10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Amendment No. 1)

(Mark One)

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

For the quarterly period ended March 31, 2015

OR

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

For the transition period from ____________ to __________

Commission File Number 033-25126-D

MedeFile International, Inc.

(Exact name of registrant as specified in its charter)

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

301 Yamato Rd, Suite 1200

Boca Raton, FL  33431

(Address of principal executive offices) (Zip Code)

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

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

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

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

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

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

Number of shares outstanding of registrant’s common stock, par value $0.0001: 572,953,672 as of May 18, 2015.

Explanatory Note

This Amendment No. 1 to Form 10-Q for the period ended March 31, 2015, amends our Quarterly Report on Form 10-Q for the period ended March 31, 2015, which was originally filed with the Securities and Exchange Commission on May 19, 2015 (the “Original 10-Q”) This amendment is being filed solely to restate the financial statements as of and for the quarter ended March 31, 2015 for a failure to properly account for the derivative liability on a convertible note. Except with respect to the financial statements, and corresponding changes to Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Original 10-Q has not been amended, updated or otherwise modified.

Table of Contents

	Page
PART I
FINANCIAL INFORMATION	4
ITEM 1. Financial Statements	4
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	24
ITEM 4. Controls and Procedures	24
PART II
OTHER INFORMATION	24
ITEM 1. Legal Proceedings	24
ITEM 1A. Risk Factors	24
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	25
ITEM 3. Defaults Upon Senior Securities	25
ITEM 4. Mine Safety Disclosures	25
ITEM 5. Other Information	25
ITEM 6. Exhibits	25
Signatures	26

3

Item 1. Financial Statements.

Medefile International, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

	March 31,			December 31,
	2015			2014
	(Restated)
Assets
Current assets
Cash	$	512,714		$	36,170
Accounts receivable		4,938			5,425
Inventory		23,096			23,412
Merchant services reserve		2,939			2,939
Prepaid expense		-			5,709
Total current assets		543,687			73,655
Website development, net of accumulated amortization		243,643			265,792
Furniture and equipment, net of accumulated depreciation		-			-
Total assets	$	787,330		$	339,447
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued liabilities	$	49,886		$	47,697
Convertible debenture		84,586			122,538
Deferred revenues		1,018			684
Derivative liability - convertible note		33,243
Derivative liability - warrants		-			51
Total Current Liabilities		168,733			170,970
Stockholders' Equity
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding		-			-
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 and 225,836,554 shares issued and outstanding on March 31, 2015 and December 31, 2014, respectively		52,295			22,583
Additional paid in capital		28,060,805			27,430,517
Common stock to be issued		69,920			69,920
Accumulated deficit		(27,564,423	)		(27,354,543	)
Total stockholders' equity		618,597			168,477
Total liability and stockholders' equity	$	787,330		$	339,447

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

4

Medefile International, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

	For the			For the
	three months			three months
	ended			ended
	March 31,			March 31,
	2015			2014
	(Restated)
Revenue		13,100			15,926
Cost of goods sold		316			279
Gross profit		12,784			15,647
Operating expenses
Selling, general and administrative expenses		165,275			173,607
Depreciation and amortization expenses		22,149			106
Total operating expenses		187,424			173,713
Loss from operations		(174,640	)		(158,066	)
Other income (expenses)
Interest expense - convertible note		(2,048	)		(2,737	)
Interest expense - discount on convertible note		-			(27,124	)
Change in derivative liability - convertible note		(33,243	)		-
Change of derivative liabilities - warrants		51			948,857
Total other income (expense)		(35,240	)		918,996
Gain (loss) before income tax		(209,880	)		760,930
Provision for income tax
Net income (loss)	$	(209,880	)	$	760,930
Net loss per share: basic	$	(0.00	)	$	0.02
Net loss per share: diluted	$	(0.00	)	$	(0.00	)
Weighted average share outstanding basic		265,897,289			40,706,899
Weighted average share outstanding diluted		266,954,614			40,777,993

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

5

Medefile International, Inc.

Consolidated Statement of Stockholders' Equity

	Preferred				Common Stock							Common
	Shares		Par		Shares		Par					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
Convertible 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
Sale of common stock						279,099,100		27,910		592,090								620,000
Stock issued for debt conversion						18,018,018		1,802		38,198								40,000
Net income															(209,880	)		(209,880	)
Balance March 31, 2015 (restated)		-	$	-		522,953,672	$	52,295	$	28,060,805		$	69,920	$	(27,564,423	)	$	618,597

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

6

Medefile International, Inc.

Condensed Consolidated Statements of Cash Flows

	For the			For the
	three months			three months
	ended			ended
	March 31,			March 31,
	2015			2014
	(Restated)
Cash flows from operating activities
Net income	$	(209,880	)	$	760,930
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			106
Amortization		22,149			-
Interest expense - discount on convertible debenture		-			27,124
Change in derivative - convertible note		33,243			-
(Gain) loss in fair value of derivative liabilities – warrants		(51	)		(948,857	)
Changes in operating assets and liabilities
Accounts receivable		487			(2,089	)
Inventory		316			279
Prepaid insurance		5,709			1,057
Accounts payable and accrued liabilities		2,189			(9,656	)
Accrued Interest - convertible debenture		2,048			2,737
Deferred revenue		334			(772	)
Net Cash used in operating activities		(143,456	)		(169,141	)
Cash flows from investing activities
Net cash used in investing activities		-			-
Cash flow from financing activities
Proceeds from common stock subscriptions		620,000			-
Net cash provided by financing activities		620,000			-
Net increase (decrease) in cash and cash equivalents		476,544			(169,141	)
Cash and cash equivalents at beginning of period		36,170			266,843
Cash and cash equivalents at end of period	$	512,714		$	97,702
Supplemental disclosure of cash flow information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
Stock issued for conversion of debt	$	40,000		$	-

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

7

Medefile International, Inc.

Notes to Unaudited Consolidated Financial Statements

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of MedeFile International Inc., a Nevada corporation (the "Company"), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company's Form 10-K for the fiscal year ended December 31, 2014. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of March 31, 2015, and the results of operations and cash flows for the three months ended March 31, 2015 and 2014. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Restatement

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. 

The company assessed the fair value of the conversion option using the Black Scholes pricing model and recorded a derivative liability for the value.  The adjustment for this valuation to Derivative Liability is $33,243.  An adjustment to change in fair value of derivative liability is a loss of $33,243 for the quarter ended March 31, 2015.  

During the first quarter 2015, the company recognized a change in derivative for the convertible debenture in amount of $33,243, the resulting derivative liability balance at March 31, 2015 is $33,243.

The following table provides additional details regarding the changes to the balance sheet, statement of operations and statement of cash flows as of and for the three months ended March 31, 2015.

	Original						Restated
	March 31,			Restatement			March 31,
	2015			Adjustments			2015
Cash	$	512,714			-		$	512,714
Accounts receivable		4,938			-			4,938
Inventory		23,096			-			23,096
Merchant services reserve		2,939			-			2,939
Prepaid expense		-			-			-
		543,687						543,687
Website development, net of accumulated amortization		243,643			-			243,643
Furniture and equipment, net of accumulated depreciation		-			-			-
Total assets	$	787,330					$	787,330
Current Liabilities
Accounts payable and accrued liabilities	$	49,886			-		$	49,886
Convertible debenture		84,586			-			84,586
Deferred revenues		1,018			-			1,018
Derivative liability - convertible note		-			33,243			33,243
Derivative liability - warrants		-			-			-
Total Current Liabilities		135,490						168,733
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding		-			-			-
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 shares issued and outstanding		52,295			-			52,295
Additional paid in capital		28,060,805			-			28,060,805
Common stock to be issued		69,920			-			69,920
Accumulated deficit		(27,531,180	)		(33,243	)		(27,564,423	)
Total stockholders' equity		651,840						618,597
Total liability and stockholders' equity	$	787,330					$	787,330

8

	For the					For the
	three months					three months
	ended					ended
	March 31,					March 31,
	2015					2015
Revenue		13,100		-			13,100
Cost of goods sold		316		-			316
Gross profit		12,784					12,784
Operating expenses
Selling, general and administrative expenses		165,275		-			165,275
Depreciation and amortization expenses		22,149		-			22,149
Total operating expenses		187,424					187,424
Loss from operations		(174,640	)				(174,640	)
Other income (expenses)
Interest expense - convertible note		(2,048	)	-			(2,048	)
Change in derivative liability - convertible note		-		(33,243	)		(33,243	)
Change of derivative liabilities – warrants		51		-			51
Total other income (expense)		(1,997	)				(35,240	)
Gain (loss) before income tax		(176,637	)				(209,880	)
Provision for income tax
Net income (loss)	$	(176,637	)			$	(209,880	)
Net loss per share: basic	$	(0.00	)			$	(0.01	)
Net loss per share: diluted	$	(0.00	)
Weighted average share outstanding basic		265,897,289					40,706,899
Weighted average share outstanding diluted		266,954,614

9

	For the					For the
	three months					three months
	ended					ended
	March 31,					March 31,
	2015					2015
Cash flows from operating activities
Net income	$	(176,637	)	(33,243	)	$	(209,880	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-		-			-
Amortization		22,149		-			22,149
Interest expense - discount on convertible debenture		-		-			-
Change in derivative - convertible note		-		33,243			33,243
(Gain)loss  in fair value of derivative liabilities – warrants		(51	)	-			(51	)
Changes in operating assets and liabilities							-
Accounts receivable		487		-			487
Inventory		316		-			316
Prepaid insurance		5,709		-			5,709
Accounts payable and accrued liabilities		2,189		-			2,189
Accrued Interest - convertible debenture		2,048		-			2,048
Deferred revenue		334		-			334
Net Cash used in operating activities		(143,456	)				(143,456	)
Cash flows from investing activities
Net cash used in investing activities		-					-
Cash flow from financing activities
Proceeds from common stock subscriptions		620,000		-			620,000
Net cash provided by financing activities		620,000					620,000
Net increase (decrease) in cash and cash equivalents		476,544					476,544
Cash and cash equivalents at beginning of period		36,170					36,170
Cash and cash equivalents at end of period	$	512,714				$	512,714
Supplemental disclosure of cash flow information
Cash paid for interest	$	-				$	-
Cash paid for income taxes	$	-				$	-
Stock issued for conversion of debt	$	40,000				$	40,000

10

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 MedeFileiPHR solution has been designed to gather all of its members’ actual medical records on behalf of each member, and create a single, comprehensive Electronic Health Record (EHR). The member can access his/her records 24-hours a day, seven days a week – or authorize a third party user – on any web-enabled device (PC, cell phone, PDA, e-reader, et al), as well as the portable MedeFile flash drive/keychain or branded UBS-bracelet.

