10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2016

  OR

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

For the transition period from ____________ to __________

Commission File Number 033-25126-D

MedeFile International, Inc.

(Exact name of registrant as specified in its charter)

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

301 Yamato Rd, Suite 1200

Boca Raton, FL  33431

(Address of principal executive offices) (Zip Code)

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

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

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

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒

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

Number of shares outstanding of registrant’s common stock, par value $0.0001: 28,756,010 as of August 10, 2016.

Table of Content

	Page
PART I
FINANCIAL INFORMATION	1
ITEM 1. Financial Statements	1
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	11
ITEM 4. Controls and Procedures	11
PART II
OTHER INFORMATION	12
ITEM 1. Legal Proceedings	12
ITEM 1A. Risk Factors	12
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	12
ITEM 3. Defaults Upon Senior Securities	12
ITEM 4. Mine Safety Disclosures	12
ITEM 5. Other Information	12
ITEM 6. Exhibits	12
Signatures	13

Item 1. Financial Statements.

MedeFile International, Inc.

Consolidated Balance Sheets

(Unaudited)

	June 30,			December 31,
	2016			2015
Assets
Current assets
Cash	$	21,403		$	38,371
Accounts receivable		-			4,965
Merchant services reserve		2,938			2,938
Total assets	$	24,341		$	46,274
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable and accrued liabilities	$	38,715		$	14,857
Note payable - related party		177,720			-
Convertible debenture - related party		16,459			15,681
Deferred revenues		350			439
Derivative liability convertible note		19,122			19,067
Total current liabilities		252,366			50,044
Stockholders' deficit
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding		-			-
Common stock, $.0001 par value: 700,000,000 authorized; 28,756,010 and 28,756,010 shares issued and outstanding on June 30, 2016 and December 31, 2015, respectively		2,875			2,875
Additional paid-in capital		28,504,754			28,504,754
Accumulated deficit		(28,735,654	)		(28,511,399	)
Total stockholders' deficit		(228,025	)		(3,770	)
Total liabilities and stockholders' deficit	$	24,341		$	46,274

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

1

MedeFile International, Inc.

Consolidated Statements of Operations

(Unaudited)

	For the			For the			For the			For the
	three months			three months			six months			six months
	ended			ended			ended			ended
	June 30,			June 30,			June 30,			June 30,
	2016			2015			2016			2015
Revenue	$	10,498		$	12,742		$	15,493		$	25,330
Cost of revenue
Cost of revenue		-			279			-			595
Gross profit		10,498			12,463			15,493			24,735
Operating expenses
Selling, general and administrative expenses		119,372			274,118			236,195			439,724
Depreciation and amortization expenses		-			22,149			-			44,299
Total operating expenses		119,372			296,267			236,195			484,023
Loss from operations		(108,874	)		(283,804	)		(220,702	)		(459,288	)
Other income (expenses)
Interest expense		(2,605	)		(352	)		(3,498	)		(2,393	)
Change in fair value of derivative liabilities		(5,509	)		30,213			(55	)		(3,030	)
Change in derivative liability - warrant		-			-			-			51
Total other income (expense)		(8,114	)		29,861			(3,553	)		(5,372	)
Net loss	$	(116,988	)	$	(253,943	)	$	(224,255	)	$	(464,660	)
Net loss per share: basic and diluted	$	(0.00	)	$	(0.02	)	$	(0.01	)	$	(0.02	)
Weighted average share outstanding: basic and diluted		28,756,010			13,777,618			28,756,010			20,487,123

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

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MedeFile International, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	For the			For the
	six months			six months
	ended			ended
	June 30,			June 30,
	2016			2015
Cash flows from operating activities
Net income (loss)	$	(224,255	)	$	(464,660	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		-			44,299
Stock based compensation		-			111,000
Change in derivative liabiliy - convertible debenture		55			3,030
Change in derivative liabiliy - warrants		-			(51	)
Changes in operating assets and liabilities
Accounts receivable		4,965			1,499
Inventory		-			596
Prepaid expense		-			5,709
Accounts payable and accrued liabilities		23,858			601
Accrued interest - convertible debenture		779			2,393
Accrued interest - note payable		2,719			-
Deferred revenue		(89	)		218
Net cash used in operating activities		(191,968	)		(295,366	)
Cash flow from financing activities
Proceeds from note payable - related party		175,000			-
Payment on convertible note		-			(70,000	)
Proceeds from common stock subscriptions		-			620,000
Net cash provided by financing activities		175,000			550,000
Net increase (decrease) in cash and cash equivalents		(16,968	)		254,634
Cash and cash equivalents at beginning of period		38,371			36,170
Cash and cash equivalents at end of period	$	21,403		$	290,804
Supplemental disclosure of cash flow information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
Noncash investing and financing activities
Stock issued for conversion of debt	$	-		$	40,000

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

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MedeFile International, Inc.

