UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 10-K
☒ | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | |
| | For the year ended December 31, 2014 |
| | |
☐ | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 |
For the transition period from
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 incorporation or organization) |
|
(I.R.S.
Employer
Identification
No.) |
301 Yamato Road, Suite 1200
Boca Raton, FL 33413
(Address of principal executive offices) (Zip
code)
(561) 912-3393
(Registrant’s telephone number, including
area code)
Securities registered pursuant to Section
12(b) of the Act: None
Securities registered pursuant to Section
12(g) of the Act: None
DOCUMENTS INCORPORATED BY REFERENCE –
None
Indicate by check mark
whether the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. o
Yes þ No
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. o Yes þ
No
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. þ Yes o
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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). þ Yes
¨ No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge,
in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K . þ
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large
accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer o |
Accelerated filer o |
Non-accelerated filer o |
Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company
(as defined by Rule 12b-2 of the Exchange Act)
☐ Yes
þ No
As of June 30, 2014, the aggregate market value of the issued and
outstanding common stock held by non-affiliates of the registrant, based upon the last closing price of our common stock of $0.03
was approximately $1,500,000. For purposes of the above statement only, all directors, executive officers and 10% shareholders
are assumed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for
any other purpose.
Number of shares of common stock outstanding as of March 31, 2015
was 522,953,672.
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014
INDEX
PART I
Item 1. Business.
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”, the “Company”, “we”, “us”, or “our”).
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 (pier) system for gathering, digitizing, maintaining, accessing and sharing an individual’s
actual medical records. MedeFile's goal is to revolutionize the medical industry by bringing patient-centric digital technology
to the business of medicine. MedeFile intends to accomplish its objective by providing individuals with a simple and secure way
to access their lifetime of actual medical records in an efficient and cost-effective manner. MedeFile's products and services
are designed to provide healthcare providers with the ability to reference their patient's actual past medical records, thereby
ensuring the most accurate treatment and services possible while simultaneously reducing redundant procedures.
Interoperable
with most electronic medical record systems utilized by physician practices, clinics, hospitals and other care providers, the highly
secure, feature-rich MedeFile iPHR solution has been designed to gather all of its members’ actual medical records on behalf
of each member, and create a single, comprehensive, electronic Personal Health Record (PHR). 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 MedeDrive flash drive/keychain or branded UBS-bracelet.
By
subscribing to the MedeFile system, members empower themselves to take control of their own health and well-being, and empower
their healthcare providers to make sound and lifesaving decisions with the most accurate, up-to-date medical information available.
In addition, with MedeFile, members benefit from knowing that their medical records are protected from fire, natural disaster,
document misplacement or the closing of a medical or dental practice.
MedeFile believes
it enjoys a number of direct, competitive advantages over others in the medical records marketplace:
● |
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MedeFile has developed products and services geared to the patient, while containing the depth and breadth of information required by treating physicians and medical personnel. |
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MedeFile does all the work of collecting and updating medical information on an ongoing basis; the function of our products’ dependence on the patient taking action is minimal – particularly when compared to patient action required to support competing solutions. |
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MedeFile provides a complete medical record. Other companies claim complete longitudinal records, but in reality only provide histories (usually completed by the member/patient), and are by no means complete or necessarily accurate records. |
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MedeFile provides a coherent mix of services and products that are intended to improve the quality of healthcare by enabling the patient to manage and access the information normally retained by doctors and other care providers. |
Industry
Overview
Since
the beginning of modern medicine, information about a patient's history, testing, treatment and care have been key factors in the
provision and delivery of quality healthcare. Medical record information takes many forms, such as the patient's diagnosis, treatments,
surgeries, medications, allergies, x-rays, and test results. The usage of medical record information has dramatically increased
over the past two decades due to factors such as the complex reimbursement structure in the United States healthcare system, an
ever more litigious society, and increased patient awareness.
Every
patient visit generates a medical record. Today, this information is largely contained in a paper-based patient medical record.
A patient's medical records are usually stored in physicians' offices as well as other healthcare facilities the patient has visited.
A record that tracks a patient's medical treatment over time is called a “longitudinal record.”
In today's
healthcare environment, access to hospital-based medical records by patients and other authorized parties (e.g., insurance companies,
attorneys, etc.) is controlled by Release of Information (ROI) policies and procedures. ROI processes are based on the premise
that patients have a right to access their medical records and that they must specifically designate any other party to whom their
medical information can be released. ROI policies and procedures are based on the following laws and policies: the federal Health
Insurance Portability and Accountability Act (HIPAA), various state laws, and the policies and professional practice guidelines
set forth by the American Health Information Management Association (AHIMA).
Congress
passed the Health Insurance Portability & Accountability Act (HIPAA) in 1996. The purpose of HIPAA is to prevent fraud in the
healthcare industry and to protect confidential patient information. HIPAA 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.
In
addition, in 2009, the Health Information Technology for Economic and Clinical Health Act (HITECH Act) legislation was created
to stimulate the adoption of electronic health records (EHR) and supporting technology in the United States. President Obama signed
HITECH into law on February 17, 2009 as part of the American Recovery and Reinvestment Act of 2009 (ARRA), an economic stimulus
bill. The HITECH Act continues the effort of the Health Insurance Portability and Accountability Act (HIPAA) to encourage movement
to electronic patient records and to deliver stricter data protection regulations for more secure patient privacy. The HITECH act
stipulates that, beginning in 2011, healthcare providers will be offered financial incentives for demonstrating meaningful use
of electronic health records (EHR). Incentives will be offered until 2015, after which time penalties may be levied for failing
to demonstrate such use. The Act also establishes grants for training centers for the personnel required to support a health IT
infrastructure.
Overview
of Products and Services
MedeFile
iPHR
MedeFile
is a Business-to-Business and a Business-to-Consumer subscription service. MedeFile is designed to create a "cradle to grave"
longitudinal record for each of its members by retrieving and consolidating copies of their medical records. When the records are
received, the MedeFile system consolidates them into a single medically correct format. The records are then stored in MedeFile's
MedeVault, a secure repository that can be accessed by MedeFile members 24 hours a day, 7 days a week. Because of the unique security
procedures incorporated into the MedeFile system through SecuroMed, the member is the only person to access or give permission
to access their records.
A
complete MedeFile iPHR 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 Premium MedeFile member and MedeOne
member receives a MedeDrive, an external USB drive which stores all of a patient's Emergency Medical Information as well as a copy
of the member's MedeFile.
MedeFile's
Emergency Medical Information (EMI) Card
Upon
becoming a MedeFile member, each individual will receive a Membership / Emergency Medical Information (EMI) Card which contains
instructions on how to contact MedeFile in order to retrieve the member's medical records.
The Digital
Health Profile (DHP)
A
part of a member's MedeFile is their Digital Health Profile (DHP). This form is completed by the patient in order to provide a
summary of the patient's healthcare history which assists healthcare providers in understanding the patient's course of medical
treatment. This document, along with Advanced Directives and medical record copies, complete the documents contained in the patient's
MedeFile.
MedeDrive
The
MedeDrive is an external USB drive which stores all of a patient's Emergency Medical Information and their MedeFile which can be
viewed on a personal computer. MedeDrive self loads its own viewer, so no special program or software is required. The MedeDrive
easily plugs into any PC USB port on most Windows-based computers built in the last four years. (Macintosh version is currently
unavailable). The MedeDrive USB key can be updated easily and as frequently as the member desires at no additional cost.
MedeVault
The
MedeVault is designed to serve as an electronic data and document repository that incorporates state-of-the-art security features
in order to prevent unauthorized access to a patient's records. Access to the MedeVault is provided through an encrypted connection
to a web service run by MedeFile. This connection is provided by Secure Sockets Layer (SSL) technology.
MedeMinder
MedeMinder
is MedeFile’s reminder service. The member tells us when and where to call, and we automatically contact the member
day or night with an appropriate reminder, spoken by real people. The member can even choose the voice they want to hear. MedeMinder
helps insure the member will not miss an appointment or forget to take their medication.
SecurMed
SecurMed is
designed to serve as an authentication process that protects against any information being viewed by unauthorized persons.
Quality
of Care Program
MedeFile’s
Quality of Care Program is a unique marketing initiative providing for MedeFile to partner on a revenue-sharing basis with established
medical practitioners, physician groups and hospitals to educate patients on the benefits and advantages of adopting the MedeFile
system as their Personal Health Record solution. Studies have shown that consumers are more interested in adopting a
PHR offered by their healthcare provider than any other source.
MedeFile
believes that its iPHR platform can serve as a highly effective patient portal and practice integration tool that addresses the
need for practitioners to meet Stage 2 “meaningful use” standards required for qualifying for federal incentive payments
pursuant to the HITECH Act. Stage 2 of the HITECH Act, which begins October 2012, stipulates that 20% of
the patient populations of eligible providers must have the ability to electronically view and download their health information
– including diagnostic test results, physician’s notes, medication lists and medication allergies, via a web-based
portal within 36 hours of being seen by the eligible providers. With the Quality of Care Program, healthcare providers
can establish an elevated patient-centric standard of care and economically benefit from increased clinical efficiencies, government
“meaningful use” incentives and their financial stake in the successful marketing of MedeFile’s iPHR solution
to their patient populations.
MedePro
Introduced
in 2012, MedePro is a medical record retrieval and document management solution created specifically by MedeFile for legal and
insurance professionals.
For Legal
Professionals
Medical
record retrieval and document management play critical roles in helping plaintiff or defense counsels build, support and win their
cases, be them mass tort, malpractice, personal injury, product liability, workers’ compensation or other types of health-
or medical-related litigation. However, the sheer cost, manpower and time required to request, retrieve and manage what is typically
hundreds, if not thousands, of records can be overwhelming. Upon engagement, MedeFile’s highly competent MedePRO customer
service agents and our proprietary electronic retrieval system go to work contacting case-related healthcare providers nationwide
to collect copies of all actual medical records and files – including actual notes, EKGs, X-rays, MRIs, labs, et al. Then,
using a secure, double encrypted process, MedeFile consolidates, digitizes, indexes, paginates, Bates stamps, stores and protects
the records in the MedeVault, MedeFile’s proprietary, highly secure, redundant electronic depository which can only
be accessed by authorized individuals.
Retrieved
medical records can be searched and viewed online through MedeFile’s secure online portal from anywhere on Earth using an
Internet-enabled desktop computer or mobile computing device. In addition, individual and/or collective documents can also be downloaded,
shared with co-counsels (essential for large mass tort cases), and copied to a MedeDrive, a proprietary USB thumb drive ideal for
portability and convenient and economical long term storage.
The
MedePRO solution may also be seamlessly integrated into a law firm’s case management system to facilitate real-time, one-click
status checks of requested records, helping to expedite case discovery and complex trial preparation.
For Insurance
Professionals
In
collaboration with medical insurance providers and with proper authorization, MedePRO enables the expeditious, secure retrieval
and management of all actual medical records and files from a patient’s current and former care providers. Records received
are then digitized, indexed, coded and stored in the MedeVault, from which case managers can access, view, share and download a
patient’s comprehensive, longitudinal personal health record from any web-enabled device. Further, MedePRO’s online
record order tracking system allows case managers to view real-time status reports on a 24/7 basis. Insurance
professionals can also tap the power and convenience of MedePRO for the purpose of analyzing medical claims or investigating and
adjudicating medical identity theft and fraud.
Members
As
of December 31, 2014, MedeFile had approximately 21099 members. The Company’s marketing strategy includes issuing trial
memberships on several levels.
Sales and Marketing
MedeFile
employs the following marketing strategies to generate awareness of MedeFile's products and services: direct sales, direct mail,
public relations campaigns, speaking engagements by MedeFile's executive officers, participation in trade shows, and alliances
and partnerships with third parties.
MedeFile's
marketing strategy will target the following types of organizations: Health Maintenance Organizations; Preferred Provider Organizations;
law practices, managed care organizations; insurance companies; trade unions; large affinity groups, such as AARP; large and medium-sized
self-insured corporations; nursing homes and assisted living facilities; and Internet users.
