each of its members by retrieving and consolidating copies of their medical records. When the records are received, the MedeFile system consolidates them into a single medically correct format. The records are then stored in Medefile's MedeVault, a secure repository that can be accessed by MedeFile members 24 hours a day, 7 days a week. Because of the unique security procedures incorporated into the MedeFile system through SecuroMed, the member is the only person to access or give permission to access their records.

A complete MedeFile file is comprised of copies of the member's actual medical records as well as a Digital Health Profile (DHP), which is an overview of the patient's and his family's medical history. In addition, every MedeFile member receives a MedeDrive, an external USB drive which stores all of a patient's Emergency Medical Information as well as a copy of the member's MedeFile.

MedeFile's Emergency Medical Information (EMI) Card

Upon becoming a MedeFile member each individual will receive a Membership / Emergency Medical Information (EMI) Card which contains instructions on how to contact MedeFile in order to retrieve the member's medical records.

The Digital Health Profile (DHP)

A part of a member's MedeFile is their Digital Health Profile (DHP). This form is completed by the patient in order to provide a summary of the patient's healthcare history which assists healthcare providers in understanding the patient's course of medical treatment. This document, along with Advanced Directives and medical record copies, complete the documents contained in the patient's MedeFile.

MedeDrive

The MedeDrive is an external USB drive which stores all of a patient's Emergency Medical Information and their MedeFile which can be viewed on a personal computer. MedeDrive self loads its own viewer, so no special program or software is required. The MedeDrive easily plugs into any PC USB port on most Windows-based computers built in the last four years. (Macintosh version is currently unavailable). The MedeDrive USB key can be updated easily and as frequently as the member desires at no additional cost.

MedeVault

The MedeVault is designed to serve as an electronic data and document repository that incorporates state-of-the-art security features in order to prevent unauthorized access to a patient's records. Access to the MedeVault is provided through an encrypted connection to a web service run by Medefile. This connection is provided by Secure Sockets Layer (SSL) technology.

Medefile Clinical Information Systems (CIS)

Medefile CIS is a Business-to-Business professional consulting service that is designed to generate revenue from two primary sources: consulting engagements and product commissions.

Medefile CIS intends to offer a full range of HIPPA assessment and compliance services. Medefile CIS' goal is to facilitate the transition to HIPAA compliance. In addition, Medefile CIS intends to offer services that will enable medical facilities to transition from paper-based medical records to electronic medical records. Medefile CIS plans to digitize medical facility offices and offer software to keep the records up-to-date, index the records, and make them queryable based on each facility's specific needs.

Medefile consulting engagements are generally fixed-price and fixed scope projects that also generate occasional time-and-materials income from ongoing support and training activities related to its services. In addition, Medefile CIS intends to resell technology from various vendors as needed and may incur commission revenue and revenue from the markup of these products.

Medefile CIS will offer several services, including the evaluation of the record keeping, security, and back office practices. After evaluation is complete, Medefile CIS staff will move forward to implement their own remediation plans for the client. Other revenue streams may be created based on the licensing of the OmniViewer for the digitized records as well as the scanning software for those facilities wishing to implement a "go-forward" scanning system. Finally, the clients may be charged a contractual support fee for ongoing technical support and updates, which may be assessed on an annual basis.

MedeMinder

MedeMinder is MedeFile’s reminder service. The member tells us when and where to call, and we automatically contact the member day or night with an appropriate reminder, spoken by real people. The member can even choose the voice they want to hear. MedeMinder helps insure the member will not miss an appointment or forget to take their medication.

SecurMed

SecurMed is designed to serve as an authentication process that protects against any information being viewed by unauthorized persons.

Members

As of May 16, 2011, we had approximately 12,902 members. The Company’s marketing strategy includes issuing trial memberships on several levels.

Sales and Marketing

We intend to employ the following marketing strategies in order to generate awareness of our products and services: direct sales, direct mail, a public relations campaign, speaking engagements by our executive officers, participation in trade shows, and alliances and partnerships with third parties.

Our marketing strategy will target the following types of organizations: Health Maintenance Organizations, Preferred Provider Organizations, managed care organizations, insurance companies, unions, large groups of individuals such as AARP, large and medium sized corporations, nursing homes, and internet users.

In particular, the MedeFile service is designed to be sold in several distinct ways:

·	MedeFile Website - Through normal e-commerce mechanisms, patients may enroll in the service directly from the MedeFile website. Membership may be purchased on an annual basis and may be paid all at once, or over time at the patient's discretion.

·	Physician Referrals - Patients may enroll based on a doctor's referral. In the event that these physicians are also Medefile CIS customers, they may easily transfer their patients' information into the MedeFile system.

Large group offerings (e.g., AARP, trade unions) - Large, membership-driven organizations may offer the MedeFile system to their members at a discounted rate, which may be negotiated with us based on the size of the expected enrollment. An additional promotional advantage may be derived from the use of MedeFile through the website of the client organization, allowing members to access MedeFile using each organization's site.

·	Insurance companies - Similar to large group offerings identified above, insurance companies may offer the MedeFile service to their insured as a means to decrease the cost of medical care.