Notes to Unaudited Consolidated Financial Statements

1. BASIS OF PRESENTATION AND GOING CONCERN

Basis of Presentation

The accompanying unaudited 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 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, 2015. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of June 30, 2016, and the results of operations and cash flows for the three and six months ended June 30, 2016 and 2015. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire fiscal year.

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 $224,255 for the six months ended June 30, 2016 and has negative working capital of $228,025 as of June 30, 2016.

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

We will need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms.

However, the trading price of our common stock could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, we may incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

Fair Value of Financial Instruments

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

The carrying amounts of these items approximated fair value.

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

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

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

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

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The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities as of June 30, 2016 and December 31, 2015 are described below:  

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
June 30, 2016:
Liabilities
Derivative Liabilities	$	-	$	-	$	19,122	$	19,122
Total	$	-	$	-	$	19,122	$	19,122
December 31, 2015:
Liabilities
Derivative Liabilities	$	-	$	-	$	19,067	$	19,067
Total	$	-	$	-	$	19,067	$	19,067

Derivative liability as of June 30, 2016 is $19,122, compared to $19,067 as of December 31, 2015.

2. NOTE PAYABLE – RELATED PARTY

During the six months ended June 30, 2016, the Company entered into five unsecured 7% Promissory Notes with a significant shareholder. The notes have six month terms and total $175,000.

The changes in notes payable to related party consisted of the following during the six months ended June 30, 2016:

	Six Months  Ended June 30, 2016
Notes payable – related party at beginning of period	$	-
Borrowings on notes payable – related party		175,000
Accumulated interest		2,720
Notes payable – related party at end of period	$	177,720

3. CONVERTIBLE DEBEBTURE – RELATED PARTY

The Company has entered into two 10% Secured Convertible Debentures with a significant shareholder, one in the amount of $50,000 on November 4, 2013 and the other in the amount of $60,000 on December 17, 2013. The debentures carry a one year term. Both debentures are convertible into common stock at a share price of the lower of $1.00 or 80% of the previous day’s closing price. During the year ended December 31, 2015, the lender converted $40,000 of the note principal and the Company made a payment of $70,000.

The outstanding notes payable to related party consisted of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
Convertible debenture – related party at beginning of period	$	15,681		122,538
Conversion		-		40,000
Repayment		-		70,000
Accumulated interest		778		3,143
Convertible debenture – related party at end of period	$	16,459		15,681

4. DERIVATIVE LIABILITIES

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

Upon grant, the Company assesses the fair value of the warrants using the Black Scholes pricing model and records a warrant liability for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the warrant liability to the new value, and records a corresponding gain or loss (see below for variables used in assessing the fair value).

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

Transactions involving warrants with ratchet provisions during the six months ended June 30, 2016 are as follows: All remaining warrants have expired.

	Number of Warrants		Weighted-Average Price Per Share
Outstanding at December 31, 2015		60,000	$	10
Granted		-		-
Exercised		-		-
Canceled or expired		60,000		10
Addition due to ratchet trigger		-		-
Outstanding at June 30, 2016			$	0

The fair value of the warrant derivative liabilities was estimated using the Black-Scholes Option Pricing Model and the following assumptions as of June 30, 2016:

	June 30, 2016
Risk-free interest rate		0.18	%
Expected stock price volatility		269	%
Expected dividend payout		-
Expected option in life-years		.05

The change in fair value of the warrant derivative liability consisted of the following during the three months ended June 30, 2016:

	June 30, 2016
Warrant liability (beginning fair value)	$	1,271
Additional liability due to new grants		-
Loss (gain) on changes in fair market value of warrant liability		(1,271	)
Warrant liability (ending fair value)	$	-

Change in fair market value of warrant liability resulted in a gain of $1,271 for the six months ended June 30, 2016.

The Company entered into two 10% Secured Convertible Debentures with a significant shareholder, one in the amount of $50,000 on November 4, 2013 and the other in the amount of $60,000 on December 17, 2013. The debentures carry a one year term. Debentures are convertible into common stock at a share price of the lower of $1.00 or 80% of the previous day’s closing price.

The Company assesses the fair value of the convertible debenture using the Black Scholes pricing model and records a derivative liability for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss (see below for variables used in assessing the fair value).