In particular,
the MedeFile service is designed to be sold in several distinct ways:
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MedeFile’s 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. |
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Physician referrals - Patients may enroll based on a doctor's referral. In the event that these physicians are also MedeFile Quality of Care Program customers, they may easily transfer their patients' information into the MedeFile system. |
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Large group offerings (e.g. AARP, trade unions, etc.) - 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. |
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Insurance companies - Similar to large group offerings identified above, insurance companies may offer the MedeFile service to their insured as a means to decrease the cost of medical care. |
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Law firms and insurance companies – law firms and insurance companies may engage MedeFile’s MedePro service for the purpose of retrieving medical records and managing documents in association with case preparation and management. |
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.
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
that can be easily accessed by emergency care personnel, and the client's actual medical records which are stored in a secure area
of the subscriber's MedeFile. The MedeDrive USB key can be updated easily and as frequently as the member desires at no additional
cost.
Employees
From
our inception through the period ended December 31, 2014, we have primarily relied on the services of outside consultants. As
of December 31, 2014, MedeFile had a total of 3 full time employees and 3 consultants. We believe our relations with our employees
are favorable.
Item 1A. Risk Factors.
An investment in the Company’s common
stock involves a high degree of risk. In determining whether to purchase the Company’s common stock, an investor should carefully
consider all of the material risks described below, together with the other information contained in this report before making
a decision to purchase the Company’s securities. An investor should only purchase the Company’s securities if he or
she can afford to suffer the loss of his or her entire investment.
RISKS RELATED TO OUR BUSINESS
We have a history of operating losses, and
we may not achieve or maintain profitability in the future.
We had an operating loss
of $577,175 and net income of $341,554 for the year ended December 31, 2014. As of December 31, 2014, we have an accumulated deficit
of $27,354,543. The accompanying consolidated financial statements have been prepared contemplating a continuation of the
Company as a going concern.
In the event that cash
flow from operations is less than anticipated and we are unable to secure additional funding to cover our expenses, in order to
preserve cash, we would be required to reduce expenditures and effect reductions in our corporate infrastructure, either of which
could have a material adverse effect on our ability to continue our current level of operations. To the extent that operating expenses
increase or we need additional funds to make acquisitions, develop new technologies or acquire strategic assets, the need for additional
funding may be accelerated and there can be no assurances that any such additional funding can be obtained on terms acceptable
to us, if at all. If we were not able to generate sufficient capital, either from operations or through additional debt or equity
financing, to fund our current operations, we would be forced to significantly reduce or delay our plans for continued research
and development and expansion. This could significantly reduce the value of our securities.
The commercial success of our products and
services depends on the widespread market acceptance of digital technology in the healthcare industry.
The market for digitization
of medical records is emerging. Our success will depend on acceptance of digital technology for use in and maintaining and accessing
medical records by individuals and healthcare providers, as well as the success of the commercialization of the MedeFile products
and services. Presently, it is difficult to assess or predict with any assurance the potential size, timing and viability of market
opportunities for our technology in this market. The healthcare records market sector is well established with entrenched competitors
with whom we must compete.
We may be unable to effectively manage our growth or implement
our expansion strategy.
Our growth strategy is
subject to related risks, including pressure on our management and on our internal systems and controls. Our planned growth will
require us to invest in new, and improve our existing, operational, technological and financial systems and to expand, train and
retain our employee base. Our failure to effectively manage our growth could have a material adverse effect on our future financial
condition. In addition, due to our lack of operating experience we may have difficulty in managing our growth.
We have limited marketing or sales capabilities, and if we are
unable to develop sales and marketing capabilities, we may not be successful in commercializing our products.
We currently have limited
sales, marketing and distribution capabilities. As a result, we may be forced to depend on collaborations or agreements with third
parties that have established distribution systems and direct sales forces. To the extent that we enter into co-promotion or other
licensing arrangements, our revenues will depend upon the efforts of third parties, over which we may have little or no control.
We may engage in future acquisitions, which
may be expensive and time consuming and from which we may not realize anticipated benefits.
We may acquire additional
businesses, technologies and products if we determine that these additional businesses, technologies and products complement our
existing business or otherwise serve our strategic goals. If we do undertake transactions of this sort, the process of integrating
an acquired business, technology or product may result in operating difficulties and expenditures and may absorb significant management
attention which would otherwise be available for ongoing development of our business. Moreover, we may never realize the anticipated
benefits of any acquisition. Future acquisitions could result in potentially dilutive issuances of our securities, the incurrence
of debt and contingent liabilities and amortization expenses related to intangible assets, which could adversely affect our results
of operations and financial condition.
RISKS RELATED TO OUR COMMON STOCK
Because our common stock is not registered
under the Exchange Act, we will not be subject to the federal proxy rules and our directors, executive offices and 10% beneficial
holders will not be subject to Section 16 of the Exchange Act. In addition, our reporting obligations under Section 15(d) of the
Exchange Act may be suspended automatically if we have fewer than 300 shareholders of record on the first day of our fiscal year.
Our common stock is not
registered under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), and we do not intend to register
our common stock under the Exchange Act for the foreseeable future (provided that, we will register our common stock under the
Exchange Act if we have, after the last day of our fiscal year, more than 500 shareholders of record and $10 million in assets,
in accordance with Section 12(g) of the Exchange Act). As a result, although we are required to file annual, quarterly, and current
reports pursuant to Section 15(d) of the Exchange Act, as long as our common stock is not registered under the Exchange Act, we
will not be subject to Section 14 of the Exchange Act, which, among other things, prohibits companies that have securities registered
under the Exchange Act from soliciting proxies or consents from shareholders without furnishing to shareholders and filing with
the Securities and Exchange Commission (“SEC”) a proxy statement and form of proxy complying with the proxy rules.
In addition, so long as our common stock is not registered under the Exchange Act, our directors and executive officers and beneficial
holders of 10% or more of our outstanding common stock will not be subject to Section 16 of the Exchange Act. Section 16(a) of
the Exchange Act requires executive officers and directors, and persons who beneficially own more than 10% of a registered class
of equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of common shares and other equity securities, on Forms 3, 4 and 5 respectively. Such information
about our directors, executive officers, and beneficial holders will only be available through periodic reports we file under the
Exchange Act or registration statements we file under the Securities Act. Furthermore, so long as our common stock is
not registered under the Exchange Act, our obligation to file reports under Section 15(d) of the Exchange Act will be automatically
suspended if, on the first day of any fiscal year (other than a fiscal year in which a registration statement under the Securities
Act has gone effective), we have fewer than 300 shareholders of record. This suspension is automatic and does not require any filing
with the SEC. In such an event, we may cease providing periodic reports and current or periodic information, including operational
and financial information, may not be available with respect to our results of operations.
Our common stock is subject to the "Penny
Stock" rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome
and may reduce the value of an investment in our stock.
The Securities and Exchange Commission
has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny
stock, unless exempt, the rules require:
● that a broker
or dealer approve a person's account for transactions in penny stocks; and
● the broker
or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny
stock to be purchased.
In order to approve a person's
account for transactions in penny stocks, the broker or dealer must:
● obtain financial
information and investment experience objectives of the person; and
● make a reasonable
determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must
also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form:
● sets forth
the basis on which the broker or dealer made the suitability determination; and
● that the
broker or dealer received a signed, written agreement from the investor prior to the transaction.
Generally, brokers may
be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult
for investors to dispose of our common stock and cause a decline in the market value of our stock.
We do not expect to pay dividends for some time, if at all.
No cash dividends have
been paid on our common stock. We expect that any income received from operations will be devoted to our future operations and
growth. We do not expect to pay cash dividends in the near future. Payment of dividends would depend upon our profitability at
the time, cash available for those dividends, and other factors.
Our future capital needs could result in
dilution to investors; additional financing could be unavailable or have unfavorable terms.
Our future capital
requirements will depend on many factors, including cash flow from operations, progress in our present operations, competing market
developments, and our ability to market our products successfully. It may be necessary to raise additional funds through equity
or debt financings. Any equity financings could result in dilution to our then-existing stockholders. Sources of debt financing
may result in higher interest expense. Any financing, if available, may be on terms unfavorable to us. If adequate funds are not
obtained, we may be required to reduce or curtail operations.
The rights of the holders of common stock may be impaired by
the potential issuance of preferred stock.
Our board of directors
has the right, without stockholder approval, to issue preferred stock with voting, dividend, conversion, liquidation or other rights
which could adversely affect the voting power and equity interest of the holders of common stock, which could be issued with the
right to more than one vote per share, and could be utilized as a method of discouraging, delaying or preventing a change of control.
The possible negative impact on takeover attempts could adversely affect the price of our common stock.
FORWARD-LOOKING STATEMENTS
This annual report on Form
10-K includes forward-looking statements. Forward-looking statements are not statements of historical fact but rather reflect our
current expectations, estimates and predictions about future results and events. These statements may use words such as "anticipate,"
"believe," "estimate," "expect," "intend," "predict," "project" and
similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on our
management's beliefs and assumptions, using information currently available to us. These forward-looking statements are subject
to risks, uncertainties and assumptions, including but not limited to, risks, uncertainties and assumptions discussed in this annual
report. Factors that can cause or contribute to these differences include those described under the headings "Risk Factors"
and "Management Discussion and Analysis of Financial Condition."
If one or more of these
or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially
from what we projected. Any forward-looking statement you read in this annual report reflects our current views with respect to
future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations,
growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting
on our behalf are expressly qualified in their entirety by this paragraph. You should specifically consider the factors identified
in this annual report which would cause actual results to differ before making an investment decision. Except as may be required
under applicable securities laws, we undertake no duty to update any of the forward-looking statements.
Item 1B Unresolved Staff Comments.
Not required
for a smaller reporting company.
Item 2. Properties.
MedeFile leases its main
office which is located at 301 Yamato Rd, Boca Raton, FL 33431, on a month to month basis. The Company currently pays
rent of $1,478 per month.
Item 3. Legal Proceedings.
From time to time,
the Company may become involved in litigation relating to claims arising out of it operations in the normal course of
business. We are not currently involved in any legal proceedings or litigation and, to the best of our knowledge, no
governmental authority is contemplating any proceeding in which we are a party or to which any of our properties is subject,
which would reasonable be likely to have a material adverse effect on the Company,
Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities.
Our common stock is quoted
on the OTCQB under the symbol MDFI.
The following table sets forth, for the periods
indicated, the range of high and low intraday closing bid information per share of our common stock.
|
|
High |
|
|
Low |
|
Quarter ended 03/31/13 |
|
$ |
1.01 |
|
|
$ |
0.28 |
|
Quarter ended 06/30/13 |
|
$ |
1.00 |
|
|
$ |
0.36 |
|
Quarter ended 09/30/13 |
|
$ |
1.30 |
|
|
$ |
0.40 |
|
Quarter ended 12/31/13 |
|
$ |
1.00 |
|
|
$ |
0.40 |
|
Quarter ended 03/31/14 |
|
$ |
0.50 |
|
|
$ |
0.10 |
|
Quarter ended 06/30/14 |
|
$ |
0.14 |
|
|
$ |
0.01 |
|
Quarter ended 09/30/14 |
|
$ |
0.05 |
|
|
$ |
0.03 |
|
Quarter ended 12/31/14 |
|
$ |
0.05 |
|
|
$ |
0.01 |
|
The above prices are believed
to reflect representative inter-dealer quotations, without retail markup, markdown or other fees or commissions, and may not represent
actual transactions.
As of March 31, 2015, there
were approximately 1,080 holders of record of the Company's common stock.
DIVIDEND POLICY
We do not currently pay
any cash dividends on our common stock, and we currently intend to retain any future earnings for use in our business. Any future
determination as to the payment of cash dividends on our common stock will be at the discretion of our Board of Directors and will
depend on our earnings, operating and financial condition, capital requirements and other factors deemed relevant by our Board
of Directors. There are no restrictions in the Company's articles of incorporation or bylaws that prevent the Company from declaring
dividends. The Nevada Revised Statutes, however, do prohibit the Company from declaring dividends where, after giving effect to
the distribution of the dividend:
1. The Company would not be able
to pay its debts as they become due in the usual course of business; or
2. The Company's total assets would
be less than the sum of its total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have
preferential rights superior to those receiving the distribution.
