IMAGENETIX INC /NV/ - FORM 10-K

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EX-32 - EXHIBIT 32.2 - IMAGENETIX INC /NV/	s101364_ex32-2.htm
EX-32.1 - EXHIBIT 32.1 - IMAGENETIX INC /NV/	s101364_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - IMAGENETIX INC /NV/	s101364_ex31-1.htm
EX-31.2 - EXHIBIT 31.2 - IMAGENETIX INC /NV/	s101364_ex31-2.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

¨ Annual Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934

For the fiscal period ended _____________

x Transition Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934

For the transition period from September 16, 2014 to March 31, 2015

COMMISSION FILE NUMBER 033-24138-D

IMAGENETIX, INC.
(Exact name of registrant as specified in its charter)

NEVADA		87-043772
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

10845 Rancho Bernardo Road, Suite 105
San Diego, California		92127
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (858) 674-8455

Securities registered pursuant to Section 12(b) of the Act: NONE.

Securities registered pursuant to Section 12(g) of the Exchange Act:

COMMON STOCK, $0.001 PAR VALUE PER SHARE.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No x

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 x 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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

Large accelerated filer	¨	Accelerated filer	¨

Non-Accelerated filer	¨	Smaller reporting company	x
(Do not check if a 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 x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $3,757,000

Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date. 28,372,955 issued and outstanding as of June 29, 2015.

DOCUMENTS INCORPORATED BY REFERENCE: None.

Annual Report on Form 10-K
For the Period ended March 31, 2015

TABLE OF CONTENTS

		Page Numbers
PART I		3

ITEM 1.	Business	3

ITEM 1A.	Risk Factors	10

ITEM 1B.	Unresolved Staff Comments	13

ITEM 2.	Properties	13

ITEM 3.	Legal Proceedings	14

ITEM 4.	Reserved	14

PART II		15

ITEM 5.	Market For Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities	15

ITEM 6.	Selected Financial Data	15

ITEM 7.	Management's Discussion And Analysis Of Financial Condition And Results Of Operation	16

ITEM 7A	Quantitative And Qualitative Disclosures About Market Risk	21

ITEM 8.	Financial Statements And Supplementary Data	21

ITEM 9.	Changes In And Disagreements With Accountants On Accounting And Financial Disclosure	21

ITEM 9A.	Controls And Procedures (ITEM 9A(T))	21

ITEM 9B.	Other Information	22

PART III		22

ITEM 10.	Directors, Executive Officers And Corporate Governance	22

ITEM 11.	Executive Compensation	25

ITEM 12.	Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters	27

ITEM 13.	Certain Relationships And Related Transactions, And Director Independence	28

ITEM 14.	Principal Accountant Fees And Services	29

PART IV		30

ITEM 15.	Exhibits and Financial Statement Schedules	30

SIGNATURES

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report on Form 10-K constitute "forward-looking statements". These statements, identified by words such as “plan”, "anticipate", "believe", "estimate", "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Risk Factors" and elsewhere in this Form 10-K. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (“SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K.

As used in this annual report, the terms "we", "us", "our", and “Imagenetix” mean Imagenetix, Inc., unless otherwise indicated.

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

Overview

We were organized as a Nevada corporation in March 1988. Our principal executive offices are located at 10845 Rancho Bernardo Road, Suite 105, San Diego, California 92127, and our telephone number is (858) 674-8455. Our home page can be located on the World Wide Web at http://www.imagenetix.net.

We develop, formulate, license and sell over-the-counter, natural-based nutritional supplements. Our products are proprietary, often supported by scientific studies and are offered through multiple channels of distribution, including licensing, sales to network marketing or multi-level marketing companies, and sales to wholesalers. Our primary product has been Celadrin® a product formulation for joint health. In addition, we recently acquired Periodyne, a periodontal product which will be sold to dentists and hygenists. We also license our intellectual property to third parties.

A key part of our marketing strategy is to provide to our wholesale customers a "turnkey" approach to the marketing and distribution of our products. This turnkey approach provides these customers with all the services necessary to market our products, including developing specific product formulations, providing supporting scientific studies regarding the effectiveness of the product and arranging for the manufacture and marketing of the product.

Our Business

We provide:

Specific product formulations requested by our customers;

Scientific studies to support claims made for our products;

Assistance in complying with U.S. laws and regulations;

Assistance in obtaining foreign country regulatory approval for sale of our products;

Marketing materials and marketing assistance to support product sales; and

Manufacture of products with delivery directly to the customer.

Following development of a new product, and on behalf of our customers, we:

Conduct and complete any scientific studies necessary for regulatory compliance;

Arrange for the manufacture of finished products to our specifications; and

Develop marketing tools and plans to promote product sales, including labels, graphic designs and promotional brochures and providing speakers to promote the products.

Our management and key personnel have many years experience in developing and selling nutritional products to domestic and international marketers, including direct marketers, health food stores and mass market merchandisers.

Our largest customers accounted for 68%, 12% and 11% of our net sales for the period ended March 31, 2015.

Our Strategy

We are a developer, formulator and supplier of natural-based products, designed to enhance human and animal health. We develop and formulate over-the-counter nutritional products marketed globally through multiple channels of distribution. Our strategy involves:

Continuing to develop innovative and proprietary nutritional products;

Continuing to offer "turnkey" services, including product development, regulatory compliance, manufacturing and marketing services, to assist our customers in quickly bringing new products to market;

Licensing our technologies to third parties;

Marketing our products internationally by assisting our customers in registering their products for sale in foreign countries.

Industry Overview

The dietary supplement industry is highly diversified and intensely competitive. It includes companies that manufacture, distribute and sell products that are generally intended to supplement our daily diets with nutrients that may enhance the body's performance and well-being. Dietary supplements include vitamins, minerals, herbs, botanicals, amino acids and compounds. Specific statutory provisions governing the dietary supplement industry were codified in the Dietary Supplement Health and Education Act. This act provides statutory protections for dietary supplements and allows for statements that inform consumers of the effect dietary supplements have upon the structure or functions of the body.

We expect that the following factors will contribute to the ongoing growth of the domestic nutritional supplement industry:

The aging of the American population, which is likely to cause increased consumption of nutritional supplements;

New product introductions in response to new research supporting the positive health effects of certain nutrients;

The nationwide trend toward preventative medicine resulting from rising health care costs;

Increased consumer interest in alternative health products such as herb-based nutritional supplements;

A heightened awareness of the connection between diet and health.

Nutritional supplements are sold primarily through:

Mass market retailers, including mass merchandisers, drug stores, supermarkets and discount stores;

Health food stores;

Mail order companies; and

Direct sales organizations, including network marketing companies.

Products

We offer a variety of specialized proprietary nutritional formulations and over-the-counter topical creams. Since beginning operations in February 1999, we have developed and sold over 90 products and formulations to businesses and organizations that market these products through multiple channels of distribution, including direct selling, sales to mass market retailers, direct response radio, nutritional newsletters and medical care professionals. Our product formulations may be developed by our customers, co-developed by us and our customers or developed exclusively by us for the customer.

Our leading product has been Celadrin®, a nutritional supplement compound comprised of a complex of fatty acid esters which plays a role in human and animal joint health and scientifically supported by our clinical studies. For the period ended March 31, 2015, approximately 99% of our revenue was generated from the sale of various formulations containing Celadrin®. We offer Celadrin® as part of a formulated branded or private label product, as a branded ingredient to be used by our wholesale customers in their own product formulations and as a product available from a licensed third-party source.

A number of safety and efficacy studies have been conducted on Celadrin's® principal composition, cetylated fatty acids. Studies have been presented at international scientific conferences, with two studies having been published in the Journal of Rheumatology and one study published in the Journal of Strength and Conditioning Research. We produce a wide range of formulas using the Celadrin® compounds and market these formulations through multiple distribution channels. Our wholesale customers resell Celadrin® and other formulated products under their own labels and trade names. We do not own or have any ownership interest in the labels or trade names under which these products are sold. Using multiple manufacturing processes to produce Celadrin®, we offer the product to our customers in soft gel capsule, tablet, two-piece capsules and topical cream forms.

We have used paid consultants who are medical doctors, scientific research consultants, independent scientific researchers and laboratories and universities to assist us in the development and testing of our products. We believe Celadrin® will continue to be our principal compound. We intend to expand the number of customers who use this compound in formulas and to develop other formulas for new customers primarily through licensing of our intellectual property.