By subscribing to the MedeFile system, members 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, which also have 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; 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 $174,640 and a net loss of $209,880 for the three months ended March 31, 2015. During the comparable three month period of 2014, the Company had an operating loss of $158,066 and net income (as a result of the change in the valuation of the Company’s warrant derivative) of $760,930. The Company had an accumulated deficit of $27,564,423 as of March 31, 2015.  The Company has working capital of $374,954 as of March 31, 2015.

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 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.

11

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

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

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.

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.

12

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 March 31, 2015 and December 31, 2014, deferred revenue totaled $1,018 and $684, respectively.

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company’s financial statements.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company beginning November 1, 2017 and, at that time the Company may adopt the new standard under the full retrospective approach or the modified retrospective approach. Early adoption is not permitted. The Company is currently evaluating the method and impact the adoption of ASU 2014-09 will have on the Company’s condensed consolidated financial statements and disclosures.

In January 2014, the FASB issued ASU 2014-04, an update to ASC 310, "Receivables." The ASU clarifies that an in substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The amendments may be adopted using either a modified retrospective transition method or a prospective transition method. Early adoption of the guidance is permitted. The impact of this guidance is currently being evaluated by the Company, but is not expected to have a significant impact on the Company's financial position, results of operations or disclosures.

13

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	$	-	$	-	$	243,643	$	243,643
Total	$	-	$	-	$	243,643	$	243,643
Liabilities
Derivative Liability – Convertible Note	$				$	$33,243	$	33,243
Deferred Revenues		1,018		-		-		1,018
Total	$	1,018	$	-	$	33,243	$	34,261

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 down in the amount of $30,000. There was no write down of inventory in the three months ended March 31, 2015.

Net Loss per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method.  

14

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. Accounts receivables as of March 31, 2015 totaled $4,938 and $5,425 as of December 31, 2014.

3. WEBSITE DEVELOPMENT

Website development consists of the following:

	March 31, 2015			December 31, 2014
Website development	$	328,737		$	324,285
Additional development		-			4,453
Accumulated amortization		(85,094	)		(62,946	)
Net website development	$	243,643		$	265,792

The Company completed the redesign in January 2015. The redesign is being amortized over a three year period. Amortization expense for the three month period ending March 31, 2015 was $22,149 compared to $0 for the three month period ended March 31, 2014, respectively.

4. FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

	March 31, 2014			December 31, 2014
Computers and equipment	$	169,286		$	169,286
Furniture and fixtures		38,618			38,618
Subtotal		207,904			207,904
Less: accumulated depreciation		(207,904	)		(207,904	)
Net furniture and equipment	$	-		$	-

Depreciation is calculated by using the straight-line method over the estimated useful life. Furniture and equipment was fully depreciated as of March 31, 2015. Depreciation expense for the three months ended March 31, 2015 and 2014 totaled $0 and $106, respectively.

15

5. CONVERTIBLE DEBENTURE – 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 are convertible into common stock at a conversion price of the lower of $0.10 (subject to adjustments for the events of stock splits, stock dividends and similar transactions) or 80% of the previous day’s market price of common stock.

	March 31, 2015			December 31, 2014
Convertible debenture – related party	$	122,538		$	122,538
Accumulated Interest		2,048
Payment		(40,000	)		-
Convertible debenture	$	84,586		$	122,538

6. WARRANT LIABILITY

In connection with certain securities purchase agreements entered into during the third quarter of 2011 and the second quarter of 2012 , the Company granted warrants with ratchet provisions. The warrants 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 following the issuance date, 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 (see below for variables used in assessing the fair value). 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 March 31, 2015, 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			March 31, 2015			December 31, 2014
Risk-free interest rate at grant date		1.21	%		1.13	%		1.27	%
Expected stock price volatility		194.9	%		92.2	%		189.65	%
Expected dividend payout		-			-			-
Expected option in life-years		4			.27			1.5

16

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 then-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			March 31, 2015
Risk-free interest rate at grant date		0.47	%		1.13	%
Expected stock price volatility		137.8	%		92.2	%
Expected dividend payout		-			-
Expected option in life-years		3.75			1.03.

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			March 31, 2015
Risk-free interest rate at grant date		0.47	%		1.13	%
Expected stock price volatility		137.8	%		92.2	%
Expected dividend payout		-			-
Expected option in life-years		3.75			1.05

Transactions involving warrants with ratchet provisions are as follows:

	Number of Warrants		Weighted- Average Price Per Share
Outstanding at December 31, 2013		3,008,511	$	0.50
Granted
Exercised
Canceled or expired
Additional due to ratchet trigger
Outstanding at December 31, 2014		3,008,511		0.50
Granted
Exercised
Canceled or expired
Addition due to ratchet trigger
Outstanding at March 31, 2015		3,008,511	$	0.50

As of March 31, 2015 and December 31, 2014, the warrant liability consisted of the following:

	March 31, 2015			December 31, 2014
Warrant liability (beginning balance)	$	51		$	5,618,819
Additional liability due to new grants
Loss(gain) on changes in fair market value of warrant liability		(51	)		(5,618,786	)
Net warrant liability	$	-		$	51

Change in fair market value of warrant liability resulted in a gain of $51 and a loss of $948,857 for the three months ended March 31 2015 and 2014, respectively.

7. DERIVATIVE LIABILITY

The following Secured Convertible Debentures entered into in November and December 2013 contain ratchet provisions regarding the conversion of debt into shares of common stock.

The Company entered into 10% Secured Convertible Notes in November 2013 and December 2013, both for a term of 12 months. The debentures are in the amount of $50,000 and $60,000 respectively. The conversion price of the note is based on 80% of the previous day’s market price.

17

T he Company assesses the fair value of the conversion option using the Black Scholes pricing model and records a derivative expense and a corresponding derivative liability for the value. The Company then assesses the fair value of the derivative liability quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility using daily 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 convertible debenture as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging” (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entity’s own common stock.

	March 31, 2015
Risk-free interest rate at grant date		.26	%
Expected stock price volatility		248	%
Expected dividend payout		–
Expected option in life-years		1.0

As of March 31 2015, derivative liability for this note is $33,243 and the change of derivative liability for the three months ended March 31, 2015 was $33,243.

8. 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. On February 10, 2015 the Company increased its authorized shares of common stock from 500,000,000 to 700,000,000.

18

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 2,000,000 shares of common stock for an aggregate purchase price of $40,000.

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. 

2015

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.

On March 18, 2015 the Company issued 18,018,018 shares of common stock in exchange for $40,000 of debt owed by the Company

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.

19

Stock Options

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.

Other Warrants

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.

Risk-free interest rate at grant date	0.39	%
Expected stock price volatility	172.1	%
Expected dividend payout	--
Expected option in life-years	4

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.

Transactions involving warrants are summarized as follows:

	Number of Warrants		Weighted- Average Price Per Share
Outstanding at December 31, 2013		29,000		30.07
Granted		-		-
Exercised		27,000		25.00
Canceled or expired		-		-
Outstanding at December 31, 2014		2,000	$	50.00
Granted		-		-
Exercised		-		-
Canceled or expired		-		-
Outstanding at March 31, 2015		2,000	$	50.00

Warrants Outstanding
				Weighted
				Average
				Remaining
Exercise		Number		Contractual
Prices		Outstanding		Life (years)
$	25		2,000		.25

9. RELATED PARTY TRANSACTIONS

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 are convertible into common stock at a conversion price of the lower of $0.10 (subject to adjustments for the events of stock splits, stock dividends and similar transactions) or 80% of the previous day’s market price of common stock.

10.   SUBSEQUENT EVENTS

Management has evaluated all events through the date of issuance and there are no reportable subsequent events.

20

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

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

OVERVIEW

Organizational History

On November 1, 2005, Bio-Solutions International, Inc. ("Bio-Solutions") entered into an Agreement and Plan of Merger (the "Agreement") with OmniMed Acquisition Corp., (the "Acquirer), a Nevada corporation and a wholly owned subsidiary of Bio-Solutions, OmniMed International, Inc., a Nevada corporation ("OmniMed"), and the shareholders of OmniMed (the "OmniMed Shareholders"). Pursuant to the Agreement, Bio-Solutions acquired all of the outstanding equity stock of OmniMed from the OmniMed Shareholders. As consideration for the acquisition of OmniMed, Bio-Solutions agreed to issue 1,979 shares of Bio-Solutions' common stock to the OmniMed Shareholders.

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

Overview of Business

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

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

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

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

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

21

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

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

● 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

FOR THE THREE MONTHS ENDED MARCH 31, 2015 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2014

Revenues

Revenues for the three months ended March 31, 2015 totaled $13,100 compared to revenues of $15,926 during the three months ended March 31, 2014.  The decrease in membership revenue is primarily related to amount of members and medical record reimbursement revenue received from members. Medical record reimbursement revenue is a dollar for dollar reimbursement for charges from members’ doctors for sending updated medical records to MedeFile. The off-setting expense is charged to selling general and administrative expense. Revenues received from memberships are recognized through the period of the membership, and, therefore, revenue recognized represents a fraction of the membership in the quarter being reported.   

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended March 31, 2015 totaled $165,275, a decrease of $8,332 or approximately 4.8% compared to selling, general and administrative expenses of $173,607 for the three months ended March 31, 2014. The decrease was due mainly to decreased payroll, legal expense and consulting fees.  

Depreciation Expense

Depreciation expense totaled $0 for the three months ended March 31, 2015, compared to depreciation expense of $106 during the three months ended March 31, 2014. The decrease in depreciation was due to some assets being fully depreciated. All assets are fully depreciated.

Amortization Expense

Amortization expense for the three months ended March 31, 2015 was $22,149, compared to $0 the three months ended March 31, 2014.  Amortization expense is the expensing of the website development.

Interest Expense

Interest expense on convertible debentures for the three months ended March 31, 2015 and 2014, was $2,048 and $2,737 respectively.   The Company entered into two secured convertible debentures during the third quarter of 2013.  The notes have a one year term at a 10% interest rate.