Due to the variable conversion rates, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging” (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entity’s own common stock. The fair value of the conversion options was determined using the Black-Scholes Option Pricing Model and the following significant assumptions during the six months ended June 30, 2016:

	June 30, 2016
Risk-free interest rate		.08	%
Expected stock price volatility		120	%
Expected dividend payout		-
Expected option in life-years		.25

6

The change in fair value of the conversion option derivative liability consisted of the following during the six months ended June 30, 2016:

	June 30, 2016
Conversion option liability (beginning fair value)	$	17,796
Additional liability due to new grants		-
Loss (gain) on changes in fair market value of warrant liability		1,326
Conversion option liability (ending fair value)	$	19,122

Change in fair market value of conversion option liability resulted in a loss of $1,326 for the six months ended June 30, 2016.

5. SUBSEQUENT EVENT

On July 15, 2016 the Company entered into a 7% Promissory Note in the amount of $100,000. The note has a one year term.

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain "forward-looking statements." The terms "believe," "anticipate," "intend," "goal," "expect," and similar expressions may identify forward-looking statements. These forward-looking statements represent the Company's current expectations or beliefs concerning future events. The matters covered by these statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including customer acceptance of new products, the impact of competition and price erosion, as well as other risks and uncertainties. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation that the strategy, objectives or other plans of the Company will be achieved. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Except as may be required under applicable securities laws, we undertake no duty to update this information.

OVERVIEW

Organizational History

On November 1, 2005, Bio-Solutions International, Inc. ("Bio-Solutions") entered into an Agreement and Plan of Merger (the "Agreement") with OmniMed Acquisition Corp., (the "Acquirer), a Nevada corporation and a wholly owned subsidiary of Bio-Solutions, OmniMed International, Inc., a Nevada corporation ("OmniMed"), and the shareholders of OmniMed (the "OmniMed Shareholders"). Pursuant to the Agreement, Bio-Solutions acquired all of the outstanding equity stock of OmniMed from the OmniMed Shareholders.

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

Overview of Business

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

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

By subscribing to the MedeFile system, members can empower themselves to take control of their own health and well-being, as well as empower their healthcare providers to make sound and lifesaving decisions with the most accurate, up-to-date medical information available.  In addition, with MedeFile, members enjoy the peace of mind that comes from knowing that their medical records are protected from fire, natural disaster, document misplacement or the closing of a medical or dental practice.

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

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

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

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

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

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RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2016 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2015

Revenues

Revenues for the three months ended June 30, 2016 totaled $10,498 compared to revenues of $12,742 during the three months ended June 30, 2015.  The decrease in membership revenue is primarily related to amount of members and medical record reimbursement revenue received from members. Medical record reimbursement revenue is a dollar for dollar reimbursement for charges from members’ doctors for sending updated medical records to MedeFile. The off-setting expense is charged to selling general and administrative expense. Revenues received from memberships are recognized through the period of the membership, and, therefore, revenue recognized represents a fraction of the membership in the quarter being reported.   

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2016 totaled $119,372, a decrease of $154,746 or approximately 56.4% compared to selling, general and administrative expenses of $274,118 for the three months ended June 30, 2015. The decrease was due mainly to decreased payroll, legal expense, and consulting fees.

Amortization Expense

Amortization expense for the three months ended June 30, 2016 was $0, compared to $22,149 the three months ended June 30, 2015.  Amortization expense in 2015 is the expensing of the website development. Website costs were impaired in the previous year and the Company incurred an impairment expense of $182,195.

Interest Expense

Interest expense on convertible debentures for the three months ended June 30, 2016 and 2015, was $2,605 and $352 respectively. The Company entered into two secured convertible debentures during the third quarter of 2013.  The notes have a one year term at a 10% interest rate.

Other Expense

Loss on change in fair value of derivate liabilities for the three months ended June 30, 2016 was $5,509 compared to a gain of $30,213 for the three months ended June 30, 2015.

Net Loss

For the reasons stated above, our net loss for the three months ended June 30, 2016 was $116,988, or $0.00 per share, a decrease of $136,955, compared to net loss of $253,943, or $0.02 per share, for the three months ended June 30, 2015. The significant change is directly related to adjustments in the fair value of our derivative liability and a decrease in our general and administrative and compensation expenses.  

FOR THE SIX MONTHS ENDED JUNE 30, 2016 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2015

Revenues

Revenues for the six months ended June 30, 2016 totaled $15,493 compared to revenues of $25,330 during the six months ended June 30, 2015.  The decrease in membership revenue is primarily related to amount of members and medical record reimbursement revenue received from members. Medical record reimbursement revenue is a dollar for dollar reimbursement for charges from members’ doctors for sending updated medical records to MedeFile. The off-setting expense is charged to selling general and administrative expense. Revenues received from memberships are recognized through the period of the membership, and, therefore, revenue recognized represents a fraction of the membership in the quarter being reported.   