We have also developed a therapy for the treatment of inflammatory conditions, such as periodontal disease. We have conducted in-vivo and in-vitro animal efficacy and safety studies on our compound for the treatment of gum disease including periodontitis. We are currently conducting human trials using the compound and have generated minimal revenue, approximately 1% of total revenue, from an early introduction of the product. Once trails are completed and an awareness campaign is initiated, we anticipate that this product, Periodyne, will be a major contributor to our product revenue.

Raw Materials and Manufacturing

We develop and formulate proprietary, natural based, nutritional supplements, over-the-counter topical creams and skin care products but do not manufacture any of these products. We currently purchase or provide a license to purchase the ingredients from suppliers for delivery to manufacturers chosen by us. We have had in the past agreements with the sole supplier of Celadrin® to purchase sufficient quantities of the compound to meet our anticipated needs. We believe our relationships with a third-party licensee and the supplier of the raw material to the third-party licensee will continue although we can give no such assurance. All other ingredients can be obtained from a number of suppliers, although the loss of any supplier could adversely affect our business.

We use a number of manufacturers to combine ingredients furnished by our suppliers into our nutritional products. By outsourcing product manufacturing, we eliminate the capital required to manufacture our own products and increase the flexibility of our manufacturing resources. We have written confidentiality and exclusivity agreements with key manufacturers and believe suitable replacement manufacturers are available. However, the loss of a manufacturer could adversely affect our business.

Marketing and Distribution

We market our products to customers in multiple channels of distribution. Our marketing strategy consists of:

Continuing to offer our proprietary products to existing customers while seeking new customers, emphasizing those engaged in the mass marketing of nutraceutical supplements and other nutraceutical products;

Continuing to assist our customers in designing new nutritional, topical, and skin care products using our formulations;

Continuing to design marketing materials and offering other value added services to assist customers in expanding their sales of our product;

Developing and offering new products to direct marketing and mass marketing companies;

Offering products for distribution through medical and nutritional oriented professionals;

Licensing our proprietary intellectual property to third parties;

Offering products for distribution through direct response radio and television.

We will continue to offer our customers a turnkey approach to their product needs. This approach emphasizes providing the customer with the support necessary to allow them to sell our products, including providing the scientific studies required by U.S. and foreign regulators, tailoring our product formulations specifically for each customer, obtaining approvals in foreign countries for our customers to market there, providing full marketing support for the products, including product information, product descriptions and arranging for manufacture and shipment of the products according to customer instructions.

Approximate sales by principal geographic area (as a percentage of sales) for the period ended March 31, 2015 is as follows:

	2015

Domestic sales		88.2	%

Foreign sales:
India		11.8
Total foreign sales		11.8

Total sales		100.0	%

All of our operating assets are located within the United States. While sales to certain geographic areas generally vary from year to year, we do not expect that changes in the geographic composition of sales will have a material adverse effect on operations.

Major Customers

During the period ended March 31, 2015, we had sales to the following customers which represented greater than 10% of our revenue:

	March 31,
	2015

Proprietary Nutritionals, Inc.	$	557,101
Cymbiotics		96,900
Unicity		89,607

While sales to certain customers generally vary from year to year, the loss of one or more of our major customers, unless replaced by similar customers, could have a material adverse effect on our operations and our ability to generate income.

Competition

The nutritional supplement and skin care industries are large and intensely competitive. We compete generally with companies that manufacture and market competitive nutritional products in each of our product lines, including companies such as Twin Labs, Weider Nutrition, IVC Industries and Perrigo. We also compete with companies that supply nutritional products to direct distribution companies, such as Leiner Health, Natural Alternatives and Vitatech. We also compete with companies that develop and sell skin care products, such as West Coast Cosmetics, CA Botana and Cosmetic Products International. Competitive factors in the nutritional supplement and skin care markets include product effectiveness, scientific validation, proprietary formulations, price, quality of products, reliability of product delivery and marketing services offered to customers. We believe we compete favorably with respect to each of these factors. Nevertheless, most of our competitors have longer operating histories, wider product offerings, greater name recognition and financial resources than do we. However, we believe our turnkey approach of offering our customers significant regulatory and marketing support, as well as unique, scientifically validated products, improves our competitive position.

Government Regulation

In both the United States and foreign markets, we are subject to extensive laws and governmental regulations at the federal, state and local levels. For example, we are subject, directly or indirectly, to regulations pertaining to:

Dietary ingredients;

The manufacturing, packaging, labeling, promotion, distribution, importation, sale and storage of our products;

Product claims, labeling and advertising (including direct claims and advertising by us as well as claims in labeling and advertising by others, for which we may be held responsible);

Transfer pricing and similar regulations that affect the level of foreign taxable income and customs duties; and

Taxation, which in some instances may impose an obligation on us to collect taxes and maintain appropriate records.

The dietary ingredients, manufacturing, packaging, storing, labeling, advertising, promotion, distribution and sale of our products are subject to regulation by one or more governmental agencies, including the Food and Drug Administration, the Federal Trade Commission, the Consumer Product Safety Commission, the Department of Agriculture, the Department of Customs, the Patent and Trademark Office, and the Environmental Protection Agency. Our activities are, or may be, regulated by various agencies of the states, localities and foreign countries in which our products are manufactured, distributed and/or sold. The FDA, in particular, regulates the ingredients, manufacture, packaging, storage, labeling, promotion, distribution and sale of foods, dietary supplements and over-the-counter drugs, such as those we distribute. We and our suppliers are required by FDA regulations to meet relevant current good manufacturing practice guidelines for the preparation, packing and storage of foods and drugs. The FDA has also published proposed rules for the establishment of good manufacturing practices for dietary supplements, but it has not yet issued a proposal rule. The FDA conducts unannounced inspections of companies that manufacture, distribute and sell dietary supplements, issues warning letters for rule violations found during these inspections and refers matters to the U.S. Attorney and Justice Department for prosecution under the Federal Food, Drug and Cosmetic Act. There can be no assurance that the FDA will not question our labeling or other operations in the future.

The Dietary Supplement Health and Education Act revised the provisions governing dietary ingredients and labeling of dietary supplements. The legislation created a new statutory class of "dietary supplements." This new class includes vitamins, minerals, herbs, botanicals, and other dietary substances to supplement the daily diet, and concentrates, metabolites, constituents, extracts and combinations thereof. The legislation requires no federal pre-market approval for the sale of dietary ingredients that were on the market before October 15, 1994. Since cetylated fatty acids, the primary ingredient in Celadrin®, were on the market prior to October 15, 1994, we have not been required to provide the FDA with any proof as to safety or efficacy of Celadrin®. Dietary ingredients first marketed after October 15, 1994 may not be distributed or marketed in interstate commerce unless:

The manufacturer has proof that the dietary ingredient has been present in the food supply as an article used for food and in a form in which the food has not been chemically altered, or

The manufacturer supplies the FDA with proof to the FDA's satisfaction of the dietary ingredient's safety.

Manufacturers and distributors of dietary supplements may include statements of nutritional support, including structure and function claims, on labels and in advertising if:

The claims are corroborated by "competent and reliable scientific evidence" consistent with FTC standards for advertising review;

The claims for labels and labeling are filed in a certified notice with the FDA no later than 30 days after first market use of the claims;

The manufacturer retains substantiation that the claims are truthful and non-misleading;

Each claim on labels and in labeling is cross-referenced by an asterisk to a mandatory FDA disclaimer.

The majority of the products marketed, or proposed to be marketed, by us are classified as dietary supplements. In September 1997, the FDA issued regulations governing the labeling and marketing of dietary supplement products. The regulations cover:

The identification of dietary supplements and their nutrition and ingredient labeling;

The terminology to be used for nutrient content claims, health claims and statements of nutritional support, including structure and function claims;

Labeling requirements for dietary supplements for which "high potency" and "antioxidant" claims are made;

Notification procedures for statements of nutritional support, including structure and function claims, on dietary supplement labels and in their labeling;

Pre-market notification procedures for new dietary ingredients in dietary supplements.

Dietary supplements are subject to federal laws dealing with drugs and regulations imposed by the FDA. Those laws regulate, among other things, health claims, ingredient labeling and nutrition content claims characterizing the level of nutrient in the product. They also prohibit the use of any health claim for dietary supplements, unless the health claim is supported by significant scientific agreement and is pre-approved by the FDA. A federal court has ruled that the FDA must authorize health claims presented to the agency in health claims petitions unless they are inherently misleading and must rely on disclaimers to eliminate any potentially misleading connotation conveyed by a claim. The court also held that even claims not supported by significant scientific agreement must be allowed if disclaimers can correct misleading connotations.