Interest expense on the discount for convertible notes for the three months ended March 31, 2015 and 2014 was $0 and $27,124 respectively.  The conversion feature of the debentures allows the note to be converted at a share price of $0.10.

Change in derivative liability for convertible debenture for the three months ended March 31, 2015 and 2014, was $33,243 and $0 respectively.

Net Income

For the reasons stated above, our operating loss for the three months ended March 31, 2015 was $174,640 compared to an operating loss of $158,066 for the three months ended March 31, 2014. The increase in operating loss of $16,574 is primarily the result of increased amortization expense (partially offset by a decrease in our selling, general and administrative expenses) as detailed above. We had a net loss of $209,880, or $.00 per share, for the three months ended March 31, 2015, a decrease of $970,810 compared to net income of $760,930 (due to a change in the fair value of our derivative liability), or $0.02 per share, for the three months ended March 31, 2014.  

22

FINANCIAL CONDITION

Liquidity and Capital Resources

As of March 31, 2015, we had cash and cash equivalents of $512,714, inventory of $23,096, merchant services reserve of $2,939, and accounts receivable of $4,938.  Net cash used in operating activities for the three months ended March 31, 215 was approximately $143,456. Current liabilities of $168,733 consisted of: $49,886 for accounts payable and accrued liabilities, deferred revenues of $1,018, convertible debenture of $84,586 and derivative liability of $33,243. As of March 31, 2015, we have net working capital of $374,954.

The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. The Company has reported a net loss of $209,880 for the three months ended March 31 2015 and had an accumulated deficit of $27,564,423 as of March 31, 2015. The Company has net working capital of $374,954 as of March 31, 2015.

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 March 31, 2015 or as of the date of this report.

Critical Accounting Policies

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

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 FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company’s financial statements.

23

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company beginning November 1, 2017 and, at that time the Company may adopt the new standard under the full retrospective approach or the modified retrospective approach. Early adoption is not permitted. The Company is currently evaluating the method and impact the adoption of ASU 2014-09 will have on the Company’s condensed consolidated financial statements and disclosures.

In January 2014, the FASB issued ASU 2014-04, an update to ASC 310, "Receivables." The ASU clarifies that an in substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The amendments may be adopted using either a modified retrospective transition method or a prospective transition method. Early adoption of the guidance is permitted. The impact of this guidance is currently being evaluated by the Company, but is not expected to have a significant impact on the Company's financial position, results of operations or disclosures. 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for a smaller reporting company.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

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

As of the end of the period covered by this Quarterly Report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer (Principal Executive 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.

Changes in Internal Control over Financial Reporting

During the quarter ended March 31, 2015, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not party to any material legal proceedings.

Item 1A. Risk Factors

Not required for a smaller reporting company.

24

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

On May 12, 2015, the Company issued an aggregate of 50,000,000 shares of common stock to employees for services provided, including 45,000,000 shares to the Company’s chief executive officer. In connection with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information

None. 

Item 6. Exhibits

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-101.INS	XBRL INSTANCE DOCUMENT
EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE
EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

25

SIGNATURES

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

	MEDEFILE INTERNATIONAL, INC.
December 22, 2015	By:	/s/ Niquana Noel
		Niquana Noel
		Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

26

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Niquana Noel, certify that:

1. I have reviewed this quarterly report on Form 10-Q/A of MedeFile International, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financing reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 22, 2015	By:	/s/ Niquana Noel
		Niquana Noel
		Chief Executive Officer (principal executive officer, principal financial officer)

EX-32.1

 Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MedeFile International, Inc. (the “Company”) on Form 10-Q/A for the quarter ended March 31, 2015 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: December 22, 2015	By:	/s/ Niquana Noel
		Niquana Noel
		Chief Executive Officer (principal executive officer, principal financial officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2015	May. 18, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Medefile International, Inc.
Entity Central Index Key	0000842013
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	true
Amendment Description	This Amendment No. 1 to Form 10-Q for the period ended March 31, 2015, amends our Quarterly Report on Form 10-Q for the period ended March 31, 2015, which was originally filed with the Securities and Exchange Commission on May 19, 2015 (the "Original 10-Q") This amendment is being filed solely to restate the financial statements as of and for the quarter ended March 31, 2015 for a failure to properly account for the derivative liability on a convertible note. Except with respect to the financial statements, and corresponding changes to Management's Discussion and Analysis of Financial Condition and Results of Operations, the Original 10-Q has not been amended, updated or otherwise modified.
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015
Entity Common Stock, Shares Outstanding		572,953,672

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Current assets
Cash	$ 512,714	$ 36,170
Accounts receivable	4,938	5,425
Inventory	23,096	23,412
Merchant services reserve	$ 2,939	2,939
Prepaid expense		5,709
Total current assets	$ 543,687	73,655
Website development, net of accumulated amortization	$ 243,643	$ 265,792
Furniture and equipment, net of accumulated depreciation
Total assets	$ 787,330	$ 339,447
Current Liabilities
Accounts payable and accrued liabilities	49,886	47,697
Convertible debenture	84,586	122,538
Deferred revenues	1,018	684
Derivative liability - convertible note	33,243
Derivative liability - warrants		51
Total Current Liabilities	$ 168,733	$ 170,970
Stockholders' Equity
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 and 225,836,554 shares issued and outstanding on March 31, 2015 and December 31, 2014, respectively	$ 52,295	$ 22,583
Additional paid in capital	28,060,805	27,430,517
Common stock to be issued	69,920	69,920
Accumulated deficit	(27,564,423)	(27,354,543)
Total stockholders' equity	618,597	168,477
Total liability and stockholders' equity	$ 787,330	$ 339,447

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2015	Dec. 31, 2014
Basis of Presentation and Nature of Business Operations - Balance Sheet [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	522,953,672	225,836,554
Common stock, shares outstanding	522,953,672	225,836,554

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Revenue	$ 13,100	$ 15,926
Cost of goods sold	316	279
Gross profit	12,784	15,647
Operating expenses
Selling, general and administrative expenses	165,275	173,607
Depreciation and amortization expenses	22,149	106
Total operating expenses	187,424	173,713
Loss from operations	(174,640)	(158,066)
Other income (expenses)
Interest expense - convertible note	$ (2,048)	(2,737)
Interest expense - discount on convertible note		$ (27,124)
Change in derivative liability - convertible note	$ (33,243)
Change of derivative liabilities - warrants	51	$ 948,857
Total other income (expense)	(35,240)	918,996
Gain (loss) before income tax	$ (209,880)	$ 760,930
Provision for income tax
Net income (loss)	$ (209,880)	$ 760,930
Net loss per share: basic	$ 0.00	$ 0.02
Net loss per share: diluted	$ 0.00	$ 0.00
Weighted average share outstanding basic	265,897,289	40,706,899
Weighted average share outstanding diluted	266,954,614	40,777,993

XML

Consolidated Statement of Stockholders' Equity - USD ($)	Total	Preferred	Common Stock	APIC	Common Stock Payable	Accumulated Deficit
Beginning Balance at Dec. 31, 2012	$ (5,235,708)		$ 1,141	$ 23,886,499		$ (29,123,348)
Beginning Balance (in shares) at Dec. 31, 2012			11,413,189
Sale of common stock	915,000		$ 1,742	913,258
Sale of common stock (in shares)			17,421,429
Adjustment to derivative liability	2,190,460			2,190,460
Covertible debenture discount	$ 110,000			110,000
Common stock issued for anti-dilution			$ 1,187	(1,187)
Common stock issued for anti-dilution (in shares)			11,872,281
Common stock payable	$ 69,920				$ 69,920
Net loss	1,427,251					1,427,251
Ending Balance at Dec. 31, 2013	(523,077)		$ 4,070	27,099,030	69,920	(27,696,097)
Ending Balance (in shares) at Dec. 31, 2013			40,706,899
Sale of common stock	350,000		$ 3,500	346,500
Sale of common stock (in shares)			35,000,000
Common stock issued for anti-dilution			$ 15,013	(15,013)
Common stock issued for anti-dilution (in shares)			150,129,655
Net loss	341,554					341,554
Ending Balance at Dec. 31, 2014	168,477		$ 22,583	27,430,517	69,920	(27,354,543)
Ending Balance (in shares) at Dec. 31, 2014			225,836,554
Sale of common stock	620,000		$ 27,910	592,090
Sale of common stock (in shares)			279,099,100
Stock issued for conversion of debt	40,000		$ 1,802	38,198
Stock issued for debt conversion (in shares)			18,018,018
Net loss	(209,880)					(209,880)
Ending Balance at Mar. 31, 2015	$ 618,597		$ 52,295	$ 28,060,805	$ 69,920	$ (27,564,423)
Ending Balance (in shares) at Mar. 31, 2015			522,953,672

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net income	$ (209,880)	$ 760,930
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		$ 106
Amortization	$ 22,149
Interest expense - discount on convertible debenture		$ 27,124
Change in derivative - convertible note	$ 33,243
(Gain) loss in fair value of derivative liabilities - warrants	(51)	(948,857)
Changes in operating assets and liabilities
Accounts receivable	487	(2,089)
Inventory	316	279
Prepaid insurance	5,709	1,057
Accounts payable and accrued liabilities	2,189	(9,656)
Accrued Interest - convertible debenture	2,048	2,737
Deferred revenue	334	(772)
Net cash used in operating activities	$ (143,456)	$ (169,141)
Cash flows from investing activities
Net cash used in investing activities
Cash flow from financing activities
Proceeds from common stock subscriptions	$ 620,000
Net cash provided by financing activities	620,000
Net increase (decrease) in cash and cash equivalents	476,544	$ (169,141)
Cash and cash equivalents at beginning of period	36,170	266,843
Cash and cash equivalents at end of period	$ 512,714	$ 97,702
Supplemental disclosure of cash flow information
Cash paid for interest
Cash paid for income taxes
Stock issued for conversion of debt	$ 40,000

XML

Basis of Presentation and Nature of Business Operations

3 Months Ended

Mar. 31, 2015

Basis of Presentation and Nature of Business Operations [Abstract]

BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of MedeFile International Inc., a Nevada corporation (the "Company"), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company's Form 10-K for the fiscal year ended December 31, 2014. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of March 31, 2015, and the results of operations and cash flows for the three months ended March 31, 2015 and 2014. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Restatement

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. 

