-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JmEh7RBfWQqknD0QITgfelqu4camtunib6wr1c8OSTEVVlD083uAqygbv+aU+mYT DfNE2NkNY0/TB9n0+YB0Wg== 0001013762-06-002239.txt : 20061114 0001013762-06-002239.hdr.sgml : 20061114 20061114164259 ACCESSION NUMBER: 0001013762-06-002239 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060930 FILED AS OF DATE: 20061114 DATE AS OF CHANGE: 20061114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Medefile International, Inc. CENTRAL INDEX KEY: 0000842013 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 850368333 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 033-25126-D FILM NUMBER: 061215993 BUSINESS ADDRESS: STREET 1: 2 RIDGEDALE AVENUE STREET 2: SUITE 217 CITY: CEDAR KNOLLS STATE: NJ ZIP: 07927 BUSINESS PHONE: (973) 993-8001 MAIL ADDRESS: STREET 1: 2 RIDGEDALE AVENUE STREET 2: SUITE 217 CITY: CEDAR KNOLLS STATE: NJ ZIP: 07927 FORMER COMPANY: FORMER CONFORMED NAME: OMNIMED INTERNATIONAL, INC. DATE OF NAME CHANGE: 20051122 FORMER COMPANY: FORMER CONFORMED NAME: BIO SOLUTIONS INTERNATIONAL INC DATE OF NAME CHANGE: 20010214 FORMER COMPANY: FORMER CONFORMED NAME: SEPTIMA ENTERPRISES INC DATE OF NAME CHANGE: 19920703 10QSB 1 sept30200610qsb.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D. C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2006 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission file number 33-25126-D Medefile International, Inc. (Exact name of small business issuer as specified in its charter) Nevada 85-0368333 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2 Ridgedale Avenue, Suite 217 Cedar Knolls, NJ 07927 (Address of principal executive offices) (973) 993-8001 (Issuer's telephone number) Copies to: Richard A. Friedman, Esq. Sichenzia Ross Friedman Ference LLP 1065 Avenue of the Americas New York, New York 10018 Phone: (212) 930-9700 Fax: (212) 930-9725 Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes [ ] No [X] The number of shares of the issuer's outstanding common stock on November 6, 2006 was 178,733,910. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] MEDEFILE INTERNATIONAL, INC. FORM 10-QSB For the Fiscal Quarter Ended September 30, 2006 Part I Page Item 1. Financial Statements. F-1 Item 2. Management's Discussion and Analysis or Plan of Operations. 3 Item 3. Controls and Procedures 9 Part ll Item 1. Legal Proceedings. 10 Item 2. Unregistered Sale of Equity Securities and Use of Proceeds 10 Item 3. Defaults Upon Senior Securities 10 Item 4. Submission of Matters to a Vote of Security Holders. 10 Item 5. Other Information 10 Item 6. Exhibits. 10 Signatures. 11 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
Medefile International, Inc. Condensed Consolidated Balance Sheet (Unaudited) September 30, 2006 ------------- Assets Current assets Cash and cash equivalents (Note 1) $ 247,423 Marketable securities (Note 1) 960 Prepaid expenses (Note 2) 18,125 ------------- Total current assets 266,508 Deposits and other assets 2,785 Furniture and equipment, net of accumulated depreciation of $103,600 (Note 3) 56,512 Intangibles, net of accumulated amortization of $56,849 - ------------- Total assets $ 325,805 ============= Liabilities and Stockholders' Deficit Current liabilities Accounts payable and accrued liabilities $ 1,200 Deferred revenue 11,817 ------------- Total current liabilities 13,017 Loan payable - related party (Note 4) 1,648,805 Commitments and Contingencies - Stockholders' Deficiency: Common stock, $0.001 par value; 300,000,000 shares authorized; 178,733,910 shares issued and outstanding September 30, 2006 (Note 5) 17,873 Additional paid-in capital 5,903,189 Deferred Compensation (Note 5) (2,903,557) Accumulated deficit (4,354,116) Accumulated other comprehensive gain (loss) 594 ------------- Total stockholder's deficit (1,336,017) ------------- Total liabilities and stockholders' deficit $ 325,805 =============
The accompanying notes are an integral part of these condensed consolidated financial statements. F-1
Medefile International, Inc. Condensed Statements of Operations (Unaudited) For the Three For the Three For the Nine For the Nine Months Ended Months Ended Months Ended Months Ended September 30, September 30, September 30, September 30, 2006 2005 2006 2005 ------------ ------------ ------------- ------------- Revenue $ 15,833 $ (0)$ 32,135 $ (0) Operating expenses: Selling, general and administrative expenses 868,445 116,645 2,547,613 353,274 Impairment of intangible assets - 0 - - Depreciation and amortization expense 6,968 0 21,522 27,049 ------------ ------------ ------------- ------------- Total operating expenses 875,413 116,645 2,569,135 380,323 Loss from operations (859,580) (116,645) (2,537,000) (380,323) Other expense: Interest and dividend income (expense) (24,501) (1,591) (58,328) (1,344) ------------ ------------ ------------- ------------- Total other income (expense) (24,501) (1,591) (58,328) (1,344) Loss before income taxes (884,081) (118,236) (2,595,328) (381,667) Provision for income taxes - - - - ------------ ------------ ------------- ------------- Net loss $ (884,081) $ (118,236)$ (2,595,328)$ (381,667) Other comprehensive gain (loss): Unrealized gain on equity securities - 0 594 112 ------------ ------------ ------------- ------------- Comprehensive loss $ (884,081) $ (118,236)$ (2,594,734)$ (381,555) ============ ============ ============= ============= Net loss per share - basic and diluted $ 0.005 $ 0.23 $ 0.015 $ 0.88 ============ ============ ============= ============= Weighted average shares outstanding - basic and diluted 178,733,910 520,679 178,733,910 434,942 ============ ============ ============= =============