Prior to permitting sales of our products in foreign markets, we may be required to obtain an approval, license or certification from the country's ministry of health or comparable agency. The approval process generally would require us to present each product and product ingredient to appropriate regulators and, in some instances, arrange for testing of products by local technicians for ingredient analysis. These approvals may be conditioned on reformulation of our products or may be unavailable with respect to certain products or certain ingredients. We must also comply with product labeling and packaging regulations that vary from country to country.

The Federal Trade Commission, which exercises jurisdiction over the marketing practices and advertising of products similar to those we offer, has in the past several years instituted enforcement actions against several dietary supplement companies for deceptive marketing and advertising practices. These enforcement actions have frequently resulted in consent orders and agreements. In certain instances, these actions have resulted in the imposition of monetary redress requirements. Importantly, the commission requires that "competent and reliable scientific evidence" corroborate each claim of health benefit made in advertising before the advertising is first made. A failure to have that evidence on hand at the time an advertisement is first made violates federal law. While we have not been the subject of an enforcement action for the advertising of our products, there can be no assurance that this agency will not question our advertising or other operations in the future.

We believe we are in compliance with all material government regulations which apply to our products. However, we are unable to predict the nature of any future laws, regulations, interpretations or applications, nor can we predict what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business in the future. These future changes could, however, require the reformulation or elimination of certain products; imposition of additional record keeping and documentation requirements; imposition of new federal reporting and application requirements; modified methods of importing, manufacturing, storing or distributing certain products; and expanded or different labeling and substantiation requirements for certain products and ingredients. Any or all of these requirements could harm our business.

Trademarks and Patents

We received a trademark for "Celadrin" in February 2002.

In April 2009, we were conveyed ownership of U.S. Patent 5,569,676. This patent is a method for alleviating the symptoms of non-rheumatoid arthritis by administering to the afflicted subject a therapeutically effective amount of cetyl myristoleate either orally, topically, or parenterally.

In November 2009 we were issued U.S. Patent 7,612,111. This patent claims a method of treating periodontal disease comprising administering an effective amount of a composition comprising a cetylated fatty acid and a carrier or an excipient to a subject- mammal, human, canine or feline- in need of such treatment selected from a specific group of cetylated acids and administered from a specific group of carriers. There can be no assurance that others may not develop compounds superior to those covered by this patent.

In August 2010 we were issued U.S. Patent 7,776,914. This patent claims a method of treating periodontal disease comprising administering an effective amount of a composition comprising a cetylated fatty acid to a subject- mammal, human, canine or feline- in need of such treatment selected from a specific group of cetylated acids. There can be no assurance that others may not develop compounds superior to those covered by this patent.

Employees

At March 31, 2015, we had 3 full-time and 2 part-time employees, including our executive officers.

ITEM 1A. RISK FACTORS.

You should consider the following discussion of risks as well as other information regarding our common stock. The risks and uncertainties described below are not the only ones. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business could be harmed.

There Is Only One Supplier for Celadrin®. If We Are Unable to Purchase Celadrin® from This Supplier, Our Business Would Be Harmed.

There is only one supplier for the esterified fatty acid compound used in Celadrin®, which is used in all of our products. We will rely upon Celadrin® to expand our product lines and revenue in the future. If the supplier goes out of business or elects for any reason not to supply our third-party licensee with the esterified fatty acid compound, we would have to find another supplier or suffer a significant reduction in our revenue.

We Rely upon a Limited Number of Customers the Loss of Which Would Reduce Our Revenue and Any Earnings.

Our largest customers accounted for 68%, 12% and 11% of our net sales for the period ended March 31, 2015. The loss of any of these customers could significantly reduce our revenue and adversely affect our cash flow and earnings, if any.

We Have a Licensing Model to Generate Revenue Which Could Impact Our Revenue and Profitability.

Our business model changed from exclusively selling products directly to wholesalers, retailers, and customers to additionally licensing the sale of our products to third parties. This business model requires the third parties to commit to such an agreement and to successfully sell products with our technologies. If third-party licensees are not successful at generating revenue, our licensing revenue, cash flow and earnings, if any, could be adversely affected.

We Rely upon Other Outside Suppliers to Produce Our Products Which Could Delay Our Product Deliveries.

All of our products are produced by outside manufacturers who process ingredients provided to them by our suppliers and with whom we have contracts. Our profit margins and our ability to deliver products on a timely basis are dependent upon these manufacturers and suppliers. Should any of these manufacturers or suppliers fail to provide us with product, we would be required to obtain new manufacturers and suppliers, which would be costly and time consuming and could delay our product deliveries.

Product Liability Claims Against Us Could Be Costly.

Some of our nutritional supplements contain newly-introduced ingredients or combinations of ingredients, and we have little long-term health information about individuals consuming those ingredients. If any of these products were thought or proved to be harmful, we could be subject to litigation. Although we carry product liability insurance in the face amount of $1,000,000 per occurrence and $2,000,000 in the aggregate and require our suppliers and manufacturers to include us as insured parties on their product liability insurance policies, our coverage may not be adequate to protect us from potential product liability claims and costs of defense.

We Are Subject to Intense Competition from Other Nutritional Supplement Marketers Which Could Reduce Our Revenue and Profit Margins.

Competition in the nutritional supplement market is intense. We compete with numerous companies that have longer operating histories, more products and greater name recognition and financial resources than we do. In order to compete, we could be forced to lower our product prices, which would reduce our revenue and profit margins.

We Are Highly Regulated, Which Increases Our Costs of Doing Business.

We are subject to laws and regulations which cover:

the formulation, manufacturing, packaging, labeling, distribution, importation, sale and storage of our products;

the health and safety of food and drugs;

trade practice and direct selling laws; and

product claims and advertising by us; or for which we may be held responsible.

Compliance with these laws and regulations is time consuming and expensive. Moreover, new regulations could be adopted that would severely restrict the products we sell or our ability to continue our business. We are unable to predict the nature of any future laws, regulations, interpretations or applications, nor can we predict what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business in the future. These future changes could, however, require the reformulation or elimination of certain products; imposition of additional record keeping and documentation requirements; imposition of new federal reporting and application requirements; modified methods of importing, manufacturing, storing or distributing certain products; and expanded or different labeling and substantiation requirements for certain products and ingredients. Any or all of these requirements could harm our business.

There Are Limitations on the Liability of Our Officers and Directors Which May Restrict Our Stockholders from Bringing Claims.

Our Bylaws substantially limit the liability of our officers and directors to us and our stockholders for negligence and breach of fiduciary or other duties to us. This limitation may prevent stockholders from bringing claims against our officers and directors in the future.

Shares of Our Common Stock Which Are Eligible for Sale by Our Stockholders May Decrease the Price of Our Common Stock.

As of March 31, 2015, we have 28,272,955 common shares outstanding which are freely tradable or saleable under Rule 144. We also have outstanding common stock warrants exercisable into up to 8,409,334 shares of common stock which could become free trading if exercised. If our stockholders sell substantial amounts of our common stock, the market price of our common stock could decrease.

There is a Limited but Potentially Volatile Trading Market in Our Common Stock, Which May Adversely Affect Our Stock Price.

Our common stock trades on the Electronic Bulletin Board. The Bulletin Board tends to be highly illiquid, in part because there is no national quotation system by which potential investors can track the market price of shares except through information received or generated by a limited number of broker-dealers that make a market in particular stocks. There is a greater chance of market volatility for securities that trade on the Bulletin Board as opposed to a national exchange or quotation system. This volatility may be caused by a variety of factors, including:

The lack of readily available price quotations;

The absence of consistent administrative supervision of "bid" and "ask" quotations;

Lower trading volume; and

Market conditions.

There could be wide fluctuations in the market price of our common stock. These fluctuations may have an extremely negative effect on the market price of our securities and may prevent an investor from obtaining a market price equal to his purchase price when he attempts to sell our securities in the open market. In these situations, the investor may be required to either sell our securities at a market price which is lower than his purchase price, or to hold our securities for a longer period of time than he planned.

Because Our Common Stock Is Classified as "Penny Stock," Trading in it Could Be Limited, and Our Stock Price Could Decline.

Our common stock falls under the definition of "penny stock" since our net tangible assets are below $2,500,000. As a result, trading in our common stock can be limited because broker-dealers are required to provide their customers with disclosure documents prior to allowing them to participate in transactions involving our common stock. These disclosure requirements are burdensome to broker-dealers and may discourage them from allowing their customers to participate in transactions involving our common stock.