The company assessed the fair value of the conversion option using the Black Scholes pricing model and recorded a derivative liability for the value.  The adjustment for this valuation to Derivative Liability is $33,243.  An adjustment to change in fair value of derivative liability is a loss of $33,243 for the quarter ended March 31, 2015.  

During the first quarter 2015, the company recognized a change in derivative for the convertible debenture in amount of $33,243, the resulting derivative liability balance at March 31, 2015 is $33,243.

The following table provides additional details regarding the changes to the balance sheet, statement of operations and statement of cash flows as of and for the three months ended March 31, 2015.

	Original						Restated
	March 31,			Restatement			March 31,
	2015			Adjustments			2015
Cash	$	512,714			-		$	512,714
Accounts receivable		4,938			-			4,938
Inventory		23,096			-			23,096
Merchant services reserve		2,939			-			2,939
Prepaid expense		-			-			-
		543,687						543,687
Website development, net of accumulated amortization		243,643			-			243,643
Furniture and equipment, net of accumulated depreciation		-			-			-
Total assets	$	787,330					$	787,330
Current Liabilities
Accounts payable and accrued liabilities	$	49,886			-		$	49,886
Convertible debenture		84,586			-			84,586
Deferred revenues		1,018			-			1,018
Derivative liability - convertible note		-			33,243			33,243
Derivative liability - warrants		-			-			-
Total Current Liabilities		135,490						168,733
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding		-			-			-
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 shares issued and outstanding		52,295			-			52,295
Additional paid in capital		28,060,805			-			28,060,805
Common stock to be issued		69,920			-			69,920
Accumulated deficit		(27,531,180	)		(33,243	)		(27,564,423	)
Total stockholders' equity		651,840						618,597
Total liability and stockholders' equity	$	787,330					$	787,330

	For the					For the
	three months					three months
	ended					ended
	March 31,					March 31,
	2015					2015
Revenue		13,100		-			13,100
Cost of goods sold		316		-			316
Gross profit		12,784					12,784
Operating expenses
Selling, general and administrative expenses		165,275		-			165,275
Depreciation and amortization expenses		22,149		-			22,149
Total operating expenses		187,424					187,424
Loss from operations		(174,640	)				(174,640	)
Other income (expenses)
Interest expense - convertible note		(2,048	)	-			(2,048	)
Change in derivative liability - convertible note		-		(33,243	)		(33,243	)
Change of derivative liabilities – warrants		51		-			51
Total other income (expense)		(1,997	)				(35,240	)
Gain (loss) before income tax		(176,637	)				(209,880	)
Provision for income tax
Net income (loss)	$	(176,637	)			$	(209,880	)
Net loss per share: basic	$	(0.00	)			$	(0.01	)
Net loss per share: diluted	$	(0.00	)
Weighted average share outstanding basic		265,897,289					40,706,899
Weighted average share outstanding diluted		266,954,614

	For the					For the
	three months					three months
	ended					ended
	March 31,					March 31,
	2015					2015
Cash flows from operating activities
Net income	$	(176,637	)	(33,243	)	$	(209,880	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-		-			-
Amortization		22,149		-			22,149
Interest expense - discount on convertible debenture		-		-			-
Change in derivative - convertible note		-		33,243			33,243
(Gain)loss  in fair value of derivative liabilities – warrants		(51	)	-			(51	)
Changes in operating assets and liabilities							-
Accounts receivable		487		-			487
Inventory		316		-			316
Prepaid insurance		5,709		-			5,709
Accounts payable and accrued liabilities		2,189		-			2,189
Accrued Interest - convertible debenture		2,048		-			2,048
Deferred revenue		334		-			334
Net Cash used in operating activities		(143,456	)				(143,456	)
Cash flows from investing activities
Net cash used in investing activities		-					-
Cash flow from financing activities
Proceeds from common stock subscriptions		620,000		-			620,000
Net cash provided by financing activities		620,000					620,000
Net increase (decrease) in cash and cash equivalents		476,544					476,544
Cash and cash equivalents at beginning of period		36,170					36,170
Cash and cash equivalents at end of period	$	512,714				$	512,714
Supplemental disclosure of cash flow information
Cash paid for interest	$	-				$	-
Cash paid for income taxes	$	-				$	-
Stock issued for conversion of debt	$	40,000				$	40,000

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 MedeFileiPHR solution has been designed to gather all of its members’ actual medical records on behalf of each member, and create a single, comprehensive Electronic Health Record (EHR). The member can access his/her records 24-hours a day, seven days a week – or authorize a third party user – on any web-enabled device (PC, cell phone, PDA, e-reader, et al), as well as the portable MedeFile flash drive/keychain or branded UBS-bracelet.

By subscribing to the MedeFile system, members 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, which also have 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; 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 $174,640 and a net loss of $209,880 for the three months ended March 31, 2015. During the comparable three month period of 2014, the Company had an operating loss of $158,066 and net income (as a result of the change in the valuation of the Company’s warrant derivative) of $760,930. The Company had an accumulated deficit of $27,564,423 as of March 31, 2015.  The Company has working capital of $374,954 as of March 31, 2015.

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 success of its growth strategy and its future performance, each of which is subject to general economic, financial, competitive, legislative, regulatory, and other factors beyond the Company's control.

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

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

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.

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 March 31, 2015 and December 31, 2014, deferred revenue totaled $1,018 and $684, respectively.

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company’s financial statements.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company beginning November 1, 2017 and, at that time the Company may adopt the new standard under the full retrospective approach or the modified retrospective approach. Early adoption is not permitted. The Company is currently evaluating the method and impact the adoption of ASU 2014-09 will have on the Company’s condensed consolidated financial statements and disclosures.

In January 2014, the FASB issued ASU 2014-04, an update to ASC 310, "Receivables." The ASU clarifies that an in substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The amendments may be adopted using either a modified retrospective transition method or a prospective transition method. Early adoption of the guidance is permitted. The impact of this guidance is currently being evaluated by the Company, but is not expected to have a significant impact on the Company's financial position, results of operations or disclosures.

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	$	-	$	-	$	243,643	$	243,643
Total	$	-	$	-	$	243,643	$	243,643
Liabilities
Derivative Liability – Convertible Note	$				$	$33,243	$	33,243
Deferred Revenues		1,018		-		-		1,018
Total	$	1,018	$	-	$	33,243	$	34,261

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 down in the amount of $30,000. There was no write down of inventory in the three months ended March 31, 2015.

Net Loss per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method.  

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.

XML

Accounts Receivable

3 Months Ended

Mar. 31, 2015

Accounts Receivable [Abstract]

ACCOUNTS RECEIVABLE

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. Accounts receivables as of March 31, 2015 totaled $4,938 and $5,425 as of December 31, 2014.

XML

Website Development

3 Months Ended

Mar. 31, 2015

Website Development [Abstract]

WEBSITE DEVELOPMENT

3. WEBSITE DEVELOPMENT

Website development consists of the following:

	March 31, 2015			December 31, 2014
Website development	$	328,737		$	324,285
Additional development		-			4,453
Accumulated amortization		(85,094	)		(62,946	)
Net website development	$	243,643		$	265,792

The Company completed the redesign in January 2015. The redesign is being amortized over a three year period. Amortization expense for the three month period ending March 31, 2015 was $22,149 compared to $0 for the three month period ended March 31, 2014, respectively.

XML

Furniture and Equipment

3 Months Ended

Mar. 31, 2015

Furniture and Equipment [Abstract]

FURNITURE AND EQUIPMENT

4. FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

	March 31,   2014			December 31,  2014
Computers and equipment	$	169,286		$	169,286
Furniture and fixtures		38,618			38,618
Subtotal		207,904			207,904
Less: accumulated depreciation		(207,904	)		(207,904	)
Net furniture and equipment	$	-		$	-

Depreciation is calculated by using the straight-line method over the estimated useful life. Furniture and equipment was fully depreciated as of March 31, 2015. Depreciation expense for the three months ended March 31, 2015 and 2014 totaled $0 and $106, respectively.

XML

Convertible Debebture - Related Party

3 Months Ended

Mar. 31, 2015

Convertible Debebture - Related Party [Abstract]

CONVERTIBLE DEBEBTURE - RELATED PARTY

5. CONVERTIBLE DEBENTURE – 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 are convertible into common stock at a conversion price of the lower of $0.10 (subject to adjustments for the events of stock splits, stock dividends and similar transactions) or 80% of the previous day’s market price of common stock.

	March 31, 2015			December 31, 2014
Convertible debenture – related party	$	122,538		$	122,538
Accumulated Interest		2,048
Payment		(40,000	)		-
Convertible debenture	$	84,586		$	122,538

XML

Warrant Liability

3 Months Ended

Mar. 31, 2015

Warrant Liability [Abstract]

WARRANT LIABILITY

6. WARRANT LIABILITY

In connection with certain securities purchase agreements entered into during the third quarter of 2011 and the second quarter of 2012 , the Company granted warrants with ratchet provisions. The warrants 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 following the issuance date, 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 (see below for variables used in assessing the fair value). 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 March 31, 2015, 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			March 31, 2015			December 31, 2014
Risk-free interest rate at grant date		1.21	%		1.13	%		1.27	%
Expected stock price volatility		194.9	%		92.2	%		189.65	%
Expected dividend payout		-			-			-
Expected option in life-years		4			.27			1.5

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 then-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			March 31, 2015
Risk-free interest rate at grant date		0.47	%		1.13	%
Expected stock price volatility		137.8	%		92.2	%
Expected dividend payout		-			-
Expected option in life-years		3.75			1.03.

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			March 31, 2015
Risk-free interest rate at grant date		0.47	%		1.13	%
Expected stock price volatility		137.8	%		92.2	%
Expected dividend payout		-			-
Expected option in life-years		3.75			1.05

Transactions involving warrants with ratchet provisions are as follows:

	Number of Warrants		Weighted-Average Price Per Share
Outstanding at December 31, 2013		3,008,511	$	0.50
Granted
Exercised
Canceled or expired
Additional due to ratchet trigger
Outstanding at December 31, 2014		3,008,511		0.50
Granted
Exercised
Canceled or expired
Addition due to ratchet trigger
Outstanding at March 31, 2015		3,008,511	$	0.50

As of March 31, 2015 and December 31, 2014, the warrant liability consisted of the following:

	March 31, 2015		December 31, 2014
Warrant liability (beginning balance)	$	51	$	5,618,819
Additional liability due to new grants
Loss(gain) on changes in fair market value of warrant liability		(51)		(5,618,786)
Net warrant liability	$	-	$	51

Change in fair market value of warrant liability resulted in a gain of $51 and a loss of $948,857 for the three months ended March 31 2015 and 2014, respectively.