The accompanying notes are an integral part of these condensed consolidated financial statements. F-2
Medefile International, Inc. Condensed Statements of Cash Flows (Unaudited) For the Nine For the Nine Months Ended Months Ended September 30, September 30, 2006 2005 -------------- -------------- Cash flows from operating activities: Net loss $ (2,595,328) $ (381,667) Other comprehensive gain (loss) 594 0 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 21,524 27,049 Non cash compensation 1,778,621 - Interest expense 65,702 1,259 Changes in operating assets and liabilities: Prepaid expenses (18,125) 3,331 Marketable securities (960) Expenses paid by loan from stockholder 0 31,893 Expenses incurred in exchange for common stock 0 6,181 Accounts payable and accrued expenses (26,800) (6,213) Deferred revenue 6,922 0 -------------- -------------- Net cash used in operating activities (767,850) (319,064) Cash flows from investing activities: Purchase of equipment (5,233) (2,490) -------------- -------------- Net cash used in investing activities (5,233) (2,490) Cash flows from financing activities: Proceeds from loans by related parties 750,000 500,000 Common stock issued for cash - - Expenses paid by thrid party - - -------------- -------------- Net cash provided by financing activities 750,000 500,000 Net increase (decrease) in cash and cash equivalents (23,083) 178,446 Cash and cash equivalents at beginning of period 270,506 7,571 -------------- -------------- Cash and cash equivalents at end of period $ 247,423 $ 184,518 ============== ============== Supplemental disclosures of cash flow information: Cash paid during the period for: -------------- -------------- Interest $ - $ - ============== ============== -------------- -------------- Taxes $ - $ - ============== ============== Interest capitalized on note payable to related party $ 45,415 ============== ============== -------------- -------------- Value of options issued to employees $ 4,526,385 $ - ============== ============== -------------- -------------- Value of warrants issued to consultants $ 155,793 $ - ============== ==============
The accompanying notes are an integral part of these consensed financial statements. F-3 MEDEFILE INTERNATIONAL INC. NOTES TO CONDENSED CONSOLIDATED 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 ("Company"), have been prepared in accordance with the instructions to Form 10-QSB 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 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, 2005. In the opinion of management, these 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, 2006, and the results of operations and cash flows for the nine months ended September 30, 2006 and 2005. The results of operations for the three months and nine months ended September 30, 2006 are not necessarily indicative of the results that may be expected for the entire fiscal year. Certain amounts in the prior period on the Statements of Cash Flows have been changed to conform to the current period presentation. Nature Of Business Operations - ----------------------------- On November 1, 2005, Medefile International, Inc. ("Medefile") 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 Medefile, OmniMed International, Inc., a Nevada corporation ("OmniMed"), and the shareholders of OmniMed (the "OmniMed Shareholders"). Pursuant to the Agreement, Medefile acquired all of the outstanding equity stock of OmniMed from the OmniMed Shareholders. As consideration for the acquisition of OmniMed, Medefile agreed to issue 9,894,900 shares of Medefile' 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 Medefile. Effective November 21, 2005 Medefile changed its name to OmniMed International, Inc. Effective January 17, 2006, OmniMed changed its name to Medefile International, Inc. ("Medefile" or "the Company"). Medefile has developed a system for gathering, digitizing, storing and distributing information for the healthcare field. Medefile's goal is to revolutionize the medical industry by bringing 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 in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has reported a net loss of $884,081 and $2,594,734 for the three and nine month periods ended September 30, 2006 had an accumulated deficit of $4,354,116 as of September 30, 2006. The Company used $767,850 of cash for operating activities during the nine months ended September 30, 2006. Cash provided by financing activities for the nine months ended September 30, 2006 was $750,000, consisting of net proceeds from related party loans. F-4 MEDEFILE INTERNATIONAL INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Our registered independent certified public accountants have stated in their report dated April 17, 2006, 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 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. 