"Penny stocks" are equity securities with a market price below $5.00 per share, other than a security that is registered on a national exchange or included for quotation on the NASDAQ system, unless the issuer has net tangible assets of more than $2,000,000 and has been in continuous operation for greater than three years. Issuers who have been in operation for less than three years must have net tangible assets of at least $5,000,000.

Rules promulgated by the Securities and Exchange Commission under Section 15(g) of the Exchange Act require broker-dealers engaging in transactions in penny stocks, to first provide to their customers a series of disclosures and documents, including:

A standardized risk disclosure document identifying the risks inherent in investment in penny stocks;

All compensation received by the broker-dealer in connection with the transaction;

Current quotation prices and other relevant market data; and

Monthly account statements reflecting the fair market value of the securities. In addition, these rules require that a broker-dealer obtain financial and other information from a customer, determine that transactions in penny stocks are suitable for such customer and deliver a written statement to such customer setting forth the basis for this determination.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None

ITEM 2. PROPERTIES.

We conduct our corporate functions and manufacturing, product development, sales and marketing activities in San Diego, California. We rent 5,426 square feet of office space at 10845 Rancho Bernardo Road, Suite 105, San Diego, California 92127 under a three-year lease ending December 2015 for a monthly rent of $8,139. In addition we rent 4,575 square feet of distribution and storage space at 1420 Decision Street, Suite B, Vista, California 92083 under a month to month lease at a monthly rent of $2,049. This space is intended to meet our needs for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS.

Emergence from Bankruptcy

Imagenetix filed for protection under the United States Bankruptcy Code on December 12, 2012. During the period of time from December 12, 2012 to September 16, 2014 (the effective date of the Company’s Plan of Reorganization), the Company filed with the SEC on Form 8Ks portions of its Monthly Operating Reports as filed with the Bankruptcy Court.

The Company’s Plan of Reorganization was approved by the Court on September 10, 2014 with an effective date of September 16, 2014. The Plan of Reorganization included an issuance of common stock and warrants for cash, the acquisition of Periodyne, the issuance of common stock to pay professional fees incurred during the proceeding and a compromise to the claims of TriPharma and the unsecured creditors.

As a result of the issuance of common stock, the Company was eligible to adopt “fresh-start reporting” which enabled the Company to reduce its previous accumulated deficit to zero as of the effective date of the Plan of Reorganization. The accompanying financial statements reflect this election and, accordingly, the financial statements are for the period of September 16, 2014 through March 31, 2015 and do not reflect comparative statements for any prior accounting periods. A reconciliation of the “fresh-start reporting” is included in Note 3.

We will continue to report to the Bankruptcy Court until all claims are satisfied and we file a motion to conclude the case.

Frutarom Suit

On November 21, 2012, Imagenetix filed a legal action in the United States Southern District of California, case number 12CV2823 GPC WMC against Frutarom USA, Inc. Imagenetix claims that the defendant is liable for unspecified damages related to a breach of contract, intentional and negligent misrepresentations, fraud and violation of a business and professional code as a result of sales of BLIS K12 from the defendant to Imagenetix.

Currently, the sale of BLIS K12 is under review by the Federal Drug Administration. After the review, the Federal Judge will resume the case.

Robinson Suit

On October 27, 2014, Imagenetix filed a legal action in the United States Southern District of California, case number 14-cv-02557-BEN-KSC which was subsequently moved to the United States Central District of California, case number 15-cv-00599-JLS-RNB, against Robinson Pharma Inc., Et. Al. Imagenetix claims that the defendants infringed on its U.S. Patent No. 5,596,676 entitled “Method for the Treatment of Osteoarthritis” and seeks an undetermined amount of damages.

ITEM 4. RESERVED.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our Common Stock is traded in the over-the-counter market and is quoted on the OTC Bulletin Board system maintained by the Financial Industry Regulatory Authority (FINRA). Prices reported represent prices between dealers, do not include markups, markdowns or commissions and do not necessarily represent actual transactions. The market for our shares has been sporadic and at times very limited.

The following table sets forth the high and low closing price for the Common Stock for the period ended March 31, 2015:

	Closing Price
	High		Low

Period Ended March 31, 2015
September 16-30, 2014	$	0.38	$	0.33
Third Quarter	$	0.47	$	0.23
Fourth Quarter	$	0.45	$	0.16

We had approximately 300 shareholders of record as of June 29, 2015. Because most of our common stock is held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners represented by these record holders. We have never paid a cash dividend on our common stock and do not expect to pay one in the foreseeable future.

Recent Sale of Unregistered Securities

During the quarter ended March 31, 2015 we issued the following equity securities:

Common Stock

Date Stock

Price per

Issued

Number of Shares

Consideration

November 12, 2014

100,000

0.30

Services

With respect to the above equity security issuance, the Company relied on exemptions provided by Sections 4(a)(2) and 3(a)9 of the Securities Act of 1933, as amended (the “Securities Act”). No advertising or general solicitation was employed in offering the securities. The securities were issued to a limited number of persons all of whom were accredited investors as that term is defined in Rule 501 of Regulation D under the Securities Act. All were capable of analyzing the merits and risks of their investment, acknowledged in writing that they were acquiring the securities for investment and not with a view toward distribution or resale, and understood the speculative nature of their investment. All securities issued contained a restrictive legend prohibiting transfer of the shares except in accordance with federal securities laws.

ITEM 6. SELECTED FINANCIAL DATA.

Not Applicable

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

Overview

We develop, formulate, license and sell over-the-counter, natural-based nutritional supplements. Our products are proprietary, often supported by scientific studies and are offered through multiple channels of distribution, including licensing, sales to network marketing or multi-level marketing companies, and sales to wholesalers. Our primary product has been Celadrin® a product formulation for joint health. In addition, we recently reacquired the distribution rights to Periodyne, a periodontal product which will be sold to dentists and hygenists. We also license our intellectual property to third parties.

Management's discussion and analysis of results of operations and financial condition are based upon the Company's financial statements. These statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles require management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Critical Accounting Policies and Estimates

We have identified eight accounting principles that we believe are key to an understanding of our financial statements. These important accounting policies require management's most difficult, subjective judgments.

1. Fresh-Start Reporting

As a result of the issuance of common stock during its emergence from a bankruptcy proceeding, the Company was eligible to adopt “fresh-start reporting” which enables the Company to reduce its previous accumulated deficit to zero as of the effective date of the Plan of Reorganization. A reconciliation of the “fresh-start reporting” is included in Note 3 to these financial statements.

2. Cash and Cash Equivalents

For purposes of the financial statements, we consider all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.

3. Accounts receivable

Accounts receivable are carried at the expected net realizable value. The allowance for doubtful accounts is based on management’s assessment of the collectability of specific customer accounts and the aging of the accounts receivable. If there were a deterioration of a major customer’s creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of amounts due to us could be overstated, which could have a negative impact on operations.

4. Inventory

Inventory is carried at the lower of cost or market. Cost is determined by the first-in first-out method. Indirect overhead costs are allocated to inventory.

5. Property and Equipment and Goodwill

Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized, upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed over the estimated useful life of three to seven years, except leasehold improvements which are depreciated over the lesser of the remaining lease life or the life of the asset, using the straight-line method. We follow the provisions of the Financial Accounting Standards Board Accounting Standards Codification ("ASC") No. 360. Under ASC No. 360, long-lived assets and certain identifiable intangibles to be held and used by us are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We continuously evaluate the recoverability of our long-lived assets based on estimated future cash flows and the estimated fair value of such long-lived assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived asset.

6. Trademarks and Patents

Patents and trademarks are carried at cost less accumulated amortization and are amortized over their estimated useful lives of from 8 to 17 years for patents and 17 years for trademarks. The carrying value of patents and trademarks is periodically reviewed and impairments, if any, are recognized when the expected future benefit to be derived from individual intangible assets is less than its carrying value determined based on the provisions of ASC No. 360 as discussed above.

7. Revenue Recognition

We recognize revenue in accordance with the SEC’s Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements” (SAB104) and ASC No. 605. SAB 104 requires that four basic criteria be met before revenue can be recognized: 1) there is evidence that an arrangement exists; 2) delivery has occurred; 3) the fee is fixed or determinable; and 4) collectability is reasonably assured. ASC No. 605 states that revenue from sales transactions where the buyer has the right to return the product shall be recognized at the time of sale only if (1) the seller’s price to the buyer is substantially fixed or determinable at the date of sale; (2) the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product; (3) the buyer’s obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product; (4) the buyer acquiring the product for resale has economic substance apart from that provided by the seller; (5) the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer; and (6) the amount of future returns can be reasonably estimated. We recognize revenue upon determination that all criteria for revenue recognition have been met. The criteria are usually met at the time title passes to the customer, which usually occurs upon shipment. Revenue from shipments where title passes upon delivery is deferred until the shipment has been delivered.