XML

Derivative Liability

3 Months Ended

Mar. 31, 2015

Derivative Liability [Abstract]

DERIVATIVE LIABILITY

7. DERIVATIVE LIABILITY

The following Secured Convertible Debentures entered into in November and December 2013 contain ratchet provisions regarding the conversion of debt into shares of common stock.

The Company entered into 10% Secured Convertible Notes in November 2013 and December 2013, both for a term of 12 months. The debentures are in the amount of $50,000 and $60,000 respectively. The conversion price of the note is based on 80% of the previous day’s market price.

The Company assesses the fair value of the conversion option using the Black Scholes pricing model and records a derivative expense and a corresponding derivative liability for the value. The Company then assesses the fair value of the derivative liability quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility using daily 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 convertible debenture as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging” (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entity’s own common stock.

	March 31, 2015
Risk-free interest rate at grant date		.26	%
Expected stock price volatility		248	%
Expected dividend payout		–
Expected option in life-years		1.0

As of March 31 2015, derivative liability for this note is $33,243 and the change of derivative liability for the three months ended March 31, 2015 was $33,243.

XML

Equity

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

EQUITY

8. 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. On February 10, 2015 the Company increased its authorized shares of common stock from 500,000,000 to 700,000,000.

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 2,000,000 shares of common stock for an aggregate purchase price of $40,000.

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. 

2015

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.

On March 18, 2015 the Company issued 18,018,018 shares of common stock in exchange for $40,000 of debt owed by the Company

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

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.

Other Warrants

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.

Risk-free interest rate at grant date	0.39	%
Expected stock price volatility	172.1	%
Expected dividend payout	--
Expected option in life-years	4

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.

Transactions involving warrants are summarized as follows:

	Number of Warrants		Weighted- Average Price Per Share
Outstanding at December 31, 2013		29,000		30.07
Granted		-		-
Exercised		27,000		25.00
Canceled or expired		-		-
Outstanding at December 31, 2014		2,000	$	50.00
Granted		-		-
Exercised		-		-
Canceled or expired		-		-
Outstanding at March 31, 2015		2,000	$	50.00

Warrants Outstanding
				Weighted
				Average
				Remaining
Exercise		Number		Contractual
Prices		Outstanding		Life (years)
$	25		2,000		.25

XML

Related Party Transactions

3 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

9. RELATED PARTY TRANSACTIONS

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 are convertible into common stock at a conversion price of the lower of $0.10 (subject to adjustments for the events of stock splits, stock dividends and similar transactions) or 80% of the previous day’s market price of common stock.

XML

Subsequent Events

3 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

10.  SUBSEQUENT EVENTS

Management has evaluated all events through the date of issuance and there are no reportable subsequent events.

XML

Basis of Presentation and Nature of Business Operations (Policies)

3 Months Ended

Mar. 31, 2015

Basis of Presentation and Nature of Business Operations [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of MedeFile International Inc., a Nevada corporation (the "Company"), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company's Form 10-K for the fiscal year ended December 31, 2014. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of March 31, 2015, and the results of operations and cash flows for the three months ended March 31, 2015 and 2014. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Restatement

Restatement

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. 

The company assessed the fair value of the conversion option using the Black Scholes pricing model and recorded a derivative liability for the value.  The adjustment for this valuation to Derivative Liability is $33,243.  An adjustment to change in fair value of derivative liability is a loss of $33,243 for the quarter ended March 31, 2015.  

During the first quarter 2015, the company recognized a change in derivative for the convertible debenture in amount of $33,243, the resulting derivative liability balance at March 31, 2015 is $33,243.

The following table provides additional details regarding the changes to the balance sheet, statement of operations and statement of cash flows as of and for the three months ended March 31, 2015.

	Original						Restated
	March 31,			Restatement			March 31,
	2015			Adjustments			2015
Cash	$	512,714			-		$	512,714
Accounts receivable		4,938			-			4,938
Inventory		23,096			-			23,096
Merchant services reserve		2,939			-			2,939
Prepaid expense		-			-			-
		543,687						543,687
Website development, net of accumulated amortization		243,643			-			243,643
Furniture and equipment, net of accumulated depreciation		-			-			-
Total assets	$	787,330					$	787,330
Current Liabilities
Accounts payable and accrued liabilities	$	49,886			-		$	49,886
Convertible debenture		84,586			-			84,586
Deferred revenues		1,018			-			1,018
Derivative liability - convertible note		-			33,243			33,243
Derivative liability - warrants		-			-			-
Total Current Liabilities		135,490						168,733
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding		-			-			-
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 shares issued and outstanding		52,295			-			52,295
Additional paid in capital		28,060,805			-			28,060,805
Common stock to be issued		69,920			-			69,920
Accumulated deficit		(27,531,180	)		(33,243	)		(27,564,423	)
Total stockholders' equity		651,840						618,597
Total liability and stockholders' equity	$	787,330					$	787,330

	For the					For the
	three months					three months
	ended					ended
	March 31,					March 31,
	2015					2015
Revenue		13,100		-			13,100
Cost of goods sold		316		-			316
Gross profit		12,784					12,784
Operating expenses
Selling, general and administrative expenses		165,275		-			165,275
Depreciation and amortization expenses		22,149		-			22,149
Total operating expenses		187,424					187,424
Loss from operations		(174,640	)				(174,640	)
Other income (expenses)
Interest expense - convertible note		(2,048	)	-			(2,048	)
Change in derivative liability - convertible note		-		(33,243	)		(33,243	)
Change of derivative liabilities – warrants		51		-			51
Total other income (expense)		(1,997	)				(35,240	)
Gain (loss) before income tax		(176,637	)				(209,880	)
Provision for income tax
Net income (loss)	$	(176,637	)			$	(209,880	)
Net loss per share: basic	$	(0.00	)			$	(0.01	)
Net loss per share: diluted	$	(0.00	)
Weighted average share outstanding basic		265,897,289					40,706,899
Weighted average share outstanding diluted		266,954,614

	For the					For the
	three months					three months
	ended					ended
	March 31,					March 31,
	2015					2015
Cash flows from operating activities
Net income	$	(176,637	)	(33,243	)	$	(209,880	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-		-			-
Amortization		22,149		-			22,149
Interest expense - discount on convertible debenture		-		-			-
Change in derivative - convertible note		-		33,243			33,243
(Gain)loss  in fair value of derivative liabilities – warrants		(51	)	-			(51	)
Changes in operating assets and liabilities							-
Accounts receivable		487		-			487
Inventory		316		-			316
Prepaid insurance		5,709		-			5,709
Accounts payable and accrued liabilities		2,189		-			2,189
Accrued Interest - convertible debenture		2,048		-			2,048
Deferred revenue		334		-			334
Net Cash used in operating activities		(143,456	)				(143,456	)
Cash flows from investing activities
Net cash used in investing activities		-					-
Cash flow from financing activities
Proceeds from common stock subscriptions		620,000		-			620,000
Net cash provided by financing activities		620,000					620,000
Net increase (decrease) in cash and cash equivalents		476,544					476,544
Cash and cash equivalents at beginning of period		36,170					36,170
Cash and cash equivalents at end of period	$	512,714				$	512,714
Supplemental disclosure of cash flow information
Cash paid for interest	$	-				$	-
Cash paid for income taxes	$	-				$	-
Stock issued for conversion of debt	$	40,000				$	40,000

Nature of Business Operations

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 MedeFileiPHR solution has been designed to gather all of its members’ actual medical records on behalf of each member, and create a single, comprehensive Electronic Health Record (EHR). The member can access his/her records 24-hours a day, seven days a week – or authorize a third party user – on any web-enabled device (PC, cell phone, PDA, e-reader, et al), as well as the portable MedeFile flash drive/keychain or branded UBS-bracelet.

By subscribing to the MedeFile system, members 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, which also have 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; 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

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 $174,640 and a net loss of $209,880 for the three months ended March 31, 2015. During the comparable three month period of 2014, the Company had an operating loss of $158,066 and net income (as a result of the change in the valuation of the Company’s warrant derivative) of $760,930. The Company had an accumulated deficit of $27,564,423 as of March 31, 2015.  The Company has working capital of $374,954 as of March 31, 2015.

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 success of its growth strategy and its future performance, each of which is subject to general economic, financial, competitive, legislative, regulatory, and other factors beyond the Company's control.

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

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

Cash and Cash Equivalents

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

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.

Income Taxes

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

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

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

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

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

Deferred Revenue

The Company generally receives subscription fees for its services. From time to time, the Company will receive quarterly or annual subscriptions paid in advance and deferred revenue is recorded at that time. The deferred revenue is amortized into revenue on a pro- rata basis each month. Customers with quarterly or annual subscriptions may cancel their subscriptions and request a refund for future months' revenues at any time. Therefore, a liability is recorded to reflect the amounts that are potentially refundable. At March 31, 2015 and December 31, 2014, deferred revenue totaled $1,018 and $684, respectively.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company’s financial statements.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company beginning November 1, 2017 and, at that time the Company may adopt the new standard under the full retrospective approach or the modified retrospective approach. Early adoption is not permitted. The Company is currently evaluating the method and impact the adoption of ASU 2014-09 will have on the Company’s condensed consolidated financial statements and disclosures.

In January 2014, the FASB issued ASU 2014-04, an update to ASC 310, "Receivables." The ASU clarifies that an in substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The amendments may be adopted using either a modified retrospective transition method or a prospective transition method. Early adoption of the guidance is permitted. The impact of this guidance is currently being evaluated by the Company, but is not expected to have a significant impact on the Company's financial position, results of operations or disclosures.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

The carrying amounts of these items approximated fair value.