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. EITF No. 00-21 became effective for revenue arrangements entered into in periods beginning after June 15, 2003. For revenue arrangements occurring on or after August 1, 2003, the Company revised its revenue recognition policy to comply with the provisions of EITF No. 00-21. Investments - ----------- The Company's investments in marketable securities are classified as "available for sale" securities, and are carried on the financial statements at market value. Realized gains and losses are included in earnings; unrealized gains and losses are reported as a separate component of stockholders' equity and as a component of "Other Comprehensive Income." 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. The Company adopted SFAS 123 (R) using the modified prospective transition method, which required the application of the accounting standard as of January 1, 2006. Medefile's Consolidated Financial Statements as of and for three months September 30, 2006 reflect the impact of SFAS 123(R). In accordance with the modified prospective transition method, the Company's Consolidated Financial Statements for the prior periods have not been restated to reflect, and do not include the impact of SFAS 123 (R). Stock based compensation expense recognized under SFAS 123 (R) for the three and nine months ended September 30, 2006 was $565,337 and $1,690,580, respectively. Pro forma stock based compensation was $0 for the three months ended September 30, 2005. 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. F-5 A summary of option activity under the Plan as of September 30, 2006, and changes during the period then ended are presented below: Weighted- Options Price Average Exercise Outstanding at December 31, 2005 150,000 $ 1.17 Issued 5,640,000 0.80 Exercised -- -- Forfeited or expired (150,000) (1.17) --------- --------- Outstanding at March 31, 2006 5,640,000 $ 0.80 Issued -- -- Exercised -- -- Forfeited or expired -- -- --------- --------- Outstanding at June 30, 2006 5,640,000 $ 0.80 Issued 20,000 2.00 Exercised -- -- Forfeited or expired -- -- --------- --------- Outstanding at September 30, 2006 5,660,000 $ 0.81 Non-vested at September 30, 2006 3,545,000 $ 0.80 Exercisable at September 30, 2006 2,115,000 $ 0.82 The options outstanding as of September 30, 2006 have been segregated into two ranges 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 3.25 2,115,000 $ 0.80 $2.00 20,000 $ 2.00 1.86 -- $ 2.00 ============= =========== ============ ============ ========= Total 5,660,000 $ 0.81 2.55 2,115,000 $ 0.80 Aggregate intrinsic value of options outstanding and options exercisable at September 30, 2006 was ($80,600) and ($21,150), respectively. Aggregate intrinsic value represents the difference between the Company's closing stock price on the last trading day of the fiscal period, which was $0.79 as of September 30, 2006, and the exercise price multiplied by the number of options outstanding. The modified transition method of SFAS 123 (R) requires the presentation of pro forma information for periods presented prior to the adoption of SFAS 123 (R) regarding net loss an net loss per share as if we had accounted for our stock plans under the fair value method of SFAS 123 (R). For pro forma purposes, the fair value of stock options was estimated using the Black-Scholes option valuation model and amortizing on a straight-line basis. The pro forma amounts are not shown since the company was not publicly traded as of September 30, 2005. F-6 Reclassifications - ----------------- Certain reclassifications have been made in prior year's financial statements to conform to classifications used in the current year. 2. PREPAID EXPENSES Prepaid expenses of $18,125 at September 30, 2006 consists of prepaid insurance. 3. FURNITURE AND EQUIPMENT Furniture and equipment consists of the following at September 30, 2006: Computers and office equipment $ 121,495 Furniture and fixtures 38,617 ----------- Subtotal $ 160,112 Less: Accumulated depreciation (103,600) ----------- Total $ 56,512 =========== 4. LOAN PAYABLE - RELATED PARTY The Company has a loan payable due to a major stockholder of the Company and an entity under this stockholder's control. During the nine months ended September 30, 2006, the Company negotiated an extension of the due date of this loan to January 1, 2008. The loan bears interest at the rate of seven percent. During the three months and nine month ended September 30, 2006, the Company charged interest of $24,501 and $58,328, respectively, under the related party loan. At September 30, 2006, the Company had an outstanding loan payable totaling $1,648,805. 5. EQUITY Common Stock - ------------ On January 20, 2006, the Company paid an in-kind dividend of 14 shares of common stock for each share of common stock held by shareholders of record at the close of business on January 16, 2006. There were 11,915,594 shares of common stock outstanding immediately before the in-kind dividend. A total of 166,818,316 shares of common stock were issued pursuant to the in-kind dividend, and there were 178,733,910 shares of common stock outstanding immediately after the in-kind dividend. Warrants - -------- On June 19, 2006 the Company issued 200,000 warrants to consultants for services to be provided. The warrants vest in 50,000 increments on June 19, 2006; September 18, 2006, December 17, 2006 and March 17, 2007. The Company charged the fair value of these warrants of $155,793 to deferred compensation. The Company charged to operations the amount of $40,655 and $88,041, during the three and nine months ended September 30, 2006, representing the portion of these warrants that vested during the period. The unvested portion, value at $67,752, remains in deferred compensation on the Company's balance sheet at September 30, 2006, and will be charge to operations in the quarter which the warrants vest. F-7 The following table summarizes the changes in warrants outstanding and the related prices. These warrants were granted in addition to cash compensation for services to be performed. 