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2016 totaled $236,195, a decrease of $203,529 or approximately 46.0% compared to selling, general and administrative expenses of $439,724 for the six months ended June 30, 2015. The decrease was due mainly to decreased payroll, legal expense, and consulting fees.

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Amortization Expense

Amortization expense for the six months ended June 30, 2016 was $0, compared to $44,299 the six months ended June 30, 2015.  Amortization expense in 2015 is the expensing of the website development. Website costs were impaired in the previous year and the Company incurred an impairment expense of $182,195.

Interest Expense

Interest expense on convertible debentures for the six months ended June 30, 2016 and 2015, was $3,498 and $2,392 respectively. The Company entered into two secured convertible debentures during the third quarter of 2013.  The notes have a one year term at a 10% interest rate.

Other Expense

Loss on change in fair value of derivate liabilities for the six months ended June 30, 2016 was $55 compared to a loss of $3,030 for the six months ended June 30, 2015.

Net Loss

For the reasons stated above, our net loss for the six months ended June 30, 2016 was $224,255, or $0.01 per share, a decrease of $240,405, compared to net loss of $464,660, or $0.01 per share, for the six months ended June 30, 2015. The significant change is directly related to adjustments in the fair value of our derivative liability and a decrease in our general and administrative and compensation expenses.  

FINANCIAL CONDITION

Liquidity and Capital Resources

As of June 30, 2016, we had cash and cash equivalents of $21,403, and merchant services reserve of $2,938.  Net cash used in operating activities for the six months ended June 30, 2016 was approximately $191,968. Our current liabilities as of June 30, 2016 of $252,366 consisted of: $38,715 for accounts payable and accrued liabilities, deferred revenues of $350, convertible debenture of $16,459, note payable of $177,720, and derivative liability of $19,122. We have negative working capital of $228,025 as of June 30, 2016.

The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. The Company has reported a net loss of $224,255 for the six months ended June 30, 2016 and had an accumulated deficit of $28,735,654 as of June 30, 2016.

The Company currently estimates that it will require approximately $420,000 to continue its operations for the next twelve months.  Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and conditions in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements as of June 30, 2016 or as of the date of this report.

Critical Accounting Policies

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

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

10

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. 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.

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for a smaller reporting company.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

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

As of the end of the period covered by this Quarterly Report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer (Principal Executive and Financial Officer) of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer (Principal Executive and Financial Officer) concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and also are not effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer (Principal Executive and Financial Officer), to allow timely decisions regarding required disclosure.

Management concluded that the design and operation of our disclosure controls and procedures are not effective because the following material weaknesses exist:

● Our chief executive officer also functions as our chief financial officer. As a result, our officers may not be able to identify errors and irregularities in the financial statements and reports.

● We were unable to maintain full segregation of duties within our financial operations due to our reliance on limited personnel in the finance function.

● Documentation of all proper accounting procedures is not yet complete.

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures.

Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2016, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

11

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not party to any material legal proceedings.

Item 1A. Risk Factors

Not required for a smaller reporting company.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information

None. 

Item 6. Exhibits

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
EX-101.INS	XBRL INSTANCE DOCUMENT
EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE
EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

12

SIGNATURES

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

	MEDEFILE INTERNATIONAL, INC.
Date: August 10, 2016	By:	/s/ Niquana Noel
		Niquana Noel
		Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

13

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Niquana Noel, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are 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 registrant 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 registrant, 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’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

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financing reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.

Date: August 10, 2016	By:	/s/ Niquana Noel
		Niquana Noel
		Chief Executive Officer (principal executive officer, principal financial officer)

EX-32.1

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-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Niquana Noel, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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: August 10, 2016	By:	/s/ Niquana Noel
		Niquana Noel
		Chief Executive Officer (principal executive officer, principal financial officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 10, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Medefile International, Inc.
Entity Central Index Key	0000842013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2016
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		28,756,010

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Current assets
Cash	$ 21,403	$ 38,371
Accounts receivable		4,965
Merchant services reserve	2,938	2,938
Total assets	24,341	46,274
Current liabilities
Accounts payable and accrued liabilities	38,715	14,857
Note payable - related party	177,720
Convertible debenture - related party	16,459	15,681
Deferred revenues	350	439
Derivative liability convertible note	19,122	19,067
Total current liabilities	252,366	50,044
Stockholders' deficit
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding
Common stock, $.0001 par value: 700,000,000 authorized; 28,756,010 and 28,756,010 shares issued and outstanding on June 30, 2016 and December 31, 2015, respectively	2,875	2,875
Additional paid-in capital	28,504,754	28,504,754
Accumulated deficit	(28,735,654)	(28,511,399)
Total stockholders' deficit	(228,025)	(3,770)
Total liabilities and stockholders' deficit	$ 24,341	$ 46,274