As part of the services we provide to our private label contract manufacturing customers, we may perform, but are not required to perform, certain research and development activities related to the development or improvement of their products. While our customers typically do not pay directly for this service, the cost of this service is included as a component of the price we charge to manufacture and deliver their products.

Royalties- we recognize revenue from royalties based on quarterly minimums recorded at each quarter end and reports provided by our customers (typically 30 days after the end of the quarter on which the royalty payment is based.)

Licensing- we also derive license revenue from fees for the transfer of proven and reusable intellectual property components. Generally, these payments will include a nonrefundable technology license fee, which will be payable upon the transfer of intellectual property. License fees will be recognized upon the execution of the license agreement and transfer of intellectual property provided no further significant performance obligations exist and collectability is deemed probable. If additional performance obligations are present, we defer revenue recognition until such time as the performance obligation is satisfied.

8. Income Taxes

We account for income taxes in accordance with ASC No. 740. This statement requires an asset and liability approach for accounting for income taxes and prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC No. 740 states that a tax benefit from an uncertain position may be recognized if it is "more likely than not" that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information.

Selected Financial Information

Results of Operations

	Period
	Ended
	3/31/2015

Net sales	$	824,499
Cost of goods sold		152,568
% of net sales		18.5	%
Gross profit		671,931
% of net sales		81.5	%

Operating expenses
Selling, general and administrative		240,681
Payroll expense		328,992
Consulting expense		87,913
Total operating expenses		657,586

Other expense		(36,057	)

Net income before taxes		(21,712	)
Income taxes		-
Net loss	$	(21,712	)

Net Sales

Net sales for the period ended March 31, 2015 was $824,499 and was derived primarily from license income. We anticipate that in future periods revenue will increase as a result of our acquiring Periodyne and increased sales of our products post-bankruptcy.

Cost of Goods Sold

Cost of goods sold as a percentage of net sales was 18.5% for the period ended March 31, 2015. We anticipate that in future periods cost of goods sold will increase as a result of our acquiring Periodyne and increased sales of our products post-bankruptcy.

Selling, General and Administrative

Selling, general and administrative expenses were $240,681 for the period ended March 31, 2015. We anticipate selling, general and administrative expenses will increase as a result of our acquiring Periodyne and increased sales of our products post-bankruptcy.

Payroll Expense

Payroll expense was $328,992 for the period ended March 31, 2015. We anticipate that payroll expenses will increase in future periods as a result of our acquiring Periodyne and increased sales of our products post-bankruptcy.

Consulting Expense

Consulting expense was $87,913 for the period ended March 31, 2015. We anticipate an increase in consulting expense in future periods as a result of our acquiring Periodyne and increased sales of our products post-bankruptcy.

Other Expense

Other expense was $36,057 for the period ended March 31, 2015 and was comprised primarily of continuing legal fees related to the bankruptcy proceeding of approximately $107,000 and interest expense of approximately $5,000 offset by discharged debt obligations of approximately $76,000.

Liquidity and Capital Resources

Working Capital
							Increase
	3/31/15			9/16/14			(Decrease)

Current assets	$	587,582		$	1,727,150		$	(1,139,568	)
Current liabilities		855,263			1,807,051			(951,788	)
Working capital	$	(267,681	)	$	(79,901	)	$	(187,780	)

Long-term debt	$	1,650,000		$	1,850,000		$	(200,000	)

Stockholders' equity	$	6,332,637		$	6,324,349		$	8,288

Statements of Cash Flows Select Information

	Period Ended
	3/31/15
Net cash provided by (used in):
Operating activities	$	538,784
Investing activities	$	-
Financing activities	$	(713,249	)

Balance Sheet Select Information

					Increase
	3/31/15		9/16/14		(Decrease)

Cash	$	63,444	$	1,493,709	$	(1,430,265	)

Accounts receivable, net	$	335,617	$	160,802	$	174,815

Inventories, net	$	120,470	$	48,740	$	71,730

Secured note payable	$	-	$	726,250	$	(726,250	)

Accounts payable and accrued expenses	$	333,762	$	522,551	$	(188,789	)

The Company has historically financed our operations internally and through debt and equity financings. At March 31, 2015, we had cash holdings of $63,444, a decrease of $1,430,265 compared to September 16, 2014, the date on which we emerged from the Bankruptcy proceeding. Our net working capital at March 31, 2015, was a deficit of $267,681 compared to a deficit of $79,901 as of September 16, 2014. The reduction in cash and working capital is primarily the result of distributions to creditors under the Bankruptcy Plan of Reorganization during the current period. The Company may incur unknown expenses or may not be able to meet its revenue forecast, and one or more of these circumstances would require the Company to seek additional capital. The Company may not be able to obtain equity capital or debt funding on terms that are acceptable. Even if the Company receives additional funding, such proceeds may not be sufficient to allow the Company to sustain operations until it becomes profitable and begins to generate positive cash flows from operations. This raises substantial doubt about the Company’s ability to continue as a going concern.

New Accounting Pronouncements

A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, management has not determined whether implementation of such proposed standards would be material to the Company’s consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements required by this item begin on page F-1 with the index to consolidated financial statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None

ITEM 9A(T). CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our chief executive officer and our chief financial officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on their evaluation, they concluded that our disclosure controls and procedures were effective as of March 31, 2015, the end of the period covered by this annual report.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act, as amended, as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by a company’s board of directors, management and other personnel 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. Our internal control over financial reporting includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. In order to evaluate the effectiveness of our internal control over financial reporting as of March 31, 2015, as required by Sections 404 of the Sarbanes-Oxley Act of 2002, our management commenced an assessment, based on the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “ COSO Framework “). A material weakness is a control deficiency, or a combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Based on their evaluation, the Chief Executive and Chief Financial Officers concluded that our internal controls over financial reporting were effective as of March 31, 2015, the end of the period covered by this annual report.

Management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our internal controls were not subject to attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fourth quarter of fiscal 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The following table and biographical summaries set forth information, including principal occupations and business experience, about our directors and the executive officers at March 31, 2015:

Name	Age	Position	Director/Officer Since
William P. Spencer	62	Chief Executive Officer, President and Director	January, 1999
William A. Toomey	76	Director	April, 2011
Anthony Wayne Opperman	65	Director	June, 2015
George Georgaklis	60	Director	June, 2015
Robert E.Dennis	72	Director	June, 2015
Debra L. Spencer	63	Secretary	March, 1999
Lowell W. Giffhorn	68	Chief Financial Officer	July, 2005

Biographical Information

William P. Spencer has served as a director and has been our president since January 1999. From January 1986 to December 1996 he served as chief operating officer, chief financial officer and executive vice-president of Natural Alternatives International, Inc., a company engaged in the formulation and production of encapsulated vitamins and nutrients. He was president of NAI from December 1996 to October 1998 and was a director from January 1986 to October 1998. From 1976 to 1988 he was a regional vice president for San Diego Trust and Savings Bank. Mr. Spencer earned a B.S. degree in finance and an MBA degree from San Diego State University. Mr. Spencer’s long history with the nutraceutical industry and his long history as our chief executive officer make his participation on our board very valuable in all aspects of our operations and board.

William A. Toomey joined our board in 2011. Mr. Toomey has used global influence as a world class athlete and leader of the International Olympic movement to benefit many. He was the 1968 Olympic gold medalist in the decathlon, a past Sullivan Award winner (top USA athlete), ABC Athlete of the Year, and the Associated Press Amateur and Professional Athlete of the Year. He is a past president of the International Olympic Committee’s Alumni Association; was a Presidential advisor to the Peace Corps and a member of Gerald Ford’s Presidential Commission on Olympic Sport. He received a Master’s Degree from Stanford University and currently lectures at the University of California Davis. Mr. Toomey’s long career as a marketing executive in sports health and fitness provides particular value to our board.