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 3.72 $3.50 50,000 3.72 5.00 50,000 3.72 5.00 50,000 3.72 6.50 50,000 3.72 6.50 -- 3.72 8.00 50,000 3.72 8.00 -- 3.72 ----------- ------------ ----------- ----------- 200,000 3.72 100,000 3.72 =========== ============ =========== =========== Transactions involving warrants are summarized as follows: Number of Weighted Average Warrants Price Per Share ---------- --------------- Outstanding at December 31, 2005 -- -- Granted 200,000 5.75 Exercised -- -- Canceled or expired -- -- ---------- -------- Outstanding at June 30, 2006 200,000 5.75 Granted -- -- Exercised -- -- Cancelled or expires -- -- ---------- -------- Outstanding at September 30, 2006 200,000 5.75 ========== ======== 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: Significant assumptions (weighted-average): Risk-free interest rate at grant date 4.75% Expected stock price volatility 86.05% Expected dividend payout ----- Expected option life-years 4 During the three months and nine months ended September 30, 2006, the Company amortized the amount of $40,655 and $88,041, respectively, to non-cash compensation. At September 30, 2006, the remaining unamortized amount of $67,752 remains in deferred compensation. Options - ------- In January 2006, the Company issued stock options to employees to which vest ratably over a two year period, and charged the fair value of these options of $4,500,978 to deferred compensation. During the three months ended September 30, 2006, the Company issued stock options to a board member which vest ratably over a two-year period. The Company charged the fair value of these options of $25,407 to deferred compensation. During three and nine months ended September 30, 2006, the Company amortized the amount of $565,337 and $1,690,580, respectively, to non-cash compensation. At September 30, 2006, the remaining unamortized amount of $2,835,805 remains in deferred compensation. F-8 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 weather-related factors, introduction and customer acceptance of new products, the impact of competition and price erosion, as well as supply and manufacturing restraints and 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, 2005 filed with the Securities and Exchange Commission on April 17, 2006. The following discussion should be read in conjunction with our consolidated financial statements provided in this quarterly report on Form 10-QSB. 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"). Overview of Business - -------------------- Medefile has developed a system for gathering, digitizing, storing and distributing information for the healthcare field. Medefile's goal is to revolutionize the medical industry by bringing 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 has created a system for gathering and digitizing medical records so that individuals can have a comprehensive record of all of their medical visits. Medefile's primary product is the MedeFile system, a 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. 3 Industry Overview - ----------------- Since the beginning of modern medicine, information about a patient's history, testing, treatment and care have been key ingredients in the provision 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 2 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 typically 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 health care 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 able 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. 4 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 internet connection to a web service maintained 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. 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 plans to 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. One aspect of these plans may include OmniScan, a component of CIS, which would produce additional revenue by scanning existing paper-based medical records and converting them to a secure, more efficient digital format. Furthermore, the Company's management believes that opportunities exist to create additional revenue 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. OmniScan Medefile's OmniScan service is designed to enable medical facilities to convert their paper based medical records into a digital format. Medefile CIS intends to license the software which allows for electronic records to be viewed at various facility locations. In addition, the OmniScan service is designed to provide the following advantages: high quality images, high-speed conversion, record keeping in a single location, simultaneous use of files, and simplified release of information. 