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	700,000,000	700,000,000
Common stock, shares issued	28,756,010	28,756,010
Common stock, shares outstanding	28,756,010	28,756,010

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Revenue	$ 10,498	$ 12,742	$ 15,493	$ 25,330
Cost of revenue
Cost of revenue		279		595
Gross profit	10,498	12,463	15,493	24,735
Operating expenses
Selling, general and administrative expenses	119,372	274,118	236,195	439,724
Depreciation and amortization expenses		22,149		44,299
Total operating expenses	119,372	296,267	236,195	484,023
Loss from operations	(108,874)	(283,804)	(220,702)	(459,288)
Other income (expenses)
Interest expense	(2,605)	(352)	(3,498)	(2,393)
Change in fair value of derivative liabilities	(5,509)	30,213	(55)	(3,030)
Change in derivative liability - warrant				51
Total other income (expense)	(8,114)	29,861	(3,553)	(5,372)
Net loss	$ (116,988)	$ (253,943)	$ (224,255)	$ (464,660)
Net loss per share: basic and diluted	$ 0.00	$ (0.02)	$ (0.01)	$ (0.02)
Weighted average share outstanding: basic and diluted	28,756,010	13,777,618	28,756,010	20,487,123

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities
Net income (loss)	$ (224,255)	$ (464,660)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		44,299
Stock based compensation		111,000
Change in derivative liabiliy - convertible debenture	55	3,030
Change in derivative liabiliy - warrants		(51)
Changes in operating assets and liabilities
Accounts receivable	4,965	1,499
Inventory		596
Prepaid expense		5,709
Accounts payable and accrued liabilities	23,858	601
Accrued interest - convertible debenture	779	2,393
Accrued interest - note payable	2,719
Deferred revenue	(89)	218
Net cash used in operating activities	(191,968)	(295,366)
Cash flow from financing activities
Proceeds from note payable - related party	175,000
Payment on convertible note		(70,000)
Proceeds from common stock subscriptions		620,000
Net cash provided by financing activities	175,000	550,000
Net increase (decrease) in cash and cash equivalents	(16,968)	254,634
Cash and cash equivalents at beginning of period	38,371	36,170
Cash and cash equivalents at end of period	21,403	290,804
Supplemental disclosure of cash flow information
Cash paid for interest
Cash paid for income taxes
Noncash investing and financing activities
Stock issued for conversion of debt		$ 40,000

XML

Basis of Presentation and Nature of Going Concern

6 Months Ended

Jun. 30, 2016

Basis of presentation and going concern [Abstract]

BASIS OF PRESENTATION AND GOING CONCERN

1. BASIS OF PRESENTATION AND GOING CONCERN

Basis of Presentation

The accompanying unaudited 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 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, 2015. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of June 30, 2016, and the results of operations and cash flows for the three and six months ended June 30, 2016 and 2015. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire fiscal year.

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 $224,255 for the six months ended June 30, 2016 and has negative working capital of $228,025 as of June 30, 2016.

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

We will need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms.

However, the trading price of our common stock could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, we may incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

Fair Value of Financial Instruments

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

The carrying amounts of these items approximated fair value.

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

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

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

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

The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities as of June 30, 2016 and December 31, 2015 are described below:  

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
June 30, 2016:
Liabilities
Derivative Liabilities	$	-	$	-	$	19,122	$	19,122
Total	$	-	$	-	$	19,122	$	19,122
December 31, 2015:
Liabilities
Derivative Liabilities	$	-	$	-	$	19,067	$	19,067
Total	$	-	$	-	$	19,067	$	19,067

Derivative liability as of June 30, 2016 is $19,122, compared to $19,067 as of December 31, 2015.

XML

Note Payable - Related Party

6 Months Ended

Jun. 30, 2016

Note Payable - Related Party [Abstract]

NOTE PAYABLE - RELATED PARTY

2. NOTE PAYABLE – RELATED PARTY

During the six months ended June 30, 2016, the Company entered into five unsecured 7% Promissory Notes with a significant shareholder. The notes have six month terms and total $175,000.