The declaration of dividends on our common
stock also may be restricted by the provisions of credit agreements that we may enter into from time to time.
SALES OF UNREGISTERED SECURITIES
None.
ISSUER PURCHASES OF EQUITY SECURITIES
None.
Item 6. Selected Financial Data.
Not required for a smaller reporting company.
Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
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. 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, except as may be required
under applicable securities laws. 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. More information about potential factors that could affect our business and financial results
is included in the section entitled "Risk Factors"
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 patients’ actual past medical records, thereby ensuring the most accurate treatment and services possible
while simultaneously reducing redundant procedures.
Interoperable with most electronic medical
record systems utilized by physician practices, clinics, hospitals and other care providers, the highly secure, feature-rich MedeFile
iPHR solution has been designed to gather all of its members’ actual medical records on behalf of each member, and create
a single, comprehensive Electronic Health Record (EHR). The member can access his/her records 24-hours a day, seven
days a week – or authorize a third party user – on any web-enabled device (PC, cell phone, PDA, e-reader, et al), as
well as the portable MedeFile flash drive/keychain or branded UBS-bracelet.
By subscribing to the MedeFile system, members
empower themselves to take control of their own health and well-being, and empower their healthcare providers to make sound and
lifesaving decisions with the most accurate, up-to-date medical information available. In addition, with MedeFile, members
benefit 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:
- We have developed products and services geared to the patient, while containing the depth and breadth of
information required by treating physicians and medical personnel.
- We do all the work of collecting and updating medical information on an ongoing basis; the function of 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), and are by no means complete or necessarily accurate records
- We provide a coherent mix of services and products that are intended to improve the quality of healthcare
by enabling the patient to manage and access the information normally retained by doctors and other care providers.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2014 COMPARED TO
YEAR ENDED DECEMBER 31, 2013
Revenues
Revenues for the year ended December 31, 2014
totaled $75,998 compared to revenues of $40,059 during the year ended December 31, 2013. The increase 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 year ended December 31, 2014 totaled $650,316, a decrease of $311,840 or approximately 32.4% compared to selling, general
and administrative expenses of $962,156 for the year ended December 31, 2013. Overall there was a decrease in the total selling,
general and administrative due mainly to decreased payroll, legal expense and consulting fees.
Depreciation Expense
Depreciation expense totaled $413 for the year
ended December 31, 2014, compared to depreciation expense of $1,116 during the year ended December 31, 2013. The decrease in depreciation
was due to assets being fully depreciated.
Amortization Expense
Amortization expense for the year ended December
31, 2014 totaled $1,339, compared to $5,246 for the year ended December 31, 2013. Amortization expense is the expensing of the
website development through May 2013. Amortization expense for 2014 was for the write off of an intangible asset.
Interest Expense
Interest expense on convertible debentures
for the year ended December 31, 2014 and 2013, was $11,525 and $1,013 respectively. The Company entered into two secured convertible
debentures during the third quarter of 2013. The notes have a 10% interest rate.
Interest expense on the discount for convertible
notes for the year ended December 31, 2014 and 2013 was $101,836 and $8,164 respectively. The conversion feature of the debentures
allows the note to be converted at a share price of $0.10.
Other Expense
Gain on change in fair value of derivate liabilities
for the year ended December 31, 2014 was $1,062,090 compared to $2,366,218 for the year ended December 31, 2013.
Loss on write-off of inventory for the year
ended December 31, 2014 was $30,000 compared to $0 for the year ended December 31, 2013.
Net Income
For the reasons stated above, our net income
the for year ended December 31, 2014 was $341,554, or $0.00 per share, an increase of $1,085,697, compared to a net income of $1,427,251,
or $0.07 per share, during the year ended December 31, 2013. 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 December 31, 2014, we had cash and cash
equivalents of $36,170, inventory of $23,412, merchant services reserve of $2,939, prepaid expenses of $5,709 and accounts
receivable of $5,425. Net cash used in operating activities for the year ended December 31, 2014 was approximately $576,221.
Current liabilities of $170,970 consisted of $47,697 for accounts payable and accrued liabilities, deferred revenues of $684, convertible
debentures (net of discount) of $122,538, and warrant liabilities of $51. We have a net negative working capital of $97,315.
Between January 29, 2015 and February 13, 2015,
the Company entered into and closed securities purchase agreements with accredited investors pursuant to which the Company sold
an aggregate of 279,099,100 shares of common stock for an aggregate purchase price of $620,000.
The accompanying financial statements
have been prepared contemplating a continuation of the Company as a going concern. The Company has reported an operating loss
of $577,175 and net income of $341,554 for the year ended December 31, 2014 and an operating loss of $922,790 and net
income of $1,427,251 for the year ended December 31, 2013 and had an accumulated deficit of $27,354,543 as of December 31,
2014. The Company has a net negative working capital of $97,315 as of December 31, 2014.
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 December 31, 2014 or as of the date of the filing of this report.
Critical Accounting Policies
The preparation of our consolidated financial
statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments
that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical
experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ
markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our
consolidated financial statements; we believe the following critical accounting policy involves the most complex, difficult and
subjective estimates and judgments:
Revenue Recognition
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.
Recent Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board (FASB)
issued Accounting Standards Updates (ASU) 2014-15 requiring an entity’s management to evaluate whether there are conditions
or events, considered in aggregate, that raise substantial doubt about entity’s ability to continue as a going concern within
one year after the date that the financial statements are issued (or within one year after the date that the financial statements
are available to be issued when applicable). The amendments in this Update are effective for the annual period ending after December
15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.
Not required for a smaller reporting company.
Item 8. Financial Statements.
Report of Independent Registered Public Accounting
Firm
To the Board of Directors and Stockholders of
Medefile International, Inc.
We have audited the accompanying consolidated balance sheet of Medefile
International, Inc. as of December 31, 2014, and the related consolidated statements of income, stockholders’ equity, and
cash flow for the year ended December 31, 2014. These financial statements are the responsibility of the entity’s management.
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Medefile International, Inc. as of December 31, 2014, and the results
of its operations and its cash flows for the year ended December 31, 2014, in conformity with accounting principles generally accepted
in the United States of America.
The accompanying consolidated financial statements
have been prepared assuming that the entity will continue as a going concern. As discussed in Note 1 to the consolidated financial
statements, the entity has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt
about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The
consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty
/s/ RBSM, LLP
RBSM, LLP
April 2, 2015
Las Vegas, Nevada
Report of Independent Registered Public Accounting
Firm
Board of Directors and Stockholders
Medefile International, Inc.
We have audited the accompanying consolidated balance sheet of Medefile
International, Inc. as of December 31, 2013, and the related consolidated statements of operation, stockholders’ deficit,
and cash flow for the year ended December 31, 2013. These financial statements are the responsibility of the entity’s management.
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of Medefile International, Inc. as of December 31, 2013,
and the results of its operation and its cash flow for the year ended December 31, 2013, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared
assuming that the entity will continue as a going concern. As discussed in Note 1 to the financial statements, the entity has suffered
recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ L.L. Bradford & Company, LLC
L.L. Bradford & Company, LLC
March 31, 2014
Las Vegas, Nevada
Medefile International, Inc. |
Consolidated Balance Sheets |
|
| |
| | |
| |
| |
| | |
| |
| |
| |
| |
Decenber 31 | | |
December 31, | |
| |
2014 | | |
2013 | |
Assets | |
| | |
| |
Current assets | |
| | | |
| | |
Cash | |
$ | 36,170 | | |
$ | 266,843 | |
Accounts receivable | |
| 5,425 | | |
| 2,914 | |
Inventory | |
| 23,412 | | |
| 54,507 | |
Merchant services reserve | |
| 2,939 | | |
| 14,818 | |
Prepaid expense | |
| 5,709 | | |
| 1,057 | |
Total current assets | |
| 73,655 | | |
| 340,139 | |
| |
| | | |
| | |
Website development, net of accumulated amortization | |
| 265,792 | | |
| 261,340 | |
Furniture and equipment, net of accumulated depreciation | |
| - | | |
| 413 | |
Intangibles | |
| - | | |
| 1,339 | |
Total assets | |
$ | 339,447 | | |
$ | 603,231 | |
| |
| | | |
| | |
Liabilities and Stockholders' (Deficit) | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 47,697 | | |
$ | 52,915 | |
Coverible debenture - net of discount | |
| 122,538 | | |
| 9,177 | |
Deferred revenues | |
| 684 | | |
| 2,075 | |
Derivative liability | |
| 51 | | |
| 1,062,141 | |
Total Current Liabilities | |
| 170,970 | | |
| 1,126,308 | |
| |
| | | |
| | |
Stockholders' (Deficit) | |
| | | |
| | |
Preferred stock, $.0001 par value: 10,000,000 authorized, | |
| | | |
| | |
no shares issued and outstanding | |
| - | | |
| - | |
Common stock, $.0001 par value: 500,000,000 authorized; | |
| | | |
| | |
225,836,554 and 40,706,899 shares issued and outstanding on | |
| | | |
| | |
December 31, 2014 and December 31, 2013, respectively | |
| 22,583 | | |
| 4,070 | |
Additional paid in capital | |
| 27,430,517 | | |
| 27,099,030 | |
Common stock to be issued | |
| 69,920 | | |
| 69,920 | |
Accumulated deficit | |
| (27,354,543 | ) | |
| (27,696,097 | ) |
Total stockholders' (deficit) | |
| 168,477 | | |
| (523,077 | ) |
Total liability and stockholders'(deficit) | |
$ | 339,447 | | |
$ | 603,231 | |
| |
| | | |
| | |
| |
| | | |
| | |
The accompanying notes are an integral part of these consolidated financial statements
Medefile International, Inc. |
Consolidated Statements of Operations |
|
| |
| | |
| |
| |
| | |
| |
| |
| | |
| |
| |
| | |
| |
| |
Year Ended December 31, | |
| |
| 2014 | | |
| 2013 | |
Revenue | |
| 75,988 | | |
| 40,059 | |
Cost of goods sold | |
| 1,095 | | |
| 1,331 | |
| |
| | | |
| | |
Gross profit | |
| 74,893 | | |
| 38,728 | |
| |
| | | |
| | |
Operating expenses | |
| | | |
| | |
Selling, general and administrative expenses | |
| 650,316 | | |
| 962,156 | |
Depreciation and amortization expenses | |
| 1,752 | | |
| 6,362 | |
Total operating expenses | |
| 652,068 | | |
| 968,518 | |
| |
| | | |
| | |
Loss from operations | |
| (577,175 | ) | |
| (929,790 | ) |
| |
| | | |
| | |
Other income (expenses) | |
| | | |
| | |
Interest expense - convertible note | |
| (11,525 | ) | |
| (1,013 | ) |
Interest expense - discount on convertible note | |
| (101,836 | ) | |
| (8,164 | ) |
Loss on write-off of inventory | |
| (30,000 | ) | |
| - | |
Change of derivative liabilities | |
| 1,062,090 | | |
| 2,366,218 | |
Total other income (expense) | |
| 918,729 | | |
| 2,357,041 | |
| |
| | | |
| | |
Gain (loss) before income tax | |
| 341,554 | | |
| 1,427,251 | |
Provision for income tax | |
| | | |
| | |
Net income (loss) | |
$ | 341,554 | | |
$ | 1,427,251 | |
| |
| | | |
| | |
Net loss per share: basic and diluted | |
$ | 0.00 | | |
$ | 0.07 | |
| |
| | | |
| | |
Weighted average share outstanding | |
| 80,626,245 | | |
| 21,232,854 | |
basic and diluted | |
| | | |
| | |
The accompanying notes are an integral part of these consolidated financial statements
Medefile International, Inc. |
Consolidated Statement of Stockholders' Equity |
|
| |
| Preferred | | |
| Common Stock | | |
| | | |
| | |
| |
| Shares | | |
| Par | | |
| Shares | | |
| Par | | |
| | | |
| Common Stock | | |
| Accumulated | | |
| | |
| |
| Outstanding | | |
| Amount | | |
| Outstanding | | |
| Amount | | |
| APIC | | |
| Payable | | |
| Deficit | | |
| Total | |
Balance December 31, 2012 | |
| - | | |
$ | - | | |
| 11,413,189 | | |
$ | 1,141 | | |
$ | 23,886,499 | | |
$ | - | | |
$ | (29,123,348 | ) | |
$ | (5,235,708 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock sale | |
| | | |
| | | |
| 17,421,429 | | |
| 1,742 | | |
| 913,258 | | |
| | | |
| | | |
| 915,000 | |
Adjustment to derivative liability | |
| | | |
| | | |
| | | |
| 2,190,460 | | |
| | | |
| | | |
| 2,190,460 | |
Covertible debenture discount | |
| | | |
| | | |
| | | |
| | | |
| 110,000 | | |
| | | |
| | | |
| 110,000 | |