5 SecurMed SecurMed is designed to serve as an authentication process that protects against any information being viewed by unauthorized persons. Members - ------- As of November 13, 2006, MedeFile had over 300 members. Sales and Marketing - ------------------- Medefile intends to employ the following marketing strategies in order to generate awareness of Medefile's products and services: direct sales, direct mail, a public relations campaign, including radio and television infomercials, speaking engagements by Medefile's executive officers, participation in trade shows, and alliances and partnerships with third parties. Medefile's marketing strategy is designed to target the following types of organizations and market segments: Health Maintenance Organizations, Preferred Provider Organizations, managed care organizations, insurance companies, unions, large groups of individuals such as AARP, large and medium sized corporations, home healthcare agencies, retirement communities, nursing homes, public and private schools, summer camps and internet users. In particular, the MedeFile service is designed to be sold in several distinct ways: o 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. o 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. o 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 Medefile 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. Hence, MedeFile functionality may be accessed using each organization's site. o Insurance companies - Similar to large group offerings identified above, insurance companies will be able to offer the MedeFile service to their insured as a means to decrease the cost of medical care. Technology Medefile will 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. MedeFile will 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. 6 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 MedeFile gathers, consolidates, 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 unavailable). The MedeDrive contains the member's emergency medical information which 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 - --------- As of September 2006, Medefile had a total of five employees, including four full time and one part time employee. RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2005 Revenues - -------- Revenues for the quarter ended September 30, 2006 totaled $15,833, an increase of $15,833 compared to revenues of $0 during the three months ended September 30, 2005. During the three months ended September 30, 2005, the Company had recognized no revenue as we had not yet emerged from the development stage. General and Administrative Expenses - ----------------------------------- General and administrative expenses for the quarter ended September 30, 2006 totaled $868,445, consisting primarily of compensation, marketing costs and professional fees. This was an increase of $751,800 or 645% compared to general and administrative expenses of $116,645 for the quarter ended September 30, 2005. The primary reason for the increase was an increase in non-cash compensation of $605,992 representing the cost of employee options and warrants vested during the period. 7 Depreciation Expense - -------------------- Depreciation and amortization expense totaled $6,968 for the quarter ended September 30, 2006, an increase of $6,968 compared to depreciation and amortization expense of $0 during the quarter ended September 30, 2005. Interest Expense - ---------------- Interest expense for the quarter ended September 30, 2006 was $24,501,an increase of $22,910 or 1,440% compared to interest expense of $1,591 during the quarter ended September 30, 2005. The reason for the increase was an increase in the average amount of the related party loan outstanding during the quarter ended September 30, 2006. Net Loss - -------- For the reasons stated above, our net loss for quarter ended September 30, 2006 was $884,081 or $0.005 per share, an increase of $765,845 or 648% compared to a net loss of $118,236 or $0.23 per share during the three months ended September 30, 2005. NINE MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2005 Revenues - -------- Revenues for the nine months ended September 30, 2006 totaled $32,135, an increase of $32,135 compared to revenues of $0 during the nine months ended September 30, 2005. During the nine months ended September 30, 2005, the Company had recognized no revenue as we had not yet emerged from the development stage. General and Administrative Expenses - ----------------------------------- General and administrative expenses for the nine months ended September 30, 2006 totaled $2,547,613, consisting primarily of compensation, marketing costs and professional fees. This was an increase of $2,194,339 or 621% compared to general and administrative expenses of $353,274 for the nine months ended September 30, 2005. The primary reason for the increase was an increase in non-cash compensation of $1,778,622 representing the cost of employee options and warrants vested during the period. 