The changes in notes payable to related party consisted of the following during the six months ended June 30, 2016:

	Six Months  Ended June 30, 2016
Notes payable – related party at beginning of period	$	-
Borrowings on notes payable – related party		175,000
Accumulated interest		2,720
Notes payable – related party at end of period	$	177,720

XML

Convertible Debenture - Related Party

6 Months Ended

Jun. 30, 2016

Convertible Debenture - Related Party [Abstract]

CONVERTIBLE DEBENTURE - RELATED PARTY

3. CONVERTIBLE DEBEBTURE – RELATED PARTY

The Company has entered into two 10% Secured Convertible Debentures with a significant shareholder, one in the amount of $50,000 on November 4, 2013 and the other in the amount of $60,000 on December 17, 2013. The debentures carry a one year term. Both debentures are convertible into common stock at a share price of the lower of $1.00 or 80% of the previous day’s closing price. During the year ended December 31, 2015, the lender converted $40,000 of the note principal and the Company made a payment of $70,000.

The outstanding notes payable to related party consisted of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
Convertible debenture – related party at beginning of period	$	15,681		122,538
Conversion		-		40,000
Repayment		-		70,000
Accumulated interest		778		3,143
Convertible debenture – related party at end of period	$	16,459		15,681

XML

Derivative Liability

6 Months Ended

Jun. 30, 2016

Derivative Liability [Abstract]

DERIVATIVE LIABILITIES

4. DERIVATIVE LIABILITIES

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

Upon grant, the Company assesses the fair value of the warrants using the Black Scholes pricing model and records a warrant liability for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the warrant liability to the new value, and records a corresponding gain or loss (see below for variables used in assessing the fair value).

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

Transactions involving warrants with ratchet provisions during the six months ended June 30, 2016 are as follows: All remaining warrants have expired.

	Number of Warrants		Weighted-Average Price Per Share
Outstanding at December 31, 2015		60,000	$	10
Granted		-		-
Exercised		-		-
Canceled or expired		60,000		10
Addition due to ratchet trigger		-		-
Outstanding at June 30, 2016			$	0

The fair value of the warrant derivative liabilities was estimated using the Black-Scholes Option Pricing Model and the following assumptions as of June 30, 2016:

	June 30, 2016
Risk-free interest rate		0.18	%
Expected stock price volatility		269	%
Expected dividend payout		-
Expected option in life-years		.05

The change in fair value of the warrant derivative liability consisted of the following during the three months ended June 30, 2016:

	June 30, 2016
Warrant liability (beginning fair value)	$	1,271
Additional liability due to new grants		-
Loss (gain) on changes in fair market value of warrant liability		(1,271	)
Warrant liability (ending fair value)	$	-

Change in fair market value of warrant liability resulted in a gain of $1,271 for the six months ended June 30, 2016.

The Company entered into two 10% Secured Convertible Debentures with a significant shareholder, one in the amount of $50,000 on November 4, 2013 and the other in the amount of $60,000 on December 17, 2013. The debentures carry a one year term. Debentures are convertible into common stock at a share price of the lower of $1.00 or 80% of the previous day’s closing price.

The Company assesses the fair value of the convertible debenture using the Black Scholes pricing model and records a derivative liability for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss (see below for variables used in assessing the fair value).

Due to the variable conversion rates, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging” (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entity’s own common stock. The fair value of the conversion options was determined using the Black-Scholes Option Pricing Model and the following significant assumptions during the six months ended June 30, 2016:

	June 30, 2016
Risk-free interest rate		.08	%
Expected stock price volatility		120	%
Expected dividend payout		-
Expected option in life-years		.25

The change in fair value of the conversion option derivative liability consisted of the following during the six months ended June 30, 2016:

	June 30, 2016
Conversion option liability (beginning fair value)	$	17,796
Additional liability due to new grants		-
Loss (gain) on changes in fair market value of warrant liability		1,326
Conversion option liability (ending fair value)	$	19,122

Change in fair market value of conversion option liability resulted in a loss of $1,326 for the six months ended June 30, 2016.

XML

Subsequent Event

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENT

5. SUBSEQUENT EVENT

On July 15, 2016 the Company entered into a 7% Promissory Note in the amount of $100,000. The note has a one year term.

XML

Basis of Presentation and Nature of Going Concern (Policies)

6 Months Ended

Jun. 30, 2016

Basis of presentation and going concern [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited 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 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, 2015. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of June 30, 2016, and the results of operations and cash flows for the three and six months ended June 30, 2016 and 2015. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Going Concern

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 $224,255 for the six months ended June 30, 2016 and has negative working capital of $228,025 as of June 30, 2016.

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

We will need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms.