Common stock issued for | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
anti-dilution | |
| | | |
| | | |
| 11,872,281 | | |
| 1,187 | | |
| (1,187 | ) | |
| | | |
| | | |
| - | |
Common stock payable | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 69,920 | | |
| | | |
| 69,920 | |
Net income | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 1,427,251 | | |
| 1,427,251 | |
Balance December 31, 2013 | |
| - | | |
| - | | |
| 40,706,899 | | |
| 4,070 | | |
| 27,099,030 | | |
| 69,920 | | |
| (27,696,097 | ) | |
| (523,077 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
for anti-dilution | |
| | | |
| | | |
| 150,129,655 | | |
| 15,013 | | |
| (15,013 | ) | |
| | | |
| | | |
| - | |
Common stock sale | |
| | | |
| | | |
| 35,000,000 | | |
| 3,500 | | |
| 346,500 | | |
| | | |
| | | |
| 350,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Income | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 341,554 | | |
| 341,554 | |
Balance December 31, 2014 | |
| - | | |
$ | - | | |
| 225,836,554 | | |
$ | 22,583 | | |
$ | 27,430,517 | | |
$ | 69,920 | | |
$ | (27,354,543 | ) | |
$ | 168,477 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
The accompanying notes are an integral part of these consolidated financial statements
Medefile International, Inc. |
Consolidated Statements of Cash Flows |
|
| |
| |
| |
| |
| |
Year Ended December 31, | |
| |
2014 | | |
2013 | |
Cash flows from operating activities | |
| | | |
| | |
Net income | |
$ | 341,554 | | |
$ | 1,427,251 | |
Adjustments to reconcile net loss to net | |
| | | |
| | |
cash used in operating activities: | |
| | | |
| | |
Depreciation | |
| 413 | | |
| 1,116 | |
Amortization | |
| 1,339 | | |
| 5,245 | |
Interest expense - discount on convetible debenture | |
| 101,836 | | |
| 8,164 | |
Loss on write-off of inventory | |
| (30,000 | ) | |
| - | |
(Gain)loss in fair value of derivitave liabilities | |
| (1,062,090 | ) | |
| (2,366,218 | ) |
Changes in operating assets and liabilities | |
| | | |
| | |
Accounts receivable | |
| (2,511 | ) | |
| (2,523 | ) |
Inventory | |
| 61,095 | | |
| 951 | |
Prepaid insurance | |
| (4,652 | ) | |
| (59 | ) |
Accounts payable and accrued liabilities | |
| (5,218 | ) | |
| (85,296 | ) |
Accrued interest – convertible debenture
| |
| 11,525 | | |
| 1,013 | |
Merchant service reserves | |
| 11,879 | | |
| 49,501 | |
Deferred revenue | |
| (1,391 | ) | |
| (2,238 | ) |
Net Cash used in operating activities | |
| (576,221 | ) | |
| (963,093 | ) |
| |
| | | |
| | |
Cash flows from investing activities | |
| | | |
| | |
Website development | |
| (4,452 | ) | |
| (99,340 | ) |
Net cash used in investing activities | |
| (4,452 | ) | |
| (99,340 | ) |
| |
| | | |
| | |
Cash flow from financing activities | |
| | | |
| | |
Proceeds fromm convertible debenture - related party | |
| - | | |
| 110,000 | |
Proceeds from common stock subscriptions | |
| 350,000 | | |
| 984,920 | |
Net cash provided by financing activities | |
| 350,000 | | |
| 1,094,920 | |
| |
| | | |
| | |
Net increase (decrease) in cash and cash equivalents | |
| (230,673 | ) | |
| 32,487 | |
Cash and cash equivalents at beginning of period | |
| 266,843 | | |
| 234,356 | |
Cash and cash equivalents at end of period | |
$ | 36,170 | | |
$ | 266,843 | |
| |
| | | |
| | |
Supplemental disclosure of cash flow information | |
| | | |
| | |
Cash paid for interest | |
$ | - | | |
$ | - | |
Cash paid for income taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
The accompanying notes are an integral part of these consolidated financial statements
Medefile
International, Inc.
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS
Basis of Presentation
The accompanying financial statements present on a consolidated
basis the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have
been eliminated in consolidation
Nature of Business Operations
Medefile International, Inc. has developed
and globally markets a proprietary, patient-centric, Internet-enabled Personal Health Record (iPHR) system for gathering, digitizing,
maintaining, accessing and sharing an individual’s actual medical records. Medefile's goal is to revolutionize the medical
industry by bringing patient-centric digital technology to the business of medicine. Medefile intends to accomplish its objective
by providing individuals with a simple and secure way to access their lifetime of actual medical records in an efficient and cost-effective
manner. Medefile's products and services are designed to provide healthcare providers with the ability to reference their patients’
actual past medical records, thereby ensuring the most accurate treatment and services possible while simultaneously reducing redundant
procedures.
Interoperable with most electronic medical
record systems utilized by physician practices, clinics, hospitals and other care providers, the highly secure, feature-rich MedeFile
iPHR solution has been designed to gather all of its members’ actual medical records on behalf of each member, and create
a single, comprehensive Electronic Health Record (EHR). The member can access his/her records 24-hours a day, seven days a week
– or authorize a third party user – on any web-enabled device (PC, cell phone, PDA, e-reader, et al), as well as the
portable MedeFile flash drive/keychain or branded UBS-bracelet.
By subscribing to the MedeFile system, members
empower themselves to take control of their own health and well-being, and empower their healthcare providers to make sound and
lifesaving decisions with the most accurate, up-to-date medical information available. In addition, with MedeFile, members
enjoy the peace of mind that comes from knowing that their medical records are protected from fire, natural disaster, document
misplacement or the closing of a medical or dental practice.
MedeFile believes it enjoys a number of competitive
advantages over other firms within the medical records marketplace, including:
· |
MedeFile has developed products and services geared to the patient, while containing the depth and breadth of information required by treating physicians and medical personnel. |
· |
MedeFile does all the work of collecting and updating medical information on an ongoing basis; the function of our products’ dependence on the patient taking action is minimal – particularly when compared to patient action required to support competing solutions. |
· |
MedeFile provides a complete medical record. Other companies claim complete longitudinal records, but in reality only provide histories (usually completed by the member/patient), which are by no means complete or necessarily accurate records. |
· |
MedeFile provides a coherent mix of services and products that are intended to improve the quality of healthcare by enabling the patient to manage and access the information normally retained by doctors and other care providers. |
Going Concern
The accompanying financial
statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company has
reported an operating loss of $577,175 and net income of $341,554 for the year ended December 31, 2014. During the
comparable year ended 2013, the Company had an operating loss of $922,790 and net income of $1,427,251, as a direct result
of the change in valuation of the Company’s warrant derivative. The Company had an accumulated deficit of $27,354,543
as of December 31, 2014. The Company has negative working capital of $97,315 as of December 31, 2014.
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern. The operating losses raise substantial doubt about the Company's
ability to continue as a going concern. The Company's ability to obtain additional financing depends on the availability of its
borrowing capacity, the success of its growth strategy and its future performance, each of which is subject to general economic,
financial, competitive, legislative, regulatory, and other factors beyond the Company's control.
We will need additional investments in order
to continue operations 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.
Cash and Cash Equivalents
For purposes of these financial statements,
cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months.
Concentrations of Credit Risk
Financial instruments and related items, which
potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places
its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the
FDIC insurance limit. Currently our operating account is not above the FDIC limit.
Advertising
The Company follows the policy of charging
the costs of advertising to expense as incurred. The Company incurred advertising costs for the year ended December 31, 2014 and
2013 of approximately $0 and $0 respectively.
Income Taxes
The Company accounts for income
taxes under the asset and liability method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this
method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis
of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The
effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the
enactment date.
The Company records net deferred tax assets
to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company
considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected
future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred
tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize
deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation
allowance which would reduce the provision for income taxes.
The Company follows the accounting guidance
which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position
will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical
merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially
and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition.
Property and Equipment
Property and equipment are stated at cost.
When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts
and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed
in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years
up to 10 years.
Trademark Costs
Trademark costs incurred in the registration
and acquisition of trademarks and trademark rights are capitalized. These costs will be amortized over the legal life of the related
trademark once the trademark is awarded. The Company performs an annual review of its identified intangible assets to determine
if facts and circumstances exist which indicate that the useful life is shorter than originally estimated or that the carrying
amount of the assets may not be recoverable.
The Company expenses all software costs associated
with the conceptual formulation and evaluation of alternatives until the application development stage has been reached. Costs
to improve or support the technology are expensed as these costs are incurred.
Website Development
The Company's policy is to capitalize website
development costs at original cost and amortize the balance over the life of the product. The life of website is determined at
completion of the project. The Company reviews the amounts capitalized for impairment whenever events or circumstances indicate
that the carrying amounts of the assets may not be recoverable.
The Company expenses all development costs
associated with the conceptual formulation and evaluation of alternatives until the application development stage has been reached.
Costs to improve or support the technology are expensed as these costs are incurred.
Revenue Recognition
The Company generates revenue from licensing
the right to utilize its proprietary software for the storage and distribution of healthcare information to individuals and affinity
groups. For revenue from product sales, the Company recognizes revenue on four basic criteria which must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed
and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's
judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period
the related sales are recorded.
Deferred Revenue
The Company generally receives subscription
fees for its services. From time to time, the Company will receive quarterly or annual subscriptions paid in advance and deferred
revenue is recorded at that time. The deferred revenue is amortized into revenue on a pro- rata basis each month. Customers with
quarterly or annual subscriptions may cancel their subscriptions and request a refund for future months' revenues at any time.
Therefore, a liability is recorded to reflect the amounts that are potentially refundable. At December 31, 2014 and December 31,
2013, deferred revenue totaled $684 and $2,075, respectively.
Reclassifications
Certain reclassifications have been made in
prior periods financial statements to conform to classifications used in the current period.
Recent Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board (FASB)
issued Accounting Standards Updates (ASU) 2014-15 requiring an entity’s management to evaluate whether there are conditions
or events, considered in aggregate, that raise substantial doubt about entity’s ability to continue as a going concern within
one year after the date that the financial statements are issued (or within one year after the date that the financial statements
are available to be issued when applicable). The amendments in this Update are effective for the annual period ending after December
15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.
Fair Value of Financial Instruments
Cash and Equivalents, Deposits In-Transit, Receivables, Prepaid
and Other Current Assets, Accounts Payable, Accrued Salaries and Wages and Other Current Liabilities
The carrying amounts of these items approximated
fair value.
Fair value is defined as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase
the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes
a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the
lowest priority to unobservable inputs (level 3 measurements).
Level 1—Valuations based on
quoted prices for identical assets and liabilities in active markets.
Level 2—Valuations based on observable
inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets,
quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable
or can be corroborated by observable market data.
Level 3—Valuations based on unobservable
inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These
valuations require significant judgment.