7 Depreciation and amortization - ----------------------------- Depreciation and amortization expense was $21,522 for the nine months ended September 30, 2006, a decrease of $5,527 compared to depreciation and amortization expense of $27,049 during the nine months ended September 30, 2005. The reason for the decrease is the complete amortization of certain of the Company's assets at September 30, 2006. Interest Expense - ---------------- Interest expense for the nine months ended September 30, 2006 was $58,328, an increase of $56,984 or 4,240% compared to interest expense of $1,344 during the nine months ended September 30, 2005. The reason for the increase was the increase in the average amount of the related party loan outstanding during the nine months ended September 30, 2006. Net Loss - -------- For the reasons stated above, our net loss for nine months ended September 30, 2006 was $2,595,328 or $0.015 per share, an increase of $2,213,661 or 580% compared to a net loss of $381,667 or $0.88 per share during the nine months ended September 30, 2005. Liquidity and Capital Resources - ------------------------------- As of September 30, 2006 we had cash and cash equivalents of $247,423. Our current liabilities as of September 30, 2006 aggregated $13,017. Working capital at September 30, 2006 was $253,491. We had an accumulated deficit of $4,354,116 and stockholders' deficiency of $1,336,017 at September 30, 2006. The Company used $767,850 of cash for operating activities during the quarter ended September 30, 2006. Cash used in investing activities for the quarter ended September 30, 2006 was $5,233. Cash provided by financing activities for the quarter ended September 30, 2006 was $750,000, consisting of $750,000 of proceeds from loans by related parties. Our registered independent certified public accountants have stated in their report dated April 7, 2006, 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. Off Balance Sheet Arrangements - ------------------------------ We do not have any off balance sheet arrangements as of December 31, 2005 or as of the date of this report. Critical Accounting Policies - ---------------------------- The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. 8 We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements; we believe the following critical accounting policy involves the most complex, difficult and subjective estimates and judgments: 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. The Company adopted SFAS 123 (R) using the modified prospective transition method, which required the application of the accounting standard as of January 1, 2006. Medefile's Consolidated Financial Statements as of and for three months September 30, 2006 reflect the impact of SFAS 123(R). In accordance with the modified prospective transition method, the Company's Consolidated Financial Statements for the prior periods have not been restated to reflect, and do not include the impact of SFAS 123 (R). Stock based compensation expense recognized under SFAS 123 (R) for the three and nine months ended September 30, 2006 was $565,337 and $1,690,580, respectively. Pro forma stock based compensation was $0 for the three months ended September 30, 2005. Item 3. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures We maintain "disclosure controls and procedures," as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us 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 Commission's rules and forms. (b) Changes in Internal Controls over financial reporting There have been no changes in our internal controls over financial reporting during our last three months, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. (c) Limitations on Effectiveness of Disclosure Controls and Procedures Disclosure controls and procedures cannot provide absolute assurance of achieving financial reporting objectives because of their inherent limitations. Disclosure controls and procedures is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Disclosure controls and procedures also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by disclosure controls and procedures. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. 9 PART II - OTHER INFORMATION Item 1. Legal Proceedings Medefile is not a party to any pending legal proceeding, nor is its property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of Medefile's business. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None. 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 and Reports on Form 8-K a. Exhibit Index 31.1 Certification by Chief Executive Officer and Chief Financial Officer, required by Rule 13a- 14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification by Chief Executive Officer and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 10 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. /s/ Milton Hauser ----------------- Milton Hauser President, Chief Executive Officer, Acting Chief Financial Officer and Director (Chief Executive Officer and Chief Financial Officer) 11 EX-31 2 ex311.txt EXHIBIT 31.1 CERTIFICATIONS I, Milton Hauser, President, Chief Executive Officer, and Acting Chief Financial Officer of Medefile International, Inc., certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB of Medefile International, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any changes in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: November 14, 2006 /s/ Milton Hauser - ----------------- Milton Hauser President, Chief Executive Officer, and Acting Chief Financial Officer EX-32 3 ex321.txt EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Medefile International, Inc. (the "Company") on Form 10-QSB as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge: (1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 14, 2006 /s/ Milton Hauser - ----------------- Milton Hauser President, Chief Executive Officer, and Acting Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----