However, the trading price of our common stock could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, we may incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

The carrying amounts of these items approximated fair value.

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

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

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

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

The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities as of June 30, 2016 and December 31, 2015 are described below:  

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
June 30, 2016:
Liabilities
Derivative Liabilities	$	-	$	-	$	19,122	$	19,122
Total	$	-	$	-	$	19,122	$	19,122
December 31, 2015:
Liabilities
Derivative Liabilities	$	-	$	-	$	19,067	$	19,067
Total	$	-	$	-	$	19,067	$	19,067

Derivative liability as of June 30, 2016 is $19,122, compared to $19,067 as of December 31, 2015.

XML

Basis of Presentation and Nature of Going Concern (Tables)

6 Months Ended

Jun. 30, 2016

Basis of presentation and going concern [Abstract]

Schedule of three levels of the fair value hierarchy to assets and liabilities

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
June 30, 2016:
Liabilities
Derivative Liabilities	$	-	$	-	$	19,122	$	19,122
Total	$	-	$	-	$	19,122	$	19,122
December 31, 2015:
Liabilities
Derivative Liabilities	$	-	$	-	$	19,067	$	19,067
Total	$	-	$	-	$	19,067	$	19,067

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Note Payable - Related Party (Tables)

6 Months Ended

Jun. 30, 2016

Note Payable - Related Party [Abstract]

Summary of changes in notes payable to related party

	Six Months  Ended June 30, 2016
Notes payable – related party at beginning of period	$	-
Borrowings on notes payable – related party		175,000
Accumulated interest		2,720
Notes payable – related party at end of period	$	177,720

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Convertible Debenture - Related Party (Tables)

6 Months Ended

Jun. 30, 2016

Convertible Debenture - Related Party [Abstract]

Schedule of convertible debentures

	June 30, 2016		December 31, 2015
Convertible debenture – related party at beginning of period	$	15,681		122,538
Conversion		-		40,000
Repayment		-		70,000
Accumulated interest		778		3,143
Convertible debenture – related party at end of period	$	16,459		15,681

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Derivative Liability (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Liability [Abstract]

Schedule of transactions involving warrants

	Number of Warrants		Weighted-Average Price Per Share
Outstanding at December 31, 2015		60,000	$	10
Granted		-		-
Exercised		-		-
Canceled or expired		60,000		10
Addition due to ratchet trigger		-		-
Outstanding at June 30, 2016			$	0

Schedule of fair value assumptions for warrants

	June 30, 2016
Risk-free interest rate		0.18	%
Expected stock price volatility		269	%
Expected dividend payout		-
Expected option in life-years		.05

Schedule of warrant liability

	June 30, 2016
Warrant liability (beginning fair value)	$	1,271
Additional liability due to new grants		-
Loss (gain) on changes in fair market value of warrant liability		(1,271	)
Warrant liability (ending fair value)	$	-

Schedule of embedded features of derivative financial instruments

	June 30, 2016
Risk-free interest rate		.08	%
Expected stock price volatility		120	%
Expected dividend payout		-
Expected option in life-years		.25

Schedule of change in fair value of the conversion option derivative liability

	June 30, 2016
Conversion option liability (beginning fair value)	$	17,796
Additional liability due to new grants		-
Loss (gain) on changes in fair market value of warrant liability		1,326
Conversion option liability (ending fair value)	$	19,122

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Basis of Presentation and Nature of Going Concern (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Liabilities
Derivative Liabilities	$ 19,122	$ 19,067
Total	19,122	19,067
Level 1
Liabilities
Derivative Liabilities
Total
Level 2
Liabilities
Derivative Liabilities
Total
Level 3
Liabilities
Derivative Liabilities	19,122	19,067
Total	$ 19,122	$ 19,067

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Basis of Presentation and Nature of Going Concern (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Basis of Presentation and Nature of Business Operations (Textual)
Net Income (loss)	$ (116,988)	$ (253,943)	$ (224,255)	$ (464,660)
Negative working capital	228,025		228,025
Derivative Liabilities	$ 19,122		$ 19,122		$ 19,067

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Note Payable - Related Party (Details)	6 Months Ended
	Jun. 30, 2016 USD ($)
Note Payable - Related Party [Abstract]
Notes payable - related party at beginning of period
Borrowings on notes payable - related party	175,000
Accumulated interest	2,719
Notes payable - related party at end of period	$ 177,720

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Note Payable - Related Party (Details Textual) - Unsecured Promissory Notes [Member]	6 Months Ended
	Jun. 30, 2016 USD ($) PromissoryNotes
Notes Payable - Related Party (Textual)
Number of unsecured promissory notes | PromissoryNotes	5
Unsecured promissory notes interest rate	7.00%
Notes term	6 months
Notes amount | $	$ 175,000