The application of the three levels of the fair value hierarchy
under Topic 820-10-35 to our assets and liabilities are described below:
| | |
| |
Fair Value Measurements | |
| | |
| |
Level 1 | | |
Level 2 | | |
Level 3 | | Total |
|
| | |
Assets | | | |
| | | |
| | |
| | |
Website development | |
$ | - | | |
$ | - | | |
$ | 265,792 | | |
$265,792 |
| | |
Total | |
$ | - | | |
$ | - | | |
$ | 265,792 | | |
$265,792 |
| |
| Liabilities | | |
| | | |
| | |
| | |
Deferred Revenues | |
$ | 684 | | |
$ | - | | |
$ | - | | |
$684 |
| | |
Derivative Liability | |
| - | | |
| - | | |
| 51 | | |
51 |
| | |
Total | |
$ | 684 | | |
$ | - | | |
$ | 51 | | |
$735 |
Impairment of Long Lived Assets
In accordance with Accounting Standards Codification
(“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets to be held and used
are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. ASC 360-10 relates to assets that can be amortized and the life can be determinable. The Company reviews property
and equipment and other long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the asset’s carrying
amount to future undiscounted net cash flows the assets are expected to generate. Cash flow forecasts are based on trends of historical
performance and management's estimate of future performance, giving consideration to existing and anticipated competitive and economic
conditions. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the projected discounted future cash flows arising from the assets or their fair values,
whichever is more determinable.
Inventory
Inventories are stated at the lower of cost
or market value. Cost is determined by the first-in, first-out basis and market being determined as the lower of replacement cost
or net realizable value. The Company records inventory write-downs for estimated obsolescence of unmarketable inventory based upon
assumptions about future demand and market conditions. For the year ended December 31, 2014 the Company had an inventory write
off of $30,000. There was no inventory write off for the year ended December 31, 2013.
Net Loss per Share
Basic and diluted loss per share amounts are
computed based on net loss divided by the weighted average number of common shares outstanding. Warrants to purchase 3,010,511
common shares were not included in the computation of diluted loss per share because the assumed conversion and exercise would
be anti-dilutive for the year ending December 31, 2014.
Management Estimates
The presentation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.
Stock Based Compensation
The Company accounts for all compensation related
to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on
the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes
pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for
compensation is valued using the market price of the stock on the date of the related agreement.
2. ACCOUNTS RECEIVABLE
Due to the collection history of the Company,
the Company does not maintain an allowance for doubtful accounts. Recognition of a specific uncollectible account is
written directly against the invoice in accounts receivable and expensed in the current period.
3. WEBSITE DEVELOPMENT
Website development consists of the following:
| |
| December 31, 2014 | | |
| December 31, 2013 | |
Website development | |
$ | 324,285 | | |
$ | 224,946 | |
Additional development | |
| 4,453 | | |
| 99,340 | |
Accumulated amortization | |
| (62,946 | ) | |
| (62,946 | ) |
Net website development | |
$ | 265,792 | | |
$ | 261,340 | |
During May 2012 the Company began redesigning its website. The
Company anticipates that the redesign will be completed by June 2015.
Amortization is calculated over a three-year period. Amortization
expense for the year ending December 31, 2014 and 2013 is $1,339 and $5,245, respectively.
4. FURNITURE AND EQUIPMENT
Furniture and equipment consists of the following:
| |
December 31, 2014 | | |
December 31, 2013 | |
Computers and equipment | |
$ | 169,286 | | |
$ | 169,286 | |
Furniture and fixtures | |
| 38,618 | | |
| 38,618 | |
Subtotal | |
| 207,904 | | |
| 207,904 | |
Less: accumulated depreciation | |
| (207,904 | ) | |
| (207,491 | ) |
Net furniture and equipment | |
$ | - | | |
$ | 413 | |
Depreciation is calculated by using the straight-line
method over the estimated useful life. Depreciation expense totaled $413 and $1,116 for the year ended December 31, 2014
and 2013, respectively.
5. CONVERTIBLE DEBEBTURE – RELATED
PARTY
The Company entered into two 10% Secured Convertible
Debentures with a significant shareholder. The debentures carry a one year term. The debentures were issued in the amount of $50,000
on November 4, 2013 and $60,000 on December 17, 2013. Both debentures have a conversion feature at a share price of $0.10. The
Company recognized a beneficial conversion feature (BCF) due to the intrinsic value of the conversion rate compared to the market
price of the common stock as of the grant date. A discount is computed based on the share value at the time of issuance and amortized
over the period of the debenture.
| |
December 31, 2014 | | |
December 31, 2013 | |
Convertible debenture – related party | |
$ | 122,538 | | |
$ | 111,013 | |
Beneficial conversion feature | |
| - | | |
| (101,836 | ) |
Convertible debenture, net of BCF | |
$ | 122,538 | | |
$ | 9,177 | |
6. WARRANT LIABILITY
In connection with certain securities purchase
agreements entered into during the third quarter of 2011 and the second quarter of 2012 (see Note 7), the Company granted warrants
with ratchet provisions. The warrants contain an expiration date of four years from the date of grant. During the first two years
of grant, if the Company issues any additional shares of common stock at a price per share less than the exercise price in effect,
the exercise price will be adjusted to equal the average price per share received by the Company for the additional shares issued.
After the first two years, if the Company issues any additional shares of common stock at a price per share less than the exercise
price in effect, the exercise price will be adjusted using a formula based on the existing exercise price, the outstanding shares
before and after the issuance of such shares, and the average price during the issuance of such shares. In addition to the exercise
price adjustment, the number of shares upon exercise of the warrants is also subject to adjustment.
Upon grant, the Company assesses the fair value
of the warrants using the Black Scholes pricing model and records a warrant liability for the value. The Company then assesses
the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the warrant liability to the
new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility
using weekly pricing observations for recent periods that correspond to the expected life of the warrants. The risk-free interest
rate is based on U.S. Treasury securities rates.
Due to the ratchet provisions, the Company
treats the warrants as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging”
(ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative
and to any freestanding financial instruments that potentially settle in an entity’s own common stock.
As of December 31, 2014, these warrants include
the following:
Warrants granted during July 2011 in connection
with the sale of 35,461 shares of common stock with the right to originally purchase up to 35,461 shares of the Company’s
common stock with an original exercise price of $2.50. Due to the issuance of the Company’s common stock in April 2012, the
exercise price was adjusted to $0.50 and the number of shares to 1,808,511. Fair value was determined using the following variables:
| |
Grant Date | | |
December 31, 2014 | |
Risk-free interest rate at grant date | |
| 1.21 | % | |
| 1.38 | % |
Expected stock price volatility | |
| 194.9 | % | |
| 143.1 | % |
Expected dividend payout | |
| - | | |
| - | |
Expected option in life-years | |
| 4 | | |
| 51 | |
Warrants granted during April 2012 in connection
with the sale of 100,000 shares of the Company’s preferred stock to a significant shareholder and brother of the Chief Executive
Officer with the right to purchase up to 200,000 shares of the Company’s common stock with an exercise price of $0.50. Fair
value was determined using the following variables:
| |
Grant Date | | |
December 31, 2014 |
| |
Risk-free interest rate at grant date | |
| 0.64 | % | |
| 0.00 |
% | |
Expected stock price volatility | |
| 174.3 | % | |
| 143.1 |
% | |
Expected dividend payout | |
| - | | |
| - |
| | |
Expected option in life-years | |
| 4 | | |
| 1.28 |
| | |
Warrants granted during April 2012 in connection
with the sale of 1,000,000 shares of the Company’s common stock with an exercise price of $0.50.
| |
Grant Date | | |
December 31, 2014 | |
Risk-free interest rate at grant date | |
| 0.63 | % | |
| 0.00 | % |
Expected stock price volatility | |
| 174.8 | % | |
| 143.1 | % |
Expected dividend payout | |
| - | | |
| - | |
Expected option in life-years | |
| 4 | | |
| 1.3 | |
Transactions involving warrants with ratchet provisions are as follows:
| |
Number of Warrants | | |
Weighted-Average Price Per Share | |
Outstanding at December 31, 2011 | |
| 3,008,511 | | |
$ | 0.50 | |
Granted | |
| | | |
| | |
Exercised | |
| | | |
| | |
Canceled or expired | |
| | | |
| | |
Additional due to ratchet trigger | |
| | | |
| | |
Outstanding at December 31, 2013 | |
| 3,008,511 | | |
| 0.50 | |
Granted | |
| | | |
| | |
Exercised | |
| | | |
| | |
Canceled or expired | |
| | | |
| | |
Addition due to ratchet trigger | |
| | | |
| | |
Outstanding at December 31, 2014 | |
| 3,008,511 | | |
$ | 0.50 | |
As of December 31, 2014 and December 31, 2013, the warrant liability
consisted of the following:
| |
December 31, 2014 | | |
December 31, 2013 | |
Warrant liability (beginning balance) | |
$ | 5,618,819 | | |
$ | 5,618,819 | |
Additional liability due to new grants | |
| | | |
| | |
Loss(gain) on changes in fair market value of warrant liability | |
| (5,618,768 | ) | |
| (4,556,678 | ) |
Net warrant liability | |
$ | 51 | | |
$ | 1,062,141 | |
Change in fair market value of warrant liability
resulted in a gain totaling $1,062,090 and $2,366,218 for the years ended December 31, 2014 and 2013, respectively.
7. EQUITY
Common Stock
On October 8, 2012, the Company filed a Certificate
of Amendment to its Articles of Incorporation with the Secretary of State of Nevada, pursuant to which (i) the Company effected
a 5,000-to-1 reverse split of its common stock and (ii) the number of authorized shares of the Company’s common stock decreased
from 75,000,000,000 to 100,000,000. The market effective date of the reverse split was October 9, 2012. The effect of
the stock split has been applied retroactively. On December 19, 2013 the Company increased its authorized shares of common stock
from 100,000,000 to 500,000,000.
2013
On January 17, 2013 the Company entered into
a Securities Purchase Agreement pursuant to which the Company sold 400,000 shares of common stock for an aggregate purchase price
of $200,000
On April 15, 2013, the Company entered into
a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 2,000,000 shares of common stock for
an aggregate purchase price of $400,000.
On May 1, 2013 the Company issued an aggregate of 11,872,281shares
of common stock to purchasers under the securities purchase agreements entered into by the Company in July 2011 and April 2012
pursuant to anti-dilution rights held by such purchasers.
On August 27, 2013, the Company entered into
a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 42,743 shares of common stock for
an aggregate purchase price of $29,920.
On September 23, 2013, the Company entered
into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 21,429 shares of common stock
for an aggregate purchase price of $15,000.
On December 17, 2013, the Company entered into
a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 2,000,000shares of common stock for
an aggregate purchase price of $40,000. The shares are currently unissued
On December 20, 2013, the Company entered into
a Securities Purchase Agreement with accredited investors pursuant to which the Company sold 15,000,000 shares of common stock
for an aggregate purchase price of $300,000.
2014
On April 17, 2014, the Company issued an aggregate of 150,129,655
shares of common stock to certain shareholders of the Company, in accordance with anti-dilution rights held by such shareholders,
including 125,584,200 shares to Lyle Hauser and 24,545,455 shares to purchasers under Securities Purchase Agreements entered into
by the Company in July 2011. Lyle Hauser is the Company's largest shareholder.
On July 3, 2014, the Company entered into a Securities Purchase
Agreement with accredited investors pursuant to which the Company sold 15,000,000 shares of common stock for an aggregate purchase
price of $200,000.
On July 6, 2014, the Company entered into a Securities Purchase
Agreement with accredited investors pursuant to which the Company sold 20,000,000 shares of common stock for an aggregate purchase
price of $150,000.