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

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

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

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

The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below:  

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Assets
Website development	$	-	$	-	$	243,643	$	243,643
Total	$	-	$	-	$	243,643	$	243,643
Liabilities
Derivative Liability – Convertible Note	$				$	$33,243	$	33,243
Deferred Revenues		1,018		-		-		1,018
Total	$	1,018	$	-	$	33,243	$	34,261

Impairment of Long Lived Assets

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

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 down in the amount of $30,000. There was no write down of inventory in the three months ended March 31, 2015.

Net Loss per Share

Net Loss per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. 

Management Estimates

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

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.

XML

Basis of Presentation and Nature of Business Operations (Tables)

3 Months Ended

Mar. 31, 2015

Basis of Presentation and Nature of Business Operations [Abstract]

Schedule of changes to the balance sheet, statement of operations and statement of cash flows

	Original						Restated
	March 31,			Restatement			March 31,
	2015			Adjustments			2015
Cash	$	512,714			-		$	512,714
Accounts receivable		4,938			-			4,938
Inventory		23,096			-			23,096
Merchant services reserve		2,939			-			2,939
Prepaid expense		-			-			-
		543,687						543,687
Website development, net of accumulated amortization		243,643			-			243,643
Furniture and equipment, net of accumulated depreciation		-			-			-
Total assets	$	787,330					$	787,330
Current Liabilities
Accounts payable and accrued liabilities	$	49,886			-		$	49,886
Convertible debenture		84,586			-			84,586
Deferred revenues		1,018			-			1,018
Derivative liability - convertible note		-			33,243			33,243
Derivative liability - warrants		-			-			-
Total Current Liabilities		135,490						168,733
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding		-			-			-
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 shares issued and outstanding		52,295			-			52,295
Additional paid in capital		28,060,805			-			28,060,805
Common stock to be issued		69,920			-			69,920
Accumulated deficit		(27,531,180	)		(33,243	)		(27,564,423	)
Total stockholders' equity		651,840						618,597
Total liability and stockholders' equity	$	787,330					$	787,330

	For the					For the
	three months					three months
	ended					ended
	March 31,					March 31,
	2015					2015
Revenue		13,100		-			13,100
Cost of goods sold		316		-			316
Gross profit		12,784					12,784
Operating expenses
Selling, general and administrative expenses		165,275		-			165,275
Depreciation and amortization expenses		22,149		-			22,149
Total operating expenses		187,424					187,424
Loss from operations		(174,640	)				(174,640	)
Other income (expenses)
Interest expense - convertible note		(2,048	)	-			(2,048	)
Change in derivative liability - convertible note		-		(33,243	)		(33,243	)
Change of derivative liabilities – warrants		51		-			51
Total other income (expense)		(1,997	)				(35,240	)
Gain (loss) before income tax		(176,637	)				(209,880	)
Provision for income tax
Net income (loss)	$	(176,637	)			$	(209,880	)
Net loss per share: basic	$	(0.00	)			$	(0.01	)
Net loss per share: diluted	$	(0.00	)
Weighted average share outstanding basic		265,897,289					40,706,899
Weighted average share outstanding diluted		266,954,614

	For the					For the
	three months					three months
	ended					ended
	March 31,					March 31,
	2015					2015
Cash flows from operating activities
Net income	$	(176,637	)	(33,243	)	$	(209,880	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-		-			-
Amortization		22,149		-			22,149
Interest expense - discount on convertible debenture		-		-			-
Change in derivative - convertible note		-		33,243			33,243
(Gain)loss  in fair value of derivative liabilities – warrants		(51	)	-			(51	)
Changes in operating assets and liabilities							-
Accounts receivable		487		-			487
Inventory		316		-			316
Prepaid insurance		5,709		-			5,709
Accounts payable and accrued liabilities		2,189		-			2,189
Accrued Interest - convertible debenture		2,048		-			2,048
Deferred revenue		334		-			334
Net Cash used in operating activities		(143,456	)				(143,456	)
Cash flows from investing activities
Net cash used in investing activities		-					-
Cash flow from financing activities
Proceeds from common stock subscriptions		620,000		-			620,000
Net cash provided by financing activities		620,000					620,000
Net increase (decrease) in cash and cash equivalents		476,544					476,544
Cash and cash equivalents at beginning of period		36,170					36,170
Cash and cash equivalents at end of period	$	512,714				$	512,714
Supplemental disclosure of cash flow information
Cash paid for interest	$	-				$	-
Cash paid for income taxes	$	-				$	-
Stock issued for conversion of debt	$	40,000				$	40,000

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

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Assets
Website development	$	-	$	-	$	243,643	$	243,643
Total	$	-	$	-	$	243,643	$	243,643
Liabilities
Derivative Liability – Convertible Note	$				$	$33,243	$	33,243
Deferred Revenues		1,018		-		-		1,018
Total	$	1,018	$	-	$	33,243	$	34,261

XML

Website Development (Tables)

3 Months Ended

Mar. 31, 2015

Website Development [Abstract]

Schedule of website development

	March 31, 2015			December 31, 2014
Website development	$	328,737		$	324,285
Additional development		-			4,453
Accumulated amortization		(85,094	)		(62,946	)
Net website development	$	243,643		$	265,792

XML

Furniture and Equipment (Tables)

3 Months Ended

Mar. 31, 2015

Furniture and Equipment [Abstract]

Schedule of furniture and equipment

	March 31,   2014			December 31,  2014
Computers and equipment	$	169,286		$	169,286
Furniture and fixtures		38,618			38,618
Subtotal		207,904			207,904
Less: accumulated depreciation		(207,904	)		(207,904	)
Net furniture and equipment	$	-		$	-

XML

Convertible Debebture - Related Party (Tables)

3 Months Ended

Mar. 31, 2015

Convertible Debebture - Related Party [Abstract]

Schedule of convertible debentures

	March 31, 2015			December 31,  2014
Convertible debenture – related party	$	122,538		$	122,538
Accumulated Interest
Payment		(40,000	)		-
Convertible debenture	$	84,586		$	122,538

XML

Warrant Liability (Tables)

3 Months Ended

Mar. 31, 2015

Class of Warrant or Right [Line Items]

Schedule of Transactions involving warrants

	Number of Warrants		Weighted-Average Price Per Share
Outstanding at December 31, 2013		3,008,511	$	0.50
Granted
Exercised
Canceled or expired
Additional due to ratchet trigger
Outstanding at December 31, 2014		3,008,511		0.50
Granted
Exercised
Canceled or expired
Addition due to ratchet trigger
Outstanding at March 31, 2015		3,008,511	$	0.50

Schedule of warrant liability

	March 31, 2015		December 31, 2014
Warrant liability (beginning balance)	$	51	$	5,618,819
Additional liability due to new grants
Loss(gain) on changes in fair market value of warrant liability		(51)		(5,618,786)
Net warrant liability	$	-	$	51

Warrants granted during July 2011 [Member]

Class of Warrant or Right [Line Items]

Schedule of fair value assumptions for warrants

	Grant Date			March 31, 2015			December 31, 2014
Risk-free interest rate at grant date		1.21	%		1.13	%		1.27	%
Expected stock price volatility		194.9	%		92.2	%		189.65	%
Expected dividend payout		-			-			-
Expected option in life-years		4			.27			1.5

Warrants granted during April 2012 [Member]

Class of Warrant or Right [Line Items]

Schedule of fair value assumptions for warrants

	Grant Date			March 31, 2015
Risk-free interest rate at grant date		0.47	%		1.13	%
Expected stock price volatility		137.8	%		92.2	%
Expected dividend payout		-			-
Expected option in life-years		3.75			1.05

Warrants granted during April 2012 [Member] | Shareholder and Brother of Chief Executive Officer [Member]

Class of Warrant or Right [Line Items]

Schedule of fair value assumptions for warrants

	Grant Date			March 31, 2015
Risk-free interest rate at grant date		0.47	%		1.13	%
Expected stock price volatility		137.8	%		92.2	%
Expected dividend payout		-			-
Expected option in life-years		3.75			1.03.

XML

Derivative Liability (Tables)

3 Months Ended

Mar. 31, 2015

Derivative Liability [Abstract]

Schedule of derivative liability

	March 31, 2015
Risk-free interest rate at grant date		.26	%
Expected stock price volatility		248	%
Expected dividend payout		–
Expected option in life-years		1.0

XML

Equity (Tables)

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Schedule of estimated value of the compensatory warrants granted to non-employees in exchange for services and financing expenses

Risk-free interest rate at grant date	0.39	%
Expected stock price volatility	172.1	%
Expected dividend payout	--
Expected option in life-years	4

Schedule of warrants transactions

	Number of Warrants		Weighted-Average Price Per Share
Outstanding at December 31, 2013		29,000		30.07
Granted		-		-
Exercised		27,000		25.00
Canceled or expired		-		-
Outstanding at December 31, 2014		2,000	$	50.00
Granted		-		-
Exercised		-		-
Canceled or expired		-		-
Outstanding at March 31, 2015		2,000	$	50.00

Schedule of outstanding warrants

Warrants Outstanding
				Weighted
				Average
				Remaining
Exercise		Number		Contractual
	Prices		Outstanding		Life (years)
$	25		2,000		.25