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Convertible Debenture - Related Party (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Convertible Debenture - Related Party [Abstract]
Convertible debenture - related party at beginning of period	$ 15,681	$ 122,538
Conversion		40,000
Repayment		70,000
Accumulated Interest	778	3,143
Convertible debenture - related party at end of period	$ 16,459	$ 15,681

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Convertible Debenture - Related Party (Details Textual)			6 Months Ended
	Dec. 17, 2013 USD ($)	Nov. 04, 2013 USD ($)	Jun. 30, 2016 USD ($) Debenture	Dec. 31, 2015 USD ($)
Convertible Debenture - Related Party (Textual)
Conversion note principal amount				$ 40,000
Covertible debenture repayment				$ 70,000
Convertible Debt Securities [Member]
Convertible Debenture - Related Party (Textual)
Convertible debenture issued	$ 60,000	$ 50,000
Secured convertible debentures interest rate	10.00%	10.00%
Number of secured convertible debentures | Debenture			2
Term on secured convertible debentures	1 year	1 year
Conversion of feature description			Both debentures are convertible into common stock at a share price of the lower of $1.00 or 80% of the previous day's closing price.

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Derivative Liability (Details) - Warrants with ratchet provisions [Member]	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Number of Warrants
Beginning Balance | shares	60,000
Granted | shares
Exercised | shares
Canceled or expired | shares	60,000
Additional due to ratchet trigger | shares
Ending Balance | shares
Weighted-Average Price Per Share
Beginning Balance | $ / shares	$ 10
Granted | $ / shares
Exercised | $ / shares
Canceled or expired | $ / shares	10
Addition due to ratchet trigger | $ / shares
Ending Balance | $ / shares	$ 0

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Derivative Liability (Details 1) - Warrant derivative liabilities [Member]	6 Months Ended
	Jun. 30, 2016
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date	0.18%
Expected stock price volatility	269.00%
Expected dividend payout
Expected option in life-years	18 days

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Derivative Liability (Details 2) - Warrant derivative liabilities [Member]	6 Months Ended
	Jun. 30, 2016 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrant liability (beginning balance)	$ 1,271
Additional liability due to new grants
Loss(gain) on changes in fair market value of warrant liability	(1,271)
Warrant liability (ending fair value)

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Derivative Liability (Details 3) - Convertible debenture [Member]	6 Months Ended
	Jun. 30, 2016
Class Of Warrant Or Right [Line Items]
Risk-free interest rate at grant date	0.08%
Expected stock price volatility	120.00%
Expected dividend payout
Expected option in life-years	3 months

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Derivative Liability (Details 4)	6 Months Ended
	Jun. 30, 2016 USD ($)
Class Of Warrant Or Right [Line Items]
Conversion option liability (beginning fair value)	$ 19,067
Conversion option liability (ending fair value)	19,122
Convertible debenture [Member]
Class Of Warrant Or Right [Line Items]
Conversion option liability (beginning fair value)	17,796
Additional liability due to new grants
Loss(gain) on changes in fair market value of warrant liability	1,326
Conversion option liability (ending fair value)	$ 19,122

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Derivative Liability (Details Textual)			6 Months Ended
	Dec. 17, 2013 USD ($)	Nov. 04, 2013 USD ($)	Jun. 30, 2016 USD ($) Debenture	Jun. 30, 2015
Class of Warrant or Right [Line Items]
Company granted the additional shares of common stock period				2 years
Method used for fair value of warrant granted				Black Scholes pricing model
Term of warrants expired from date of grant				4 years
Convertible Debt [Member]
Class of Warrant or Right [Line Items]
Change in fair market value			$ 1,326
Warrant derivative liabilities [Member]
Class of Warrant or Right [Line Items]
Change in fair market value			$ (1,271)
Convertible Debt Securities [Member]
Class of Warrant or Right [Line Items]
Number of secured convertible debentures | Debenture			2
Convertible debenture issued	$ 60,000	$ 50,000
Secured convertible debentures interest rate	10.00%	10.00%
Debt instrument term	1 year	1 year
Conversion of feature description			Both debentures are convertible into common stock at a share price of the lower of $1.00 or 80% of the previous day's closing price.

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Subsequent Event (Details) - Subsequent Event [Member]	Jul. 15, 2016 USD ($)
Subsequent Event [Line Items]
Percentage of promissory note	7.00%
Promissory note	$ 100,000
Debt instrument term	1 year