Preferred Stock
On April 10, 2012, the Company filed a certificate
of designation of Series B Preferred Stock (the “Series B Certificate of Designation”) with the Secretary of State
of Nevada, pursuant to which 100,000 shares of the Company’s preferred stock were designated as Series B Convertible Preferred
Stock (the “Series B Preferred Stock”). Pursuant to the Series B Certificate of Designation, the Series
B Preferred Stock:
● |
Has a liquidation preference over the common stock equal to the stated value of $1.00 per share. |
● |
Votes as a single class with the common stock and entitles its holders, for each share of Series B Preferred Stock, to cast such number of votes equal to 0.00051% of the total number of votes entitled to be cast. Accordingly, a holder of all 100,000 shares of Series B Preferred Stock will have the right to cast 51% of the total number of votes entitled to be cast. |
● |
Will automatically convert into common stock at a ratio of 2 shares of common stock for each share of Series B Preferred Stock, effective upon the Company’s filing of a certificate of amendment to its articles of incorporation. |
On April 12, 2012, the Company entered into
a securities purchase agreement with Lyle Hauser (the “Preferred Stock Investor”). Lyle Hauser is the Company’s
largest shareholder and the brother of Kevin Hauser, the Company’s then-chief executive officer. Pursuant to the purchase
agreement, on April 12, 2012, the Company sold 100,000 shares of Series B Preferred Stock to the Preferred Stock Investor for an
aggregate purchase price of $100,000, and the Company issued four-year warrants to purchase 200,000 shares of common stock to the
Preferred Stock Investor with an exercise price of $0.50. On April 23, 2012, 100,000 Series B Preferred shares were converted to
200,000 shares of common stock
Stock Options
2006 Incentive Stock Plan
In January 2006, the Board of Directors of
the Company approved an Incentive Stock Plan, pursuant to which they have initially reserved 10,000,000 shares of common Stock
for issuance. Under the 2006 Incentive Stock, the Board has granted an aggregate of 5,640,000 options to employees pursuant to
certain employment agreements. All previously granted options have expired unexercised.
2008 Amended and Restated Incentive Stock
Plan
In November 2008, our Board of Directors adopted
the 2008 Equity Incentive Plan and subsequently amended it in January 2009, June 2009 and July 2009 (the “2008 Plan”).
The purpose of the 2008 Plan was to provide an incentive to attract and retain directors, officers, consultants, advisors and employees
whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons
into our development and financial success. Under the 2008 Plan, the Company is authorized to issue incentive stock options intended
to qualify under Section 422 of the Code, non-qualified stock options, stock appreciation rights, performance shares, restricted
stock and long term incentive awards. The 2008 Plan will be administered by our Board of Directors until such time as such authority
has been delegated to a committee of the board of directors.
2010 Incentive Stock Plan
In December 2009, our Board of Directors adopted
the 2010 Equity Incentive Plan (the “2010 Plan”). The purpose of the 2010 Plan was to provide an incentive to attract
and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense
of proprietorship and to stimulate an active interest of such persons into our development and financial success. Under the 2010
Plan, we are authorized to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified
stock options, stock appreciation rights, performance shares, restricted stock and long term incentive awards. The 2010 Plan will
be administered by our Board of Directors until such time as such authority has been delegated to a committee of the Board of Directors.
Other Warrants
During the first quarter of 2008 the Company
awarded 35 Common Stock warrants, at an exercise price of $2,800 per share, to former Board members at the quoted
stock price on the effective date of the awards. The warrants have an expiration date of five years from the issue date and contain
provisions for a cash exercise. The estimated value of the compensatory warrants granted to non-employees in exchange for services
and financing expenses was determined using the Black-Scholes pricing model and the following assumptions:
Risk-free interest rate at grant date |
|
|
4.75 |
% |
Expected stock price volatility |
|
|
155 |
% |
Expected dividend payout |
|
|
-- |
|
Expected option in life-years |
|
|
5 |
|
On June 22, 2011, the Company awarded 2,000
Common Stock warrants, at an exercise price of $50 per share, to consultants for services at the quoted stock price
on the effective date of the awards. The warrants have an expiration date of four years from the issue date and contain provisions
for a cash exercise. The estimated value of the compensatory warrants granted to non-employees in exchange for services and financing
expenses was determined using the Black-Scholes pricing model and the following assumptions listed below:
On July 28, 2011, the Company awarded 27,000 Common Stock Warrants,
at an exercise price of $25 per share to consultants for services at the quoted stock price on the effective date of the awards.
The warrants have an expiration date of three years from the issue date and contain provisions for a cash exercise. The estimated
value of the compensatory warrants granted to non-employees in exchange for services was determined using the Black-Scholes pricing
model and the assumptions listed below. These warrants have expired as of December 31, 2014.
Risk-free interest rate at grant date |
|
|
0.39 |
% |
Expected stock price volatility |
|
|
172.1 |
% |
Expected dividend payout |
|
|
-- |
|
Expected option in life-years |
|
|
4 |
|
Transactions involving warrants are summarized as follows:
| |
Number of Warrants | | |
Weighted-Average Price Per Share | |
Outstanding at December 31, 2012 | |
| 29,000 | | |
| 30.07 | |
Granted | |
| - | | |
| - | |
Exercised | |
| - | | |
| - | |
Canceled or expired | |
| - | | |
| - | |
Outstanding at December 31, 2013 | |
| 29,000 | | |
$ | 26.72 | |
Granted | |
| - | | |
| - | |
Exercised | |
| - | | |
| - | |
Canceled or expired | |
| -27,000 | | |
| 25.00 | |
Outstanding at December 31, 2014 | |
| 2,000 | | |
$ | 50.00 | |
Warrants Outstanding | |
| |
| | |
Weighted | |
| |
| | |
Average | |
| |
| | |
Remaining | |
Exercise | |
Number | | |
Contractual | |
Prices | |
| Outstanding | | |
| Life (years) | |
$50 | |
| 2,000 | | |
| .75 | |
50 | |
| 2,000 | | |
| .75 | |
8. SUBSEQUENT EVENTS
On February 10, 2015 the Company increased
its authorized shares of common stock from 500,000,000 to 700,000,000.
During the first quarter of 2015, the Company issued an aggregate
of 279,099,100 shares of common stock to purchasers under the securities purchase agreements entered into by the Company in January
and February 2015 for aggregate price of $620,000, and the Company issued 18,018,018 shares of common stock to Lyle Hauser in exchange
for $40,000 of debt owed by the Company to Mr. Hauser.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
Item 9A. Controls
and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and
procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate
to allow timely decisions regarding required disclosure.
As of the end of the
period covered by this Annual 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's Report on Internal Control over
Financial Reporting
Management is responsible
for establishing and maintaining adequate internal control over financial reporting of the Company. Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies and procedures may deteriorate.
Management, with
the participation of our principal executive and financial officer, have evaluated the effectiveness of our internal control
over financial reporting as of December 31, 2014 based on criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, because
of the Company’s limited resources and limited number of employees, management concluded that as of December 31, 2014,
our internal controls over financial reporting is not effective in providing reasonable assurance regarding the reliability
of financial reporting and preparation of financial statements for external purposes in accordance with U.S. generally
accepted accounting principles.
This annual report does
not include an attestation report of the Company’s independent registered public accounting firm regarding internal control
over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered
public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual
report.
Limitations on Effectiveness of Controls and Procedures
Our management, including
our Chief Executive Officer (Principal Executive and Financial Officer), does not expect that our disclosure controls and procedures
or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but
are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of any system of controls 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. Over time, controls may become inadequate because of changes in conditions, or the degree
of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
Changes in internal controls
There have been no changes
in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule
13a-15 or 15d-15 under the Exchange Act that occurred during the quarter ended December 31, 2014 that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
PART III
Item 10. Directors, Officers and Corporate Governance.
The following tables set
forth certain information with respect to our directors and officers. The following persons serve as our directors and executive
officers:
Name |
|
Age |
|
Position |
Niquana Noel |
|
33 |
|
Chairwoman, President and Chief Executive Officer |
|
|
|
|
|
Michael S. Delin |
|
50 |
|
Director |
Frank Jakovac |
|
64 |
|
Director |
Our executive officers
are appointed by and serve at the discretion of our Board of Directors. There are no family relationships between any director
and/or any executive officer.
Background of Executive Officers and Directors
Niquana Noel has
served as Chairwoman, President and Chief Executive Officer of the Company since January 2014. Ms. Noel joined the Company as operations
manager in 2008 and served as Chief Operations Officer and director of the Company since August 2013. Previously, Ms. Noel served
as the Executive Assistant to a Florida-based serial entrepreneur who had successful business interests ranging from the ownership
and operation of cemeteries in Maryland, Virginia and Florida; to the ownership and operation of exotic, high performance car dealerships
and auto accessory businesses. Ms. Noel studied Business Management at Florida International University. Ms. Noel’s experience
as an executive of the Company qualifies her to serve on the Company’s board of directors.
Michael Delin has
served on our board of directors since December 2008. After providing specialty consulting services to the management
team, he joined MedeFile’s Board of Directors in December 2008. Mr. Delin is the sole proprietor and operator
of an accounting and tax preparation service. He also currently serves as the Chief Financial Officer of a construction
company that is based in Southwest Florida. He is a graduate of the University of South Florida where he earned a Bachelor
of Arts degree in Accounting. Mr. Delin’s financial and accounting knowledge and experience qualify him to serve on the Company’s
board of directors.
Frank Jakovac has
served as a director of the Company since August 2013. Mr. Jakovac is Co- Founder of Gateway Global Delivery Inc., a third-party
logistics company, and has been its Chairman since 2006. Mr. Jakovac has a B. Sc. Degree from Edinboro University and also serves
on its Board of Trustees. Mr. Jakovac’s business executive and management experience qualifies him to serve on the Company’s
board of directors.
COMMITTEES
We currently do not maintain
any committees of the Board of Directors. Given our size and the development of our business to date, we believe that the board
through its meetings can perform all of the duties and responsibilities which might be contemplated by a committee. Our
board of directors is expected to appoint an audit committee, nominating committee and compensation committee, and to adopt charters
relative to each such committee, in the near future. We intend to appoint such persons to the committees of the board of directors
as are expected to be required to meet the corporate governance requirements imposed by a national securities exchange, although
we are not required to comply with such requirements until we elect to seek listing on a national securities exchange, and we are
under no obligation to do so.
Except as may be provided
in our bylaws, we do not currently have specified procedures in place pursuant to which whereby security holders may recommend
nominees to the Board of Directors.
Board Leadership Structure and Role in Risk Oversight
Although we have not adopted
a formal policy on whether the Chairwoman and Chief Executive Officer positions should be separate or combined, we have traditionally
determined that it is in the best interests of the Company and its shareholders to combine these roles. Niquana Noel has
served as our Chairwoman and Chief Executive Officer since January 2014. We believe it is in the best interest of the Company to
have the Chairwoman and Chief Executive Officer roles combined due to our small size and limited resources.
Our Board of Directors
is primarily responsible for overseeing our risk management processes. The Board of Directors receives and reviews periodic
reports from management, auditors, legal counsel, and others, as considered appropriate regarding our company’s assessment
of risks. The Board of Directors focuses on the most significant risks facing our company and our company’s general risk
management strategy, and also ensure that risks undertaken by our company are consistent with the Board’s appetite for risk.
While the Board oversees our company, our company’s management is responsible for day-to-day risk management processes. We
believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our
Board leadership structure supports this approach.
CODE OF ETHICS
We have adopted a Code of Ethics and Business
Conduct that applies to our officers, directors and employees. The Code of Ethics is available on our website found at www.medefile.com.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Because we do not have a class of equity securities
registered pursuant to Section 12 of the Exchange Act, we are not subject to Section 16(a) of the Exchange Act.
Item 11. Executive Compensation.
The following table sets forth information
concerning the compensation for services in all capacities rendered to us for the two fiscal years ended December 31, 2014 and
2013, of our Chief Executive Officer. There were no other executive officers whose total annual compensation exceeded $100,000
during the years ended December 31, 2014 and 2013.
SUMMARY COMPENSATION TABLE
Name and
Principal
Position |
|
Year |
|
|
Salary
($) |
|
Bonus
($) |
|
Stock
Awards
($) |
|
Option
Awards
($) |
|
|
Non-Equity
Incentive Plan
Compensation
($) |
|
Nonqualified
Deferred
Compensation
Earnings
($) |
|
All Other
Compensation
($) |
|
Total
($) |
|
Kevin Hauser (1) |
|
|
2013 |
|
|
|
125,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000 |
|
President and CEO |
|
|
2013 |
|
|
|
7,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,292 |
|
Niquana Noel President and CEO (2) |
|
|
2014 |
|
|
|
93,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,846 |
|
(1) Mr. Hauser resigned on January 27, 2014.
(2) Ms. Noel was appointed President and CEO on January 28, 2014.
Outstanding Equity Awards at Fiscal Year-End
as of December 31, 2014
None.