Technology

We use and continue to update the most advanced security measures available. Data transmitted between Web browsers and Web servers over the Internet using TCP/IP is generally susceptible to unauthorized interception. To protect sensitive data, the most common method of protection is data encryption. We use the industry standard Secure Sockets Layer (SSL), which is a mechanism to secure Internet traffic so that it cannot be intercepted. SSL utilizes digital certificates to verify the identity and integrity of a web site (such as MedeFile) and to protect the security of transactions by certifying their source and destination.

Competition

There are other companies working in the medical information technology arena such as GE Healthcare, Bio-Imaging Technologies, and Cyber Records. Some competing companies offer a USB key for medical record storage but require the customer to provide or "self-populate" the information to be stored. The information in a self-populated record is limited and is only as accurate as the individual's memory and understanding of their health condition. Other companies expect each customer to obtain their own medical records from their various healthcare providers. Some offer a CD-Rom for record storage. Usually, the CD-Rom cannot be updated with any changes to an individual's medical status or treatment. Therefore, a new CD-Rom needs to be obtained from that company in order for the individual to have the most current, accurate information regarding their health. There are companies that are solely web-based that do not provide the customer the capability to have a copy of their records. In this case, an internet connection is required to view stored documents. In addition, there are companies that do not concentrate on digitizing an individual's medical records but on converting medical facilities' records from paper to electronic format.

The advantage to being a MedeFile member is that we gather, consolidate, organizes and securely stores each member's actual medical records on their behalf. The MedeFile membership includes a Digital Health Profile (DHP) which contains the member's general health history, emergency contacts, doctor contacts, family medical history, allergies, medications, and current conditions. A MedeFile membership also includes a MedeDrive which easily plugs into any PC USB port on most Windows-based computers built in the last four years (Macintosh version is currently not available yet). The MedeDrive contains the member's emergency medical information that can be easily accessed by emergency care personnel, and the client's actual medical records which are stored in a secure area of the subscriber's MedeFile. The MedeDrive USB key can be updated easily and as frequently as the member desires at no additional cost.

Employees

From our inception through the period ended March 31, 2011, we have primarily relied on the services of outside consultants. As of March 31, 2011, MedeFile had a total of 4 full time employees and 4 consultants.

We believe our relations with our employees favorable.

Website Development

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

RESULTS OF OPERATIONS

Three Months Ending March 31, 2011 Compared To Three Months Ending March 31, 2010.

Revenues

Revenues for the quarter ended March 31, 2011 totaled $132,102, an increase of $129,743 compared to revenues of $2,359 during the quarter ended March 31, 2010. 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. The increase in memberships during the quarter ended March 31, 2011 is a result of increased marketing and advertising efforts by the Company during that quarter. Revenues received from memberships are expensed through the period of the membership and therefore revenue recognized represents a fraction of the membership in the quarter being reported.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the quarter ended March 31, 2011 totaled $379,120, an increase of $299,945, or approximately 378.8%, compared to selling, general and administrative expenses of $79,175 for the quarter ended March 31, 2010. The overall increase in the total selling, general and administrative expenses is primarily due to increased costs associated with attracting new members, sales expenses, and business development expenses.

Marketing Expense

Marketing expense for the quarter ended March 31, 2011 totaled $129,854, compared to $0 for the quarter ending March 31, 2010. The increase in marketing expenses was due to the Company’s effort to create a marketing plan aimed at generating new members. The Company relies on one source for generation of leads through the Company’s telemarketing efforts to increase revenues.

Depreciation Expense

Depreciation expenses totaled $2,600 for the quarter ended March 31 2011, compared to depreciation expense of $4,250 during the quarter ended March 31, 2010. The decrease in depreciation was due to certain assets becoming fully depreciated.

Amortization Expense

Amortization expenses for the quarter ended March 31, 2011 totaled $5,245, compared to $0 for the quarter ended March 31, 2010. Amortization expenses consist of the expensing of website development through May 2013. Amortization began in the second quarter of 2010 and will be expensed at $5,245 per quarter over a three-year period.

Interest Expense

There was no net interest expense for the quarter ended March 31, 2011. This represents a decrease of $9,475 as compared to the interest expense of $9,475 during the quarter ended March 31, 2010. The decrease was due to the payment of note payables during 2010.

Net Loss

For the reasons stated above, our net loss for the three months ended March 31, 2011 was $448,193, or $0.00 per basic and diluted share, an increase of $357,652 when compared to a net loss of $90,541, or $0.00 per basic and diluted share, during the quarter ended March 31, 2010.

FINANCIAL CONDITION

Liquidity and Capital Resources

As of March 31, 2011, we had cash and cash equivalents of $388,398, inventory of $20,418, accounts receivable of $3,991 and merchant service reserves of $10,950. Net cash used in operating activities for the three months ended March 31, 2011 was $339,454. Our current liabilities of $278,755 consisted of $257,269 for accounts payable and accrued liabilities, cash overdraft of $13,947 and deferred revenues of $7,539. We have working capital of $145,002.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2011 or as of the date of this report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

Evaluation of 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, Financial and Accounting 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, Financial and Accounting Officer) concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and which also are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer (Principal Executive, Financial and Accounting Officer), to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 1A. Risk Factors.

Not Applicable.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed & Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits.

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

31.1

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 Financial Officer

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.

	MEDEFILEINTERNATIONAL, INC.

May 16, 2011	By:	/s/ Kevin Hauser
		Kevin Hauser
		President, Chief Executive Officer, Acting Chief Financial Officer and Director (Principal Executive Officer and Principal Financial Officer)