XML

Basis of Presentation and Nature of Business Operations (Details) - USD ($)	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash	$ 512,714	$ 36,170	$ 97,702	$ 266,843
Accounts receivable	4,938	5,425
Inventory	23,096	23,412
Merchant services reserve	$ 2,939	2,939
Prepaid expense		5,709
Total current assets	$ 543,687	73,655
Website development, net of accumulated amortization	$ 243,643	$ 265,792
Furniture and equipment, net of accumulated depreciation
Total assets	$ 787,330	$ 339,447
Current Liabilities
Accounts payable and accrued liabilities	49,886	47,697
Convertible debenture	84,586	122,538
Deferred revenues	1,018	684
Derivative liability - convertible note	33,243
Derivative liability - warrants		51
Total Current Liabilities	$ 168,733	$ 170,970
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 shares issued and outstanding	$ 52,295	$ 22,583
Additional paid in capital	28,060,805	27,430,517
Common stock to be issued	69,920	69,920
Accumulated deficit	(27,564,423)	(27,354,543)
Total stockholders' (deficit)	618,597	168,477		$ (523,077)	$ (5,235,708)
Total liability and stockholders' equity	787,330	339,447
Original [Member]
Cash	512,714	$ 36,170
Accounts receivable	4,938
Inventory	23,096
Merchant services reserve	$ 2,939
Prepaid expense
Total current assets	$ 543,687
Website development, net of accumulated amortization	$ 243,643
Furniture and equipment, net of accumulated depreciation
Total assets	$ 787,330
Current Liabilities
Accounts payable and accrued liabilities	49,886
Convertible debenture	84,586
Deferred revenues	$ 1,018
Derivative liability - convertible note
Derivative liability - warrants
Total Current Liabilities	$ 135,490
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 shares issued and outstanding	$ 52,295
Additional paid in capital	28,060,805
Common stock to be issued	69,920
Accumulated deficit	(27,531,180)
Total stockholders' (deficit)	651,840
Total liability and stockholders' equity	$ 787,330
Restatement Adjustments [Member]
Cash
Accounts receivable
Inventory
Merchant services reserve
Prepaid expense
Total current assets
Website development, net of accumulated amortization
Furniture and equipment, net of accumulated depreciation
Total assets
Current Liabilities
Accounts payable and accrued liabilities
Convertible debenture
Deferred revenues
Derivative liability - convertible note	$ 33,243
Derivative liability - warrants
Total Current Liabilities
Preferred stock, $.0001 par value: 10,000,000 authorized, no shares issued and outstanding
Common stock, $.0001 par value: 500,000,000 authorized; 522,953,672 shares issued and outstanding
Additional paid in capital
Common stock to be issued
Accumulated deficit	$ (33,243)
Total stockholders' (deficit)
Total liability and stockholders' equity

XML

Basis of Presentation and Nature of Business Operations (Details 1) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenue	$ 13,100	$ 15,926
Cost of goods sold	316	279
Gross profit	12,784	15,647
Operating expenses
Selling, general and administrative expenses	165,275	173,607
Depreciation and amortization expenses	22,149	106
Total operating expenses	187,424	173,713
Loss from operations	(174,640)	(158,066)
Other income (expenses)
Interest expense - convertible note	(2,048)	$ (2,737)
Change in derivative liability - convertible note	(33,243)
Change of derivative liabilities - warrants	51	$ 948,857
Total other income (expense)	(35,240)	918,996
Gain (loss) before income tax	$ (209,880)	$ 760,930
Provision for income tax
Net income (loss)	$ (209,880)	$ 760,930
Net loss per share: basic	$ 0.00	$ 0.02
Net loss per share: diluted	$ 0.00	$ 0.00
Weighted average share outstanding basic	265,897,289	40,706,899
Weighted average share outstanding diluted	266,954,614	40,777,993
Original [Member]
Revenue	$ 13,100
Cost of goods sold	316
Gross profit	12,784
Operating expenses
Selling, general and administrative expenses	165,275
Depreciation and amortization expenses	22,149
Total operating expenses	187,424
Loss from operations	(174,640)
Other income (expenses)
Interest expense - convertible note	$ (2,048)
Change in derivative liability - convertible note
Change of derivative liabilities - warrants	$ 51
Total other income (expense)	(1,997)
Gain (loss) before income tax	$ (176,637)
Provision for income tax
Net income (loss)	$ (176,637)
Net loss per share: basic	$ 0.00
Net loss per share: diluted	$ 0.00
Weighted average share outstanding basic	265,897,289
Weighted average share outstanding diluted	266,954,614
Restatement Adjustments [Member]
Revenue
Cost of goods sold
Gross profit
Operating expenses
Selling, general and administrative expenses
Depreciation and amortization expenses
Total operating expenses
Loss from operations
Other income (expenses)
Interest expense - convertible note
Change in derivative liability - convertible note	$ (33,243)
Change of derivative liabilities - warrants
Total other income (expense)
Gain (loss) before income tax
Provision for income tax
Net income (loss)
Net loss per share: basic
Net loss per share: diluted
Weighted average share outstanding basic
Weighted average share outstanding diluted

XML

Basis of Presentation and Nature of Business Operations (Details 2) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net loss	$ (209,880)	$ 760,930
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		$ 106
Amortization	$ 22,149
Interest expense - discount on convertible debenture		$ 27,124
Change in derivative - convertible note	$ 33,243
(Gain) loss in fair value of derivative liabilities - warrants	(51)	(948,857)
Changes in operating assets and liabilities
Accounts receivable	487	(2,089)
Inventory	316	279
Prepaid insurance	5,709	1,057
Accounts payable and accrued liabilities	2,189	(9,656)
Accrued Interest - convertible debenture	2,048	2,737
Deferred revenue	334	(772)
Net cash used in operating activities	(143,456)	$ (169,141)
Cash flow from financing activities
Proceeds from common stock subscriptions	620,000
Net cash provided by financing activities	620,000
Net increase (decrease) in cash and cash equivalents	476,544	$ (169,141)
Cash and cash equivalents at beginning of period	36,170	266,843
Cash and cash equivalents at end of period	$ 512,714	$ 97,702
Supplemental disclosure of cash flow information
Cash paid for interest
Cash paid for income taxes
Stock issued for conversion of debt	$ 40,000
Original [Member]
Cash flows from operating activities
Net loss	$ (176,637)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation
Amortization	$ 22,149
Interest expense - discount on convertible debenture
Change in derivative - convertible note
(Gain) loss in fair value of derivative liabilities - warrants	$ (51)
Changes in operating assets and liabilities
Accounts receivable	487
Inventory	316
Prepaid insurance	5,709
Accounts payable and accrued liabilities	2,189
Accrued Interest - convertible debenture	2,048
Deferred revenue	334
Net cash used in operating activities	$ (143,456)
Cash flows from investing activities
Net cash used in investing activities
Cash flow from financing activities
Proceeds from common stock subscriptions	$ 620,000
Net cash provided by financing activities	620,000
Net increase (decrease) in cash and cash equivalents	476,544
Cash and cash equivalents at beginning of period	36,170
Cash and cash equivalents at end of period	$ 512,714
Supplemental disclosure of cash flow information
Cash paid for interest
Cash paid for income taxes
Stock issued for conversion of debt	$ 40,000
Restatement Adjustments [Member]
Cash flows from operating activities
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation
Amortization
Interest expense - discount on convertible debenture
Change in derivative - convertible note	$ 33,243
(Gain) loss in fair value of derivative liabilities - warrants
Changes in operating assets and liabilities
Accounts receivable
Inventory
Prepaid insurance
Accounts payable and accrued liabilities
Accrued Interest - convertible debenture
Deferred revenue
Net cash used in operating activities
Cash flows from investing activities
Net cash used in investing activities
Cash flow from financing activities
Proceeds from common stock subscriptions
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental disclosure of cash flow information
Cash paid for interest
Cash paid for income taxes
Stock issued for conversion of debt

XML

Basis of Presentation and Nature of Business Operations (Details 3)	Mar. 31, 2015 USD ($)
Assets
Website development	$ 243,643
Total	243,643
Liabilities
Derivative liability - convertible note	33,243
Deferred Revenues	1,018
Total	$ 34,261
Level 1
Assets
Website development
Total
Liabilities
Derivative liability - convertible note
Deferred Revenues	$ 1,018
Total	$ 1,018
Level 2
Assets
Website development
Total
Liabilities
Derivative liability - convertible note
Deferred Revenues
Total
Level 3
Assets
Website development	$ 243,643
Total	243,643
Liabilities
Derivative liability - convertible note	$ 33,243
Deferred Revenues
Total	$ 33,243

XML

Basis of Presentation and Nature of Business Operations (Details Textual) - USD ($)		3 Months Ended
	Nov. 04, 2013	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Dec. 17, 2013
Derivative [Line Items]
Net loss		$ (209,880)	$ 760,930
Accumulated deficit		(27,564,423)		$ (27,354,543)
Net working capital deficit		374,954
Deferred revenues		1,018		$ 684
Operating loss		$ (174,640)	$ (158,066)
Method used for fair value of warrant granted		Black Scholes pricing model
Change in derivative - convertible note		$ 33,243
Derivative liability - convertible note		$ 33,243
Convertible Debt Securities [Member]
Derivative [Line Items]
Convertible Debt	$ 50,000				$ 60,000
Percentage of secured convertible debenture	10.00%
Term on secured convertible debentures	1 year

XML

Basis of Presentation and Nature of Business Operations (Details Textual 1)	3 Months Ended
	Mar. 31, 2015
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful lives	10 years
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful lives	3 years

XML

Basis of Presentation and Nature of Business Operations (Details Textual 2) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Loss on write-off of inventory		$ 30,000

XML

Accounts Receivable (Details) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Accounts Receivable [Abstract]
Accounts receivable	$ 4,938	$ 5,425

XML

Website Development (Details) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization	$ (85,094)	$ (62,946)
Net website development	243,643	265,792
Website development
Finite-Lived Intangible Assets [Line Items]
Website development	$ 328,737	324,285
Additional development
Finite-Lived Intangible Assets [Line Items]
Website development		$ 4,453

XML

Website Development (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Website Development [Abstract]
Amortization	$ 22,149
Finite lived intangible assets, amortization period	3 years

XML

Furniture and Equipment (Details) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Subtotal	$ 207,904	$ 207,904
Less: accumulated depreciation	$ (207,904)	$ (207,904)
Net furniture and equipment
Computers and equipment [Member]
Property, Plant and Equipment [Line Items]
Subtotal	$ 169,286	$ 169,286
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Subtotal	$ 38,618	$ 38,618

XML

Furniture and Equipment (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Furniture and Equipment [Abstract]
Depreciation expense		$ 106

XML

Convertible Debebture - Related Party (Details) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Convertible Debebture - Related Party [Abstract]
Convertible debenture - related party	$ 122,538	$ 122,538
Accumulated interest	2,048
Payment	(40,000)
Convertible debenture	$ 84,586	$ 122,538

XML

Convertible Debebture - Related Party (Details Textual) - Secured Convertible Debentures [Member]		1 Months Ended	12 Months Ended
	Nov. 04, 2013 USD ($) $ / shares	Dec. 17, 2013 USD ($) $ / shares	Dec. 31, 2014 Debenture
Short-term Debt [Line Items]
Terms of conversion feature	One year	One year
Convertible debenture issued | $	$ 50,000	$ 60,000
Convertible conversion price | $ / shares	$ 0.10	$ 0.10
Secured convertible debentures interest rate			10.00%
Number of secured convertible debentures | Debenture			2