Director Compensation
for Year Ending December 31, 2014
The following table sets forth director compensation
for the year ended December 31, 2013 (excluding compensation to our executive officers set forth in the summary compensation table
above).
Name | |
| Fees Earned or Paid in Cash ($)(1) | | |
| Stock Awards ($) | | |
| Option Awards ($) | | |
| Non-Equity Incentive Plan Compensation ($) | | |
| Nonqualified Deferred Compensation Earnings ($) | | |
| All Other Compensation ($) | | |
| Total ($) | |
Niquana Noel | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | |
Kevin Hauser (1) | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | |
Frank Jacovac | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| --- | | |
| -- | | |
| -- | |
Michael Delin(2) | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | |
(1) Kevin Hauser resigned as of January 27, 2014.
(2) Does not include $25,200 for accounting services performed for
the fiscal year 2014 through a company solely owned by Michael Delin.
EMPLOYMENT AGREEMENTS
On December 10, 2008, MedeFile
entered into an employment agreement with Kevin Hauser pursuant to which Mr. Hauser agreed to continue to serve as the Company’s
Vice President of Sales and New Business Development for a term of three years. The term of his agreement automatically extended
for successive one year periods unless otherwise terminated by the parties in accordance with the terms of the agreement. Pursuant
to his agreement, Mr. Hauser was entitled to receive an annual salary of $216,000. He was also entitled to a discretionary
bonus from time to time during the term of the agreement in an amount determined by the sole discretion of the Company’s
Board of Directors. For the year ended December 31, 2010, the amount of $216,000 due under the employment agreement was accrued
but unpaid.
On May 10, 2011, the Company
and Mr. Hauser executed an amendment, effective as of March 26, 2011, to the employment agreement dated December 10, 2008, by and
between Mr. Hauser and the Company (the “Employment Agreement”). The amendment memorialized the agreement of Mr. Hauser
to reduce the base salary payable to him pursuant to the Employment Agreement to $100,000 for the year ending December 31, 2010,
and to $125,000 commencing January 1, 2011. The Company recorded a cancellation of payroll expense due to Mr. Hauser during the
first quarter of 2011 through additional paid in capital in the amount of $116,000. The amendment further provides for a performance
bonus which may be awarded to Mr. Hauser, at the discretion of the Board, at such time as the Company becomes cash flow positive
(defined as a quarterly net income in excess of $75,000) and has a positive Quick Ratio (Cash less current liabilities in excess
of $100,000). The performance bonus was payable in either cash or through the issuance of shares of the Company’s common
stock at the discretion of the Board. Mr. Hauser resigned in January 2014.
Risk Management
The Company does not believe
risks arising from its compensation policies and practices for its employees are reasonably likely to have a material adverse effect
on the Company.
LONG TERM INCENTIVES
STOCK OPTIONS AND RESTRICTED STOCK.
Executive officers, together with our other employees, are eligible to receive grants of awards under our 2006 Stock Option Plan.
These awards may be in the form of stock options and/or restricted stock grants. The number of shares underlying options or shares,
together with all other terms of the options and shares, are established by the Board of Directors.
STOCK INCENTIVE PLANS
2006 Incentive Stock Plan
The 2006 Incentive Stock Plan has initially
reserved 2,000 shares of common Stock for issuance. Under the 2006 Incentive Stock Plan, options may be granted which are intended
to qualify as Incentive Stock Options ("ISOs") under Section 422 of the Internal Revenue Code of 1986 (the "Code")
or which are not (“Non-ISOs”) intended to qualify as Incentive Stock Options thereunder. In addition, direct grants
of stock or restricted stock may be awarded.
Purpose. The primary purpose
of the 2006 Incentive Stock Plan is to attract and retain the best available personnel in order to promote the success of our business
and to facilitate the ownership of our stock by employees and others who provide services to us.
Administration. The 2006 Incentive
Stock Plan is administered by our Board of Directors, as the Board of Directors may be composed from time to time. Notwithstanding
the foregoing, the Board of Directors may at any time, or from time to time, appoint a committee of at least two members of the
Board of Directors, and delegate to the committee the authority of the Board of Directors to administer the 2006 Incentive Stock
Plan. Upon such appointment and delegation, the committee shall have all the powers, privileges and duties of the Board of Directors,
and shall be substituted for the Board of Directors, in the administration of the 2006 Incentive Stock Plan, subject to certain
limitations.
Eligibility. Under the 2006 Stock
Incentive Plan, options may be granted to key employees, officers, directors or consultants of the Company.
Terms of Options. The term of
each option granted under the 2006 Incentive Stock Plan shall be contained in a stock option agreement between the optionee and
the Company and such terms shall be determined by the Board of Directors consistent with the provisions of the 2006 Incentive Stock
Plan, including the following:
(a) Purchase Price.
The purchase price of the common stock subject to each incentive stock option shall not be less than the fair market value (as
set forth in the 2006 Incentive Stock Plan), or in the case of the grant of an incentive stock option to a principal stockholder,
not less than 110% of fair market value of such common stock at the time such option is granted. The purchase price of the common
stock subject to each non-incentive stock option shall be determined at the time such option is granted, but in no case less than
85% of the fair market value of such common stock at the time such option is granted;
(b) Vesting. The
dates on which each option (or portion thereof) shall be exercisable and the conditions precedent to such exercise, if any, shall
be fixed by the Board of Directors, in its discretion, at the time such option is granted. All options or grants which include
a vesting schedule will vest in their entirety upon a change of control transaction as described in the 2006 Incentive Stock Plan;
(c) Expiration.
The expiration of each option shall be fixed by the Board of Directors, in its discretion, at the time such option is granted;
however, unless otherwise determined by the Board of Directors at the time such option is granted, an option shall be exercisable
for ten years after the date on which it was granted, or five years for grants to certain executive officers. Each option shall
be subject to earlier termination or repurchase as expressly provided in the 2006 Incentive Stock Plan or as determined by the
Board of Directors, in its discretion, at the time such option is granted;
(d) Transferability.
No option shall be transferable, except by will or the laws of descent and distribution, and any option may be exercised during
the lifetime of the optionee only by such optionee. No option granted under the 2006 Incentive Stock Plan shall be subject to execution,
attachment or other process;
(e) Option Adjustments.
The aggregate number and class of shares as to which options may be granted under the 2006 Incentive Stock Plan, the number and
class shares covered by each outstanding option and the exercise price per share thereof (but not the total price), and all such
options, shall each be proportionately adjusted for any increase decrease in the number of issued common stock resulting from split-up
spin-off or consolidation of shares or any like Capital adjustment or the payment of any stock dividend; and
(f) Termination, Modification
And Amendment. The 2006 Incentive Stock Plan (but not options previously granted under the plan) shall terminate ten years
from the date of its adoption by the Board of Directors, and no option or shares shall be granted after termination of the 2006
Incentive Stock Plan. Subject to certain restrictions, the 2006 Incentive Stock Plan may at any time be terminated and from time
to time be modified or amended by the affirmative vote of the holders of a majority of the outstanding shares of the capital stock
of the Company present, or represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of the
State of Nevada.
2008 Amended and Restated Incentive Stock
Plan
The 2008 Plan, as amended, reserved 150,000
shares of common Stock for issuance. Under the 2008 Plan, options may be granted which are intended to qualify as Incentive Stock
Options (“ISOs”) under Section 422 of the Internal Revenue Code of 1986 (the "Code") or which are not (“Non-ISOs”)
intended to qualify as Incentive Stock Options thereunder. In addition, direct grants of stock or restricted stock may be awarded.
Purpose. The primary purpose
of the 2008 Plan is to attract and retain the best available personnel in order to promote the success of our business and to facilitate
the ownership of our stock by employees and others who provide services to us.
Administration. The 2008 Plan
is administered by our Board of Directors, as the Board of Directors may be composed from time to time. Notwithstanding the foregoing,
the Board of Directors may at any time, or from time to time, appoint a committee of at least two members of the Board of Directors,
and delegate to the committee the authority of the Board of Directors to administer the 2008 Plan. Upon such appointment and delegation,
the committee shall have all the powers, privileges and duties of the Board of Directors, and shall be substituted for the Board
of Directors, in the administration of the 2008 Plan, subject to certain limitations.
Eligibility. Under
the 2008 Plan, options may be granted to key employees, officers, directors or consultants of the Company.
Terms of Options. The term of
each option granted under the 2008 Plan shall be contained in a stock option agreement between the optionee and the Company and
such terms shall be determined by the Board of Directors consistent with the provisions of the 2008 Stock Plan, including the following:
(a) Purchase Price.
The purchase price of the common stock subject to each incentive stock option shall not be less than the fair market value (as
set forth in the 2008 Plan), or in the case of the grant of an incentive stock option to a principal stockholder, not less than
110% of fair market value of such common stock at the time such option is granted. The purchase price of the common stock subject
to each non-incentive stock option shall be determined at the time such option is granted, but in no case less than 85% of the
fair market value of such common stock at the time such option is granted;
(b) Vesting. The
dates on which each option (or portion thereof) shall be exercisable and the conditions precedent to such exercise, if any, shall
be fixed by the Board of Directors, in its discretion, at the time such option is granted. All options or grants which include
a vesting schedule will vest in their entirety upon a change of control transaction as described in the 2008 Plan;
(c) Expiration.
The expiration of each option shall be fixed by the Board of Directors, in its discretion, at the time such option is granted;
however, unless otherwise determined by the Board of Directors at the time such option is granted, an option shall be exercisable
for ten years after the date on which it was granted, or five years for grants to certain executive officers. Each option shall
be subject to earlier termination or repurchase as expressly provided in the 2008 Plan or as determined by the Board of Directors,
in its discretion, at the time such option is granted;
(d) Transferability.
No option shall be transferable, except by will or the laws of descent and distribution, and any option may be exercised during
the lifetime of the optionee only by such optionee. No option granted under the 2008 Plan shall be subject to execution, attachment
or other process;
(e) Option Adjustments.
The aggregate number and class of shares as to which options may be granted under the 2008 Plan, the number and class shares covered
by each outstanding option and the exercise price per share thereof (but not the total price), and all such options, shall each
be proportionately adjusted for any increase decrease in the number of issued common stock resulting from split-up spin-off or
consolidation of shares or any like Capital adjustment or the payment of any stock dividend; and
(f) Termination, Modification
and Amendment. The 2008 Plan (but not options previously granted under the plan) shall terminate ten years from the date of
its adoption by the Board of Directors, and no option or shares shall be granted after termination of the 2006 Incentive Stock
Plan. Subject to certain restrictions, the 2008 Plan may at any time be terminated and from time to time be modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares of the capital stock of the Company present, or
represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of the State of Nevada.
2010 Incentive Stock Plan
The 2010 Plan has initially reserved 66,000
shares of common Stock for issuance. Under the 2010 Plan, options may be granted which are intended to qualify as Incentive Stock
Options (“ISOs”) under Section 422 of the Internal Revenue Code of 1986 (the “Code”) or which are not (“Non-ISOs”)
intended to qualify as Incentive Stock Options thereunder. In addition, direct grants of stock or restricted stock may be awarded.
Purpose. The primary purpose
of the 2010 Plan is to attract and retain the best available personnel in order to promote the success of our business and to facilitate
the ownership of our stock by employees and others who provide services to us.
Administration. The 2010 Plan
is administered by our Board of Directors, as the Board of Directors may be composed from time to time. Notwithstanding the foregoing,
the Board of Directors may at any time, or from time to time, appoint a committee of at least two members of the Board of Directors,
and delegate to the committee the authority of the Board of Directors to administer the 2010 Plan. Upon such appointment and delegation,
the committee shall have all the powers, privileges and duties of the Board of Directors, and shall be substituted for the Board
of Directors, in the administration of the 2010 Plan, subject to certain limitations.
Eligibility. Under the 2010 Plan,
options may be granted to key employees, officers, directors or consultants of the Company.
Terms of Options. The term of each option granted
under the 2010 Plan shall be contained in a stock option agreement between the optionee and the Company and such terms shall be
determined by the Board of Directors consistent with the provisions of the 2008 Stock Plan, including the following:
(a) Purchase Price.
