The Hunt for the Next 10 Bagger

[stervc]

Edited: MDFI**Converts $4M Debt to Equity…

MDFI has been strengthening their financials by filing with the SEC that their negative Free Cash Flow for its quarter ended June 30, 2009 was $(38,049), a 93% improvement over the year earlier same quarter when Medefile International generated $(555,586) in negative Free Cash Flow. Medefile International has generated fourteen consecutive quarters of negative Free Cash Flow. Free Cash Flow for the most recent quarter also reached a four year high.
http://finance.paidcontent.org/freelunch/action/linkout?URL=http%3A%2F%2Fwww.StockTrendNews.com%2F658761&Title=Medefile+International

That 93% improvement is setting the stage for some very nice growth. I think what jumpstarted this growth was the Debt Conversion below:

MedeFile Materially Strengthens Balance Sheet Through Equity Financing and Debt Conversion Totaling $4 Million
http://www.bio-medicine.org/medicine-news-1/MedeFile-Materially-Strengthens-Balance-Sheet-Through-Equity-Financing-and-Debt-Conversion-Totaling--244-Million-10324-1/

MDFI received $1.95 Million in Net Cash Proceeds from three separate private placement transactions of restricted stock and warrants and converted $2.1 Million of Debt into Equity.



Conversion Valuation from Private Placements #1 & #2:
$1.79 million for 11.9 million restricted shares of common stock. Below is the Conversion Valuation of this Debt to Equity Conversion:

$1,790,000 ÷ 11,900,000 shares = .15 MDFI Share Conversion Valuation/Worth



Conversion Valuation from Private Placement #3:
$160,000 in gross proceeds from the private placement of 1.1 million restricted shares of common stock. Below is the Conversion Valuation of this Debt to Equity Conversion:

$160,000 ÷ 1,100,000 shares = .145 MDFI Share Conversion Valuation/Worth



MDFI reported in a previous filing that the Company's largest stockholder and primary creditor has converted $2.1 million in debt into 14 million restricted shares of Medefile's common stock, thereby reducing the Company's indebtedness to the stockholder from approximately $3.04 million to approximately $940,000. Below is the Conversion Valuation of this Debt to Equity Conversion:

$2,100,000 ÷ 14,000,000 shares = .15 MDFI Share Conversion Valuation/Worth



In connection with the conversion, the stockholders mentioned above also received warrants to purchase more than what was earlier PR-ed, but in their filings of an aggregate of 8.4 million, 6.6 million, and 560,000 restricted shares of the Company's common stock at a price of .60 per share. Further details related to these debt conversions above may be found in the Form 8-Ks and other filings filed below:
http://knobias.10kwizard.com/files.php?alld=ON&sym=mdfi&Submit=Go

In Summary:

Now for me, I think the reason they decided to give MDFI the Private Placement deals above was because of them seeing in MDFI what I think we see in MDFI for being very profitable for growth as explained in detail within the post below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42731415

For the amount of money and prices given for the Debt to Equity Conversions and Warrants issued, somebody definitely believes in MDFI and where it is going. The belief was strong enough for millions of dollars to be given to the company in exchange for shares valued at .15 per share. The belief was also strong enough to where they believed that MDFI will be worth some number greater than .60 per share to where executing their options on their Warrants to buy MDFI shares at .60 per share would have been doing so under the premise that .60 per share is considered a discount and not a premium for where it is believed where MDFI will end up at.

Those are some big ”ifs” explained above for MDFI to execute their business objectives, but with having 14 consecutive quarters of Negative Free Cash Flow, I would have to say that they are definitely doing something right and are on their way.

Even if you compensate for the previous Outstanding Shares (OS) amount back then during the times of the Debt to Equity Conversions of 205,771,410 shares to the current OS of 909,670,000 shares, you get a divisor of…

909,670,000 (current OS) ÷ 205,771,410 (old OS) = 4.42

From above…

The MDFI Share Conversion Valuation/Worth from Private Placements = .15

So…

.15 ÷ 4.42 = .0339 per share

So based on the Debt to Equity Valuations, MDFI is fundamentally and logically worth far more than .0339 per share in the eyes of those who valued MDFI to give them the millions of dollars to pay off their $4 million debt. I say far more because those conversation prices were agreed upon because those prices were considered given as a discounted price versus at the premium.

I think it’s just a matter of time as the public is not going to have a choice except to notice MDFI as they begin to release more of their achievements.

v/r
Sterling