XML

Warrant Liability (Details)	1 Months Ended		3 Months Ended	12 Months Ended
	Apr. 30, 2012	Jul. 31, 2011	Mar. 31, 2015	Dec. 31, 2014
Warrants granted during July 2011 [Member]
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date		1.21%	1.13%	1.27%
Expected stock price volatility		194.90%	92.20%	189.65%
Expected dividend payout
Expected option in life-years		4 years	3 months 7 days	1 year 6 months
Warrants granted during April 2012 [Member]
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date	0.47%		1.13%
Expected stock price volatility	137.80%		92.20%
Expected dividend payout
Expected option in life-years	3 years 9 months		1 year 18 days
Warrants granted during April 2012 [Member] | Shareholder and Brother of Chief Executive Officer [Member]
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date	0.47%		1.13%
Expected stock price volatility	137.80%		92.20%
Expected dividend payout
Expected option in life-years	3 years 9 months		1 year 11 days

XML

Warrant Liability (Details 1) - Warrants with ratchet provisions [Member]	3 Months Ended	12 Months Ended
	Mar. 31, 2015 $ / shares $ / Warrant shares	Dec. 31, 2014 $ / shares $ / Warrant shares
Warrant Outstanding [Roll Forward]
Number of Warrants, Outstanding, Beginning	3,008,511	3,008,511
Number of Warrants, Granted
Number of Warrants, Exercised
Number of Warrants, Canceled or expired
Additional due to ratchet trigger
Number of Warrants, Outstanding, Ending	3,008,511	3,008,511
Warrants Outstanding Weighted Average Price Per Share [Roll Forward]
Weighted-Average Price Per Share, Outstanding Beginning | $ / Warrant	0.50	0.50
Weighted average price per share, Granted | $ / shares
Weighted average price per share, Exercised | $ / shares
Weighted average price per share, Canceled or expired | $ / shares
Additional due to ratchet trigger | $ / Warrant
Weighted-Average Price Per Share, Outstanding Ending | $ / Warrant	0.50	0.50

XML

Warrant Liability (Details 2) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Fair Value of Warrant Liability [Roll Forward]
Warrant liability (beginning balance)	$ 51	$ 5,618,819
Additional liability due to new grants
Loss(gain) on changes in fair market value of warrant liability	$ (51)	$ (5,618,786)
Net warrant liability		$ 51

XML

Warrant Liability (Details Textual) - USD ($)	1 Months Ended		3 Months Ended
	Apr. 30, 2012	Jul. 31, 2011	Mar. 31, 2015	Mar. 31, 2014
Class of Warrant or Right [Line Items]
Term of warrants expired from date of grant			4 years
Company granted the additional shares of common stock period			2 years
Method used for fair value of warrant granted			Black Scholes pricing model
Loss (gain) on changes in fair market value of warrant liability			$ 51	$ 948,857
Warrants granted during July 2011 [Member] | Common Stock
Class of Warrant or Right [Line Items]
Sale of common stock (in shares)		35,461
Number of share stock called by warrants		35,461
Exercise price of warrants (in dollars per share)		$ 2.50
Warrants granted during April 2012 [Member] | Common Stock
Class of Warrant or Right [Line Items]
Sale of common stock (in shares)	1,000,000
Number of share stock called by warrants	1,808,511
Exercise price of warrants (in dollars per share)	$ 0.50
Warrants granted during April 2012 [Member] | Shareholder and Brother of Chief Executive Officer [Member] | Common Stock
Class of Warrant or Right [Line Items]
Number of share stock called by warrants	200,000
Exercise price of warrants (in dollars per share)	$ 0.50
Warrants granted during April 2012 [Member] | Shareholder and Brother of Chief Executive Officer [Member] | Preferred Stock
Class of Warrant or Right [Line Items]
Sale of common stock (in shares)	100,000

XML

Derivative Liability (Details) - Common Stock [Member]	3 Months Ended
	Mar. 31, 2015
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-free interest rate at grant date	0.26%
Expected stock price volatility	248.00%
Expected dividend payout
Expected option in life-years	1 year

XML

Derivative Liability (Details Textual) - USD ($)	1 Months Ended	3 Months Ended	12 Months Ended
	Nov. 30, 2013	Mar. 31, 2015	Dec. 31, 2013
Derivative [Line Items]
Change in derivative - convertible note		$ 33,243
Method used for fair value of warrant granted		Black Scholes pricing model
Derivative liability - convertible note		$ 33,243
Convertible Debt Securities [Member]
Derivative [Line Items]
Percentage of secured convertible debenture	10.00%		10.00%
Debt conversion description	The conversion price of the note is based on 80% of the previous day's market price.		The conversion price of the note is based on 80% of the previous day's market price.
Term on secured convertible debentures	12 months		12 months
Convertible debenture	$ 50,000		$ 60,000

XML

Equity (Details) - Common Stock Warrants [Member] - Consultant [Member]	3 Months Ended
	Mar. 31, 2015
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date	0.39%
Expected stock price volatility	172.10%
Expected dividend payout
Expected option in life-years	4 years

XML

Equity (Details 1) - Warrant [Member] - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Class of Warrant or Right [Line Items]
Beginning balance	2,000	29,000
Granted
Exercised		27,000
Canceled or expired
Ending balance	2,000	2,000
Weighted average price per share, Beginning balance	$ 50.00	$ 30.07
Weighted average price per share, Granted
Weighted average price per share, Exercised		$ 25.00
Weighted average price per share, Canceled or expired
Weighted average price per share, Ending balance	$ 50.00	$ 50.00

XML

Equity (Details 2) - Exercise Prices 25 [Member]	3 Months Ended
	Mar. 31, 2015 $ / shares shares
Warrants Outstanding
Exercise price of warrants (in dollars per share) | $ / shares	$ 25
Warrants Outstanding, Number Outstanding | shares	2,000
Warrants Outstanding, Weighted Average Remaining Contractual Life	3 months

XML

Equity (Details Textual) - shares	Oct. 08, 2012	Mar. 31, 2015	Feb. 10, 2015	Dec. 31, 2014	Dec. 19, 2013
Reverse split of common stock	5,000-to-1
Common stock, shares authorized		500,000,000	700,000,000	500,000,000
Common Stock [Member]
Common stock, shares authorized	75,000,000,000		700,000,000		100,000,000

XML

Equity (Details Textual 1) - USD ($)				1 Months Ended								3 Months Ended	12 Months Ended
	Jul. 06, 2014	Jul. 03, 2014	May. 01, 2013	Mar. 18, 2015	Apr. 17, 2014	Dec. 20, 2013	Dec. 17, 2013	Sep. 23, 2013	Aug. 27, 2013	Apr. 15, 2013	Jan. 17, 2013	Mar. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Aggregate purchase price of common stock sold												$ 620,000	$ 350,000	$ 915,000
Common stock shares issued in exchange of debt				18,018,018
Common stock in exchange of debt owed by company				$ 40,000
Security Purchase Agreement [Member]
Number of stock sold (in shares)			11,872,281		24,545,455						400,000	279,099,100
Aggregate purchase price of common stock sold											$ 200,000	$ 620,000
Security Purchase Agreement [Member] | Accredited Investors [Member]
Number of stock sold (in shares)	20,000,000	15,000,000				15,000,000	2,000,000	21,429	42,743	2,000,000
Aggregate purchase price of common stock sold	$ 150,000	$ 200,000				$ 300,000	$ 40,000	$ 15,000	$ 29,920	$ 400,000
Lyle Hauser [Member]
Number of stock sold (in shares)					125,584,200
Lyle Hauser [Member] | Security Purchase Agreement [Member]
Number of stock sold (in shares)					150,129,655

XML

Equity (Details Textual 2) - USD ($)				1 Months Ended		3 Months Ended	12 Months Ended
	May. 01, 2013	Apr. 12, 2012	Apr. 10, 2012	Apr. 17, 2014	Jan. 17, 2013	Mar. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Schedule Of Equity [Line Items]
Preferred stock designated as Series B Convertible Preferred Stock						10,000,000	10,000,000
Sale of common stock						$ 620,000	$ 350,000	$ 915,000
Lyle Hauser [Member]
Schedule Of Equity [Line Items]
Number of stock sold (in shares)				125,584,200
Series B Preferred Stock [Member]
Schedule Of Equity [Line Items]
Preferred stock designated as Series B Convertible Preferred Stock			100,000
Liquidation preference stated value			$ 1.00
Number of votes entitled to be cast			0.00051%
Total percentage of number of votes entitled to be cast per share			51.00%
Common stock for each share of Series B Preferred Stock			2
Number of preferred stock converted		100,000
Stock issued for debt conversion (in shares)		200,000
Security Purchase Agreement [Member]
Schedule Of Equity [Line Items]
Sale of common stock					$ 200,000	$ 620,000
Number of stock sold (in shares)	11,872,281			24,545,455	400,000	279,099,100
Security Purchase Agreement [Member] | Lyle Hauser [Member]
Schedule Of Equity [Line Items]
Number of stock sold (in shares)				150,129,655
Security Purchase Agreement [Member] | Series B Preferred Stock [Member] | Lyle Hauser [Member]
Schedule Of Equity [Line Items]
Number of stock sold (in shares)		100,000
Warrants issued to purchase common stock to the investor		200,000
Warrants Outstanding, Exercise Price		$ 0.50
Term of warrants		4 years

XML

Equity (Detail Textuals 3) - Warrant [Member] - Consultants - $ / shares	1 Months Ended
	Jul. 28, 2011	Jun. 22, 2011
Class of Warrant or Right [Line Items]
Number of warrants awarded	27,000	2,000
Warrants Outstanding, Exercise Price	$ 25	$ 50
Term of warrants	3 years	4 years
Method used for fair value of the warrants	Black-Scholes pricing model	Black-Scholes pricing model

XML

Related Party Transactions (Details) - Secured Debt [Member]	3 Months Ended
	Mar. 31, 2015 Debenture	Dec. 17, 2013 USD ($) $ / shares	Nov. 04, 2013 USD ($) $ / shares
Convertible Debenture Related Party (Textual)
Number of secured convertible debentures | Debenture	2
Secured convertible debentures interest rate	10.00%
Term on secured convertible debentures	1 year
Convertible debenture issued | $		$ 60,000	$ 50,000
Convertible conversion price | $ / shares		$ 0.10	$ 0.10
Debt conversion description	80% of the previous day's market price of common stock.