The purchase price of the common stock subject to each incentive stock option shall not be less than the fair market value (as
set forth in the 2010 Plan), or in the case of the grant of an incentive stock option to a principal stockholder, not less than
110% of fair market value of such common stock at the time such option is granted. The purchase price of the common stock subject
to each non-incentive stock option shall be determined at the time such option is granted, but in no case less than 85% of the
fair market value of such common stock at the time such option is granted;
(b) Vesting. The
dates on which each option (or portion thereof) shall be exercisable and the conditions precedent to such exercise, if any, shall
be fixed by the Board of Directors, in its discretion, at the time such option is granted. All options or grants which include
a vesting schedule will vest in their entirety upon a change of control transaction as described in the 2010 Plan;
(c) Expiration.
The expiration of each option shall be fixed by the Board of Directors, in its discretion, at the time such option is granted;
however, unless otherwise determined by the Board of Directors at the time such option is granted, an option shall be exercisable
for ten years after the date on which it was granted, or five years for grants to certain executive officers. Each option shall
be subject to earlier termination or repurchase as expressly provided in the 2010 Plan or as determined by the Board of Directors,
in its discretion, at the time such option is granted;
(d) Transferability.
No option shall be transferable, except by will or the laws of descent and distribution, and any option may be exercised during
the lifetime of the optionee only by such optionee. No option granted under the 2010 Plan shall be subject to execution, attachment
or other process;
(e) Option Adjustments.
The aggregate number and class of shares as to which options may be granted under the 2010 Plan, the number and class shares covered
by each outstanding option and the exercise price per share thereof (but not the total price), and all such options, shall each
be proportionately adjusted for any increase decrease in the number of issued common stock resulting from split-up spin-off or
consolidation of shares or any like Capital adjustment or the payment of any stock dividend; and
(f) Termination, Modification
and Amendment. The 2010 Plan (but not options previously granted under the plan) shall terminate ten years from the date of
its adoption by the Board of Directors, and no option or shares shall be granted after termination of the 2006 Incentive Stock
Plan. Subject to certain restrictions, the 2010 Plan may at any time be terminated and from time to time be modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares of the capital stock of the Company present, or
represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of the State of Nevada
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.
The following table sets
forth certain information relating to the ownership of common stock by (i) each person known by us be the beneficial owner of more
than five percent of the outstanding shares of our common stock, (ii) each of our directors, (iii) each of our named executive
officers, and (iv) all of our executive officers and directors as a group. Unless otherwise indicated, the information relates
to these persons, beneficial ownership as of March 31, 2015. Except as may be indicated in the footnotes to the table
and subject to applicable community property laws, each person has the sole voting and investment power with respect to the shares
owned.
Name of Beneficial Owner |
|
Common Stock
Beneficially Owned(1) |
|
|
Percentage of Common Stock (1) |
|
|
|
|
|
|
|
|
Lyle Hauser(2) |
|
|
157,816,020 |
|
|
|
30.2 |
% |
Frank Jakovac |
|
|
- |
|
|
|
|
- |
Michael S. Delin |
|
|
- |
|
|
|
- |
|
Niquana Noel |
|
|
|
- |
|
|
|
- |
All officers and directors as a group (3 persons) |
|
|
0 |
|
|
|
0 |
% |
(1) Applicable percentage ownership is based
on 522,953,672 shares of common stock outstanding as of March 31, 2015, together with securities exercisable or convertible into
shares of common stock within 60 days of March 31, 2015 for each stockholder. Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.
Shares of common stock that are currently exercisable or exercisable within 60 days of March 31, 2015 are deemed to be beneficially
owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not
treated as outstanding for the purpose of computing the percentage ownership of any other person.
(2) Lyle Hauser owns 157,797,355 shares in
his individual capacity and 18,665 shares through Vantage Holding Ltd. Lyle Hauser is the owner of The Vantage Group Ltd. and
Vantage Holding Ltd.
Item 13. Certain Relationships and Related Transactions, and
Director Independence.
Certain Relationships and Related Transactions
In the first quarter of 2015, we issued 18,018,018
shares of common stock to Lyle Hauser in exchange for $40,000 of debt owed by the Company to Mr. Hauser. Mr. Hauser is the Company’s
largest stockholder.
Director Independence
None of our directors is independent as term
is defined under the Nasdaq Marketplace Rules.
Item 14. Principal Accounting Fees and Services.
The following table shows the fees
that were billed by L.L Bradford & Company, LLC (“L.L Bradford”) and RBSM LLP (“RBSM”) for professional
services rendered in 2014 and 2013. RBSM were engaged as our independent registered public accounting firm on February 23,
2015.
| |
2014 | | |
2013 | |
Audit Fees | |
$ | 36,000 | | |
$ | 39,000 | |
Audit Related Fees | |
| - | | |
| - | |
Tax Fees | |
| - | | |
| - | |
All Other Fees | |
| - | | |
| - | |
Total Fees | |
$ | 36,000 | | |
$ | 39,000 | |
Audit fees. Audit
fees represent fees for professional services performed by L.L. Bradford and RBSM for the audit of our annual financial statements
and the review of our quarterly financial statements, as well as services that are normally provided in connection with statutory
and regulatory filings or engagements.
Audit-related fees. Audit-related
fees represent fees for assurance and related services performed by L.L. Bradford and RBSM that are reasonably related to the performance
of the audit or review of our financial statements.
Tax Fees. L.L.
Bradford and RBSM did not perform any tax compliance services for us during the years ended December 31, 2014 or 2013.
All other fees. L.L.
Bradford and RBSM did not receive any other fees from us for the years ended December 31, 2014 or 2013.
Item 15. Exhibits.
2.1 |
Agreement and Plan of Merger made as of November 1, 2005 among Bio-Solutions International, Inc., OmniMed Acquisition Corp., OmniMed International, Inc., and the shareholders of OmniMed International, Inc. (as incorporated by reference to the Company's Current Report on Form 8-K filed on November 3, 2005). |
|
|
3.1 |
Articles of Incorporation (as incorporated by reference to the Company's Annual Report on Form 10-KSB filed on April 17, 2006). |
|
|
3.2 |
Bylaws of the Issuer (as incorporated by reference to the Company's Annual Report on Form 10-KSB filed on April 17, 2006). |
|
|
3.3 |
Certificate of Amendment to Articles of Incorporation filed on August 31, 2004 (as incorporated by reference to the Company's Annual Report on Form 10-KSB filed on April 17, 2006). |
|
|
3.4 |
Articles of Merger changing the Registrant's name to OmniMed International, Inc. (as incorporated by reference to the Company's Current Report on Form 8-K filed on November 22, 2005). |
|
|
3.5 |
Articles of Merger changing the Registrant's name to MedeFile International, Inc. (as incorporated by reference to the Company's Current Report on Form 8-K filed on January 18, 2006). |
|
|
3.6 |
Certificate of Designation of Series A Preferred (as incorporated by reference to the Company's Current Report on Form 8-K filed on January 16, 2009). |
|
|
3.7 |
Certificate of Amendment to Articles of Incorporation, filed January 21, 2009 (incorporation be referenced to the Company’s Form 8-K filed on January 23, 2009) |
|
|
3.8 |
Certificate of Amendment to Articles of Incorporation filed April 13, 2010 (incorporated by reference to10-K/A filed July 15, 2011) |
|
|
3.9 |
Certificate of Amendment to Articles of Incorporation filed July 20, 2010 (incorporated by reference to10-K/A filed July 15, 2011) |
3.10 |
Certificate of Designation of Series B Convertible Preferred Stock filed April 10, 2012 (incorporated by reference to10-K/A filed April 16, 2012) |
|
|
3.11 |
Certificate of Amendment to Articles of Incorporation filed October 2, 2012 (incorporated by reference to8-K filed October 9, 2012) |
3.12 |
Certificate of Amendment to Articles of Incorporation filed December 19, 2015 (incorporated by reference to 8-K filed December 26, 2013) |
3.12 |
Certificate of Amendment to Articles of Incorporation filed February 13, 2013 (incorporated by reference
to 8-K filed February 17, 2015) |
10.1 |
2006 Stock Incentive Plan (as incorporated by reference to the Company's Annual Report on Form 10-KSB filed on April 17, 2006). |
|
|
10.2 |
Form of Securities Purchase Agreement (incorporated by reference to 8-K filed July 20, 2011) |
|
|
10.3 |
Form of Warrant (incorporated by reference to 8-K filed July 20, 2011) |
|
|
10.4 |
Lock-Up Agreement between the Company Kevin Hauser (incorporated by reference to 8-K filed July 20, 2011) |
|
|
10.5 |
Lock-Up Agreement between the Company and Lyle Hauser (incorporated by reference to 8-K filed July 20, 2011) |
|
|
10.6 |
Form of Securities Purchase Agreement (incorporated by reference to 8-K filed April 16, 2012) |
|
|
10.7 |
Form of Stock Purchase Warrant (incorporated by reference to 8-K filed April 16, 2012) |
|
|
10.8 |
Form of Securities Purchase Agreement (incorporated by reference to 8-K filed April 27, 2012) |
|
|
10.9 |
Form of Securities Purchase Agreement (incorporated by reference to 8-K filed August 24, 2012) |
|
|
10.10 |
Form of Securities Purchase Agreement (incorporated by reference to 8-K filed February 6, 2013) |
|
|
10.11 |
Securities Purchase Agreement, dated April 14, 2013 (incorporated by reference to 8-K filed on April 18, 2013) |
|
|
10.12 |
Stock Purchase Warrant, dated April 14,
2013 (incorporated by reference to 8-K filed on April 18, 2013) |
|
|
10.13 |
Securities Purchase Agreement, dated December 23, 2013 (incorporated by reference to 8-K filed December 26, 2013) |
|
|
10.14 |
Note, dated December 26, 2013 (incorporated by reference to 8-K filed on December 26, 2013) |
|
|
10.15 |
Amendment No. 1 to Lock-Up Agreement, dated
December 23, 2013 (incorporated by reference to 8-K filed on December 26, 2013)
|
|
|
10.16 |
Securities Purchase Agreement, dated July 1, 2014 (incorporated by reference to 8-K filed July 17, 2014) |
|
|
10.17 |
Form of Securities Purchase Agreement (incorporated by reference to 8-K filed March 19,
2015) |
|
|
16.1 |
Letter from L.L Bradford & Company, LLC (incorporated by reference to 8-K filed March 2,
2015) |
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
32.1 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
EX-101.INS |
XBRL INSTANCE DOCUMENT |
|
|
EX-101.SCH |
XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT |
|
|
EX-101.CAL |
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE |
|
|
EX-101.DEF |
XBRL TAXONOMY EXTENSION DEFINITION LINKBASE |
|
|
EX-101.LAB |
XBRL TAXONOMY EXTENSION LABELS LINKBASE |
|
|
EX-101.PRE |
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE |
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) 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: April 2, 2015 |
By: |
/s/ Niquana Noel |
|
|
|
Niquana Noel |
|
|
|
President and Chief Executive Officer (principal executive, financial and accounting officer) |
|
|
|
|
|
Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
SIGNATURE |
|
TITLE |
|
DATE |
|
|
|
|
|
/s/ Niquana Noel |
|
President, Chief Executive Officer and Director |
|
April 2, 2015 |
Niquana Noel |
|
(Principal Executive, Financial and
Accounting Officer) |
|
|
|
|
|
|
|
/s/ Michael S. Delin |
|
Director |
|
April 2, 2015 |
Michael S. Delin |
|
|
|
|
|
|
Director |
|
April 2, 2015 |
Frank Jakovac |
|
|
|
|
25
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Niquana Noel, certify that:
1. I have reviewed this
report on Form 10-K 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 financial 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. |
|
|
|
|
Dated: April 2, 2015 |
By: |
/s/ Niquana Noel |
|
|
|
Niquana Noel |
|
|
|
Chief Executive Officer (principal executive and financial officer) |
|
|
|
|
|
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 Annual Report of MedeFile
International, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2014 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: April 2, 2015 |
By: |
/s/ Niquana Noel |
|
|
|
Niquana Noel |
|
|
|
Chief Executive Officer (principal executive and financial officer) |
|
|
|
|
|