Anthony Wayne Opperman joined our board in June, 2015. Since 1997, Mr. Opperman has been a consultant and investor in a variety of ventures and has served as an advisor to Periodyne since September 2014. Mr. Opperman was President of American Surface Mounted Devices, a fully automated PCB contract manufacturer, from 1994 to 1997 and Operations Director for American Technology Corporation, a publicly traded consumer products design and manufacturer, from 1991 to 1994. Previously Mr. Opperman held manufacturing and operations positions with Science Applications International Corporation, Centro Corporation and AO Electrical Manufacturing. Mr. Opperman’s previous operations experience brings value to our board.

George C. Georgaklis joined our board in June, 2015. Dr. Georgaklis is a board certified dentist who has been in practice for over 30 years practicing in the areas of general dentistry, orthodontics, cosmetic, oral surgery, implants and TMJ/TMD dysfunction. Dr. Georgaklis has also been an expert witness in a variety of legal issues and a commentator on dental issues for a variety of media outlets. Dr. Georgaklis graduated from the University of Vermont in 1976 with a B.A. and Tufts University School of Dental Medicine in 1980 with a D.M.D. Dr. Georgaklis’s extensive background in all phases of dentistry will provide value to our board in the development and marketing of Periodyne.

Robert E. Dennis joined our board in June, 2015. Since 1998, Mr. Dennis has been a principal in the accounting firm of Dennis and Dennis, LLP, a Public Accounting Oversight Board Registered firm. Previously, Mr. Dennis held various management level positions including CFO for Capital Guaranty Corp., a publicly traded municipal bond guaranty insurance company, COO and CFO for Motor Club of America, a publicly traded insurance and financial services company, President of Yegan Seafood’s, a restaurant chain and auditor for Deloitte & Touche. Mr. Dennis received a B.S. with a major in accounting in 1966 from The Ohio State University. Mr. Dennis is an audit committee financial expert as defined in item 401 of Regulation S-B promulgated by the Securities and Exchange Commission based on his service as a chief financial officer of public companies, his present and prior practice as a certified public accountant and his degree in accounting and business administration.

Debra L. Spencer has served as a director from March 1999 to April 2011 and served as our treasurer from March 1999 to July 2005. She continues to serve as our corporate secretary a position she has held since March 1999. Her responsibilities also include product label copy and graphic design in compliance with FDA regulations as well as developing marketing materials for our private label products. From 1970 to 1981 she was an Executive Assistant to the Vice President of a local San Diego bank. From 1987 to 1993 she served as vice president, secretary and treasurer for Vitamin Direct, Inc., a consumer mail order vitamin company.

Lowell W. Giffhorn has served as our Chief Financial Officer since July 2005. Since October 2005, Mr. Giffhorn also has served as the Chief Financial Officer and, since December 2005, has served on the board of directors of Brendan Technologies, Inc., a company that provides computer software to the pharmaceutical and life science industries. Since September 2013, Mr. Giffhorn also serves as the Chief Financial Officer of SpectraScience, Inc., a publicly traded medical device company. From November 1996 to June 2005, Mr. Giffhorn was the Chief Financial Officer of Patriot Scientific Corp., a publicly held semiconductor and intellectual property company. From June 1992 to August 1996 and from September 1987 to June 1990 he was the CFO of Sym-Tek Systems, Inc. and Vice President of Finance for its successor, Sym-Tek Inc., a supplier of capital equipment to the semiconductor industry. Mr. Giffhorn obtained a M.B.A. degree from National University in 1976 and he obtained a B.S. in Accountancy from the University of Illinois in 1969. Mr. Giffhorn devotes approximately 50% of his time to our affairs.

William P. Spencer and Debra L. Spencer are married to each other.

Committees of the Board of Directors

Audit Committee. The Audit Committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditors and any outside advisors engagement by the audit committee.

Compensation Committee. The Compensation Committee was formed to review and recommend to the Board the salaries, bonuses and perquisites of our executive officers. The Compensation Committee also will review and recommend to the Board any new compensation or retirement plans. The Compensation Committee will also review and approve corporate goals and objectives relevant to the compensation of our executive officers and evaluate their performance in light of these goals and objectives. A Compensation Committee charter will be recommended by the Compensation Committee and approved by the Board.

Code of Ethics

Imagenetix has set forth its policy on ethical behavior in a document called "Code of Business Conduct and Ethics." This policy applies to the members of our Board of Directors and all employees, including (but not limited to) our principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions. This policy comprises written standards that are reasonably designed to deter wrongdoing and to promote the behavior described in Item 406 of Regulation S-K promulgated by the Securities and Exchange Commission. No waivers of the Code were granted in 2015.

Compliance with Section 16(a) of the Securities Exchange Act

Due to our status as a Section 15(d) reporting company, our executive officers, directors, and persons who beneficially own more than 10% of a registered class of our equity securities are not required to file with the SEC reports of ownership and changes in ownership of Imagenetix's equity securities pursuant to Section 16(a) of the Securities Exchange Act of 1934.

ITEM 11. EXECUTIVE COMPENSATION.

There is shown below information concerning the compensation of our principal executive officer and the most highly compensated executive officers whose total compensation exceeded $100,000 (each a “Named Officer”) for the period ended March 31, 2015.

SUMMARY COMPENSATION TABLE

Name and	Fiscal					Option		All Other
Principal Position	Year	Salary ($)		Bonus ($)		Awards ($)		Compensation ($)		Total ($)
[a]	[b]	[c]		[d]		[f]		[i]		[j]
William P. Spencer	2015	$	105,730	$	-	$	189,000	$	-	$	294,730
President, CEO and Director

Debra L. Spencer	2015	$	46,679	$	-	$	93,960	$	-	$	140,639
Secretary

Lowell W. Giffhorn	2015	$	64,615	$	-	$	129,600	$	-	$	194,215
Chief Finacial Officer

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Number

Securities

Underlying

Intrinsic

Unexercised

Option

Value at

Options

Exercise

Option

March 31,

(#)

Price

Expiration

2015

Name

Exercisable

Unexercisable

($)

Date

($)

[a]

[b]

[c]

[e]

[f]

William P. Spencer

525,000

0.10

September 16, 2019

63,000

President, CEO and

Director

Debra L. Spencer

261,000

0.10

September 16, 2019

31,320

Secretary

Lowell W. Giffhorn

360,000

0.10

September 16, 2019

43,200

Chief Financial Officer

Employment Contracts

Effective as of August 7, 2009, we entered into employment agreements with Mr. and Mrs. Spencer and Mr. Giffhorn to serve as our President and Chief Executive Officer, Secretary, and Chief Financial Officer, respectively (the Employees). These employment agreements have 24 month terms with automatic 24 month renewals. The employment agreements provide that the Employees may voluntarily terminate their employment with a thirty day written notice to us. The employment agreements also provide that if the Employees are involuntarily terminated (excluding for cause), we will pay the Employees twenty-four months’ salary as severance pay.

The employment agreements contain change of control provisions that provide severance pay and other benefits in the event of a change of control. The Agreements provide for severance payments of three times the executive’s annual base salary in the event the executive’s employment is terminated, either voluntarily with “good reason” or involuntarily, during the one-year period following a change in control. Severance payments to the Employees under the change of control provisions would be in lieu of any severance otherwise due them under their employment agreements discussed above.

DIRECTOR COMPENSATION

The Company's outside non-employee director receives cash compensation, for service as a board member. Directors are reimbursed for all expenses incurred by them in attending board meetings. Non-employee directors also receive warrants for their service as board members, with warrant grants awarded periodically, but not annually, as determined by the board of directors. Employee directors receive compensation as employees and not for service as directors.

The following information outlines the compensation paid to our non-employee director, including annual base retainer fees and warrant awards for the fiscal period ended March 31, 2015:

We provided director compensation for our outside directors as follows:

Fees

Earned

Paid In

Warrant

Cash

Awards

Total

Name

($)

[a]

[b]

(d)

[h]

William Toomey

13,680

Board representation= $6,000 per year

Audit committee chair= additional $6,000 per year

Compensation committee chair = additional $3,000 per year

Initial board acceptance= $6,000

Warrant Grants. Warrants were granted on the emergence from the Bankruptcy proceeding.

Mr. Opperman, Dr. Georgaklis and Mr. Dennis were appointed to the board of directors on June 12, 2015.

Liability and Indemnification of Officers and Directors

Our Articles of Incorporation provides that our directors will not be liable for monetary damages for breach of their fiduciary duty as directors, other than the liability of a director for:

A breach of the director’s duty of loyalty to our company or our stockholders;

Acts or omissions by the director not in good faith or which involve intentional misconduct or a knowing violation of law;

Willful or negligent declaration of an unlawful dividend, stock purchase or redemption; or

Transactions from which the director derived an improper personal benefit.

Our Articles of Incorporation require us to indemnify all persons whom we may indemnify pursuant to Nevada law to the full extent permitted by Nevada law.

Our bylaws require us to indemnify our officers and directors and other persons against expenses, judgments, fines and amounts incurred or paid in settlement in connection with civil or criminal claims, actions, suits or proceedings against such persons by reason of serving or having served as officers, directors, or in other capacities, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interests and, in a criminal action or proceeding, if he had no reasonable cause to believe that his/her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of no contest or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to our best interests or that he or she had reasonable cause to believe his or her conduct was unlawful. Indemnification as provided in our bylaws shall be made only as authorized in a specific case and upon a determination that the person met the applicable standards of conduct. Insofar as the limitation of, or indemnification for, liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling us pursuant to the foregoing, or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such limitation or indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information concerning our common stock ownership as of June 29, 2015, by (1) each person who is known by us to be the beneficial owner of more than five percent of our common stock; (2) each of our executive officers and directors; and (3) all of our directors and executive officers as a group. The address of each such stockholder is in care of us at 10845 Rancho Bernardo Road, Suite 105, San Diego, California 92127.

	Amount of Benefical		Percent of
Name of Beneficial Owner	Ownership (1)(2)		Ownership

William P.and Debra L. Spencer (3)		786,000		2.7	%
William Toomey (4)		38,000		*
Lowell W. Giffhorn (5)		361,700		1.3	%
A. Wayne & Barbara Opperman (6)		5,000,000		17.1	%
Victor Gabourel (7)		2,345,834		8.1	%
James & Josephine Zolin (8)		3,713,334		13.1	%
Kim Vanderlinden (9)		5,483,333		18.3	%
George Georgeklis (10)		3,250,000		11.1	%
Karla Rosewell		2,705,000		9.6	%

All officers and directors as a group (7 persons) (11)		9,435,700		30.0	%

Represents less than 1%

(1)

Reflects amounts as to which the beneficial owner has sole voting power and sole investment power.

(2)

Includes common stock purchase warrants exercisable within 60 days from the date hereof.

(3)

Comprised of 786,000 common stock purchase warrants. William P. and Debra Spencer are husband and wife and are deemed to share beneficial ownership of these shares and options.

(4)

Comprised of 38,000 common stock purchase warrants.

(5)

Comprised of 1,700 shares and 360,000 common stock purchase warrants.

(6)

Comprised of 4,000,000 shares and 1,000,000 common stock purchase warrants over which Mr. and Ms. Opperman have shared voting power. Mr. and Ms. Opperman are husband and wife.

(7)

Comprised of 1,745,834 shares and 600,000 common stock purchase warrants.

(8)

Comprised of 3,633,334 shares and 80,000 common stock purchase warrants over which Mr. and Ms. Zolin have shared voting power. Mr. and Ms. Zolin are brother and sister.

(9)

Comprised of 3,783,333 shares and 1,700,000 common stock purchase warrants.

(10)

Comprised of 2,250,000 shares and 1,000,000 common stock purchase warrants.

(11)

Comprised of 6,251,700 shares and 3,184,000 common stock purchase warrants.

Equity Compensation Plan Information

Number of securities

remaining available

Number of securities

for issuance under

to be issued upon

Weighted average

equity compensaton

exercise of

exercise price of

plans (excluding

outstanding options,

securities reflected in

warrants and rights

column (a))

Plan Category

(a)

(b)

(c)

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

1,481,000

0.10

Total

1,481,000

0.10

Common shares issuable on the exercise of common stock warrants have not been approved by the security holders and, accordingly, have been segregated in the above table.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

In September 2014, as part of the Plan of Reorganization, we acquired Periodyne from Kim Vanderlinden, the sole owner of Periodyne LLC, in exchange for the issuance of 3,400,000 common shares of stock and a warrant exercisable into up to 1,700,000 shares of common stock. The common shares were valued at $1,258,000 and the warrant was valued at $594,952, which amounts were recognized on the records of the predecessor entity under reorganization adjustments.

We believe that the above transactions were fair, reasonable and upon terms at least as favorable to us as those we might have obtained from unaffiliated third parties.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following is a summary of the fees billed to Imagenetix by its principal accountants for the fiscal year ended March 31, 2015:

Audit fees. Consists of fees for professional services rendered by our principal accountants for the audit of our annual financial statements and the review of financial statements included in our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.

Audit-related fees. Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "Audit fees."

Tax fees. Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.

	HJ Associates &
	Consultants LLP
Fee category	2015

Audit fees	$	57,000

Audit-related fees	$	-

Tax fees	$	2,000

All other fees	$	-

Total fees	$	59,000

All other fees. Consists of fees for products and services provided by our principal accountants, other than the services reported under "Audit fees," "Audit-related fees" and "Tax fees" above. The fees disclosed in this category include due diligence, preparation of pro forma financial statements as a discussion piece for a Board member, and preparation of letters in connection with the filing of Current Reports on Form 8-K.

Pre-Approval Policies and Procedures

All services provided by our independent registered public accounting firm, HJ Associates & Consultants LLP (“HJ”), are subject to pre-approval by our Audit Committee. The Audit Committee has authorized each of its members to approve services by HJ in the event there is a need for such approval prior to the next full Audit Committee meeting. The Audit Committee has also adopted policies and procedures that are detailed as to the particular service and that do not include delegation of the Audit Committee’s responsibilities to management under which management may engage HJ to render audit or non-audit services. Any interim approval given by an Audit Committee member and any such engagement by management must be reported to the Audit Committee no later than its next scheduled meeting. Before granting any approval, the Audit Committee (or a committee member if applicable) gives due consideration to whether approval of the proposed service will have a detrimental impact on HJ’s independence. The full Audit Committee pre-approved all services provided by HJ in fiscal 2015.

Based upon the Audit Committee's discussion with management and the independent auditors and the Audit Committee review of the representations of management and the report of the independent accountants to the Audit Committee, the Audit Committee recommended that the Board of Directors include our audited financial statements in our Annual Report on Form 10-K for the period ended March 31, 2015 filed with the Securities and Exchange Commission.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)

The following documents are filed as a part of this Report:

1.	Financial Statements. The following consolidated financial statements and Report of Independent Registered Certified Public Accounting Firm are included in Part II of this Report:

	Report of HJ Associates & Consultants LLP, Independent Registered Public Accounting Firm

	Consolidated Balance Sheets- As of March 31, 2015 and September 16, 2014

	Consolidated Statement of Operation- Period Ended March 31, 2015

	Consolidated Statement of Stockholders' Equity - Periods Ended March 31, 2015 and September 16, 2014

	Consolidated Statement of Cash Flows- Period Ended March 31, 2015

	Notes to Consolidated Financial Statements

2.	Exhibits. The following Exhibits are filed as part of, or incorporated by reference into, this Report:

Exhibit No.		Title

3.01		Articles of Incorporation of the Registrant (1)

3.02		Bylaws of the Registrant (1)

3.03		Amendment to Articles of Incorporation (Name change) (2)

3.04		By laws, as amended (5)

10.20		Office Lease Agreement with Bernardo Gateway Partners (4)

10.22		Patent License with EHP Products, Inc. (4)

10.23		Employment Agreement with William P. Spencer dated August 7, 2009 (5)

10.24		Employment Agreement with Debra L. Spencer dated August 7, 2009 (5)

10.25		Engagement Agreement with Lowell W. Giffhorn dated August 7, 2009 (5)

14		Code of Ethics (3)

31.1		302 Certification of William P. Spencer

31.2		302 Certification of Lowell W. Giffhorn

32.1		906 Certification of William P. Spencer

32.2		906 Certification of Lowell W. Giffhorn

101		Financial statements from the annual report on Form 10-K of the Company for the period ended March 31, 2015, formatted in XBRL; (i) the Consolidated Balance Sheets, (ii) the Consolidated Statement of Income, (iii) the Consolidated Statement of Shareholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements tagged as blocks of text.

(1)

Incorporated by reference to our Registration Statement on Form SB-1, file number 333-87535, filed on September 22, 1999.

(2) Incorporated by reference to our Registration Statement on Form SB-2, File Number 333-71756, declared effective on July 26, 2002 and post-effective amendment No. 1 thereto declared effective on August 25, 2003.

(3)

Incorporated by reference to our Annual Report on Form 10-K for the period ended March 31,

2004.

(4)

Incorporated by reference to our Annual Report on Form 10-K for the period ended March 31, 2006.

(5)

Incorporated by reference to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets, March 31, 2015 and September 16, 2014	F-3

Consolidated Statement of Operation, for the peiod ended March 31, 2015	F-4

Consolidated Statement of Stockholders' Equity, for the period ended March 31, 2015	F-5

Consolidated Statement of Cash Flows, for the period ended March 31, 2015	F-6

Notes to Consolidated Financial Statements	F-7 to F-21

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Imagenetix, Inc.

San Diego, California

We have audited the accompanying consolidated balance sheets of Imagenetix, Inc. and subsidiary as of March 31, 2015 and September 16, 2014, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the period ended March 31, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Imagenetix, Inc. and subsidiary as of March 31, 2015 and September 16, 2014, and the results of their operations and their cash flows for the period ended March 31, 2015, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company’s net losses and accumulated deficit, among other issues, raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ HJ Associates & Consultants, LLP

HJ Associates & Consultants, LLP

Salt Lake City, Utah

June 29, 2015

F-2

Imagenetix, Inc. and Subsidiary

Consolidated Balance Sheets

	March 31,			September 16,
	2015			2014

ASSETS

Current assets:
Cash	$	63,444		$	237,909
Restricted cash		-			1,255,800
Accounts receivable, net		335,617			160,802
Inventories, net		120,470			48,740
Prepaid expenses and other current assets		68,051			23,899
Total current assets		587,582			1,727,150

Property and equipment, net		22,939			25,487
Goodwill		8,205,597			8,205,597
Other assets		21,782			23,166
Total assets	$	8,837,900		$	9,981,400

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Secured note payable	$	-		$	726,250
Short term claims payable		500,000			550,000
Accounts payable		284,603			277,638
Accrued liabilities		49,159			244,913
Insurance contract payable		13,001			-
Customer deposits		8,500			8,250
Total current liabilities		855,263			1,807,051

Long term claims payable		1,650,000			1,850,000

Stockholders' equity
Preferred stock, $.001 par value; 5,000,000 shares authorized: none outstanding		-			-
Common stock, $.001 par value; 50,000,000 shares authorized: 28,372,955 and 28,272,955 issued and outstanding at March 31, 2015 and September 16, 2014, respectively		28,372			28,272
Capital in excess of par value		6,325,977			6,296,077
Retained earnings		(21,712	)		-
Total stockholders' equity		6,332,637			6,324,349
Total liabilities and stockholders' equity	$	8,837,900		$	9,981,400

See accompanying notes to consolidated financial statements.

F-3

Imagenetix, Inc. and Subsidiary

Consolidated Statement of Operations

	From September 17, 2014
	through
	March 31,
	2015

Net sales
Product sales	$	267,398
Licenses and royalties		557,101
Total net sales		824,499

Cost of sales		152,568

Gross profit		671,931

Operating expenses:
Selling, general and administrative		240,681
Payroll expense		328,992
Consulting expense		87,913
Operating expenses		657,586

Operating income		14,345

Other (expense):
Bankruptcy related expenses		(30,806	)
Interest expense		(5,000	)
Other income		(251	)
Total other (expense)		(36,057	)

Income before income taxes		(21,712	)

Income tax expense		-

Net loss	$	(21,712	)

Basic net loss per share	$	(0.00	)
Fully diluted net loss per share	$	(0.00	)

Basic weighted average common shares outstanding		28,343,873
Fully diluted weighted average common shares outstanding		28,343,873

See accompanying notes to consolidated financial statements.

F-4

Imagenetix, Inc. and Subsidiary

Consolidated Statement of Stockholders' Equity

	Common Stock				Capital in excess		Retained			Stockholders'
	Shares		Amount		of Par Value		Earnings			Equity

Balance, September 16, 2014		28,272,955	$	28,272	$	6,296,077	$	-		$	6,324,349

Issuance of common stock for services		100,000		100		29,900		-			30,000

Net loss for the period ended March 31, 2015		-		-		-		(21,712	)		(21,712	)

Balance, March 31, 2015		28,372,955	$	28,372	$	6,325,977	$	(21,712	)	$	6,332,637

See accompanying notes to consolidated financial statements.

F-5

Imagenetix, Inc. and Subsidiary

Consolidated Statement of Cash Flows

	From September 17, 2014
	through
	March 31, 2015
Operating activities:
Net loss	$	(21,712	)
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Amortization and depreciation		3,932
Provision for uncollectible accounts receivable		58,369
Issuance of common stock for services		30,000
Payments on long term bankruptcy claims payable		(250,000	)
Changes in assets and liabilities:
(Increase) decrease in restricted cash		1,255,800
(Increase) decrease in accounts receivable		(233,184	)
(Increase) decrease in inventories		(71,730	)
(Increase) decrease in other assets		(44,152	)
Increase (decrease) in accounts payable		6,965
Increase (decrease) in accrued liabilities		(195,754	)
Increase (decrease) in customer deposits		250
Net cash provided by operating activities		538,784
Investing activities
Purchases of property and equipment		-
Net cash used in investing activities		-
Financing activities:
Proceeds from issuance of insurance contract payable		21,668
Payments against insurance contracts payable		(8,667	)
Payments on secured note payable		(726,250	)
Net cash (used in) financing activities		(713,249	)
Net decrease in cash		(174,465	)
Cash, beginning of period		237,909
Cash, end of period	$	63,444

Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	35,901
Income taxes	$	5,602

See accompanying notes to consolidated financial statements.

F-6

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The accompanying consolidated financial statements represent the accounts of Imagenetix, Inc. (“Parent”) organized under the laws of the State of Nevada on March 28, 1988; its subsidiary Imagenetix, Inc. (“Subsidiary”) organized under the laws of the state of Colorado on July 26, 1996; its subsidiary Imagenetix [“Imagenetix CA”] organized under the laws of the State of California on January 7, 1999; and its subsidiary Periodyne, LLC (“Periodyne”) organized under the laws of the State of California on November 13, 2012. We are engaged in the business of developing, formulating, licensing and selling over-the-counter, natural-based nutritional supplements.

On March 23, 1999, Subsidiary completed an exchange agreement with Imagenetix CA wherein Subsidiary issued its common stock in exchange for all of the outstanding common stock of Imagenetix CA. The acquisition was accounted for as a recapitalization of Imagenetix CA as the shareholders of the Imagenetix CA controlled the combined entity after the acquisition. There was no adjustment to the carrying values of the assets or liabilities of the Subsidiary or Imagenetix CA as a result of the recapitalization.

During October 2000, the Subsidiary entered into a definitive merger agreement and plan of reorganization with Parent. The transaction was accounted for as a recapitalization of the Subsidiary, wherein the Subsidiary became a wholly owned subsidiary of the Parent. In connection with the reverse acquisition, the Parent changed its name to Imagenetix, Inc.

On September 16, 2014, as part of its emergence from a Bankruptcy proceeding, Parent acquired all of the outstanding membership interest in Periodyne, LLC.

We have, at the present time, not paid any dividends, and any dividends that may be paid in the future will depend upon our financial requirements and other relevant factors.

Consolidation

All significant intercompany transactions have been eliminated in consolidation.

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management.

Cash, Cash Equivalents and Restricted Cash

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents.

Restricted cash and cash equivalents at September 16, 2014 and March 31, 2015 consist of deposits in an amount of $1,255,800 and $0, respectively, held in an attorney client trust account for the benefit of payments made to creditors under our Plan of Reorganization.

We follow authoritative guidance to account for our restricted cash and cash equivalents. Under this authoritative guidance we are required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We determine fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment or valuations by third party professionals. The three levels of inputs that we may use to measure fair value are:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).

The following tables detail the fair value measurements within the fair value hierarchy of our cash, cash equivalents and investments in marketable securities:

	Fair Value Measurements at March 31, 2015 Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total

Cash	$	63,444	$	-	$	-	$	63,444
Restricted cash and cash equivalents		-		-		-		-
Total	$	63,444	$	-	$	-	$	63,444

	Fair Value Measurements at September 16, 2014 Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total

Cash	$	237,909	$	-	$	-	$	237,909
Restricted cash and cash equivalents		1,255,800		-		-		1,255,800
Total	$	1,493,709	$	-	$	-	$	1,493,709

F-7

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

Accounts receivable

Inventories

Inventories are carried at the lower of cost or market. Cost is determined by the first-in first-out method. Indirect overhead costs are allocated to inventory.

Property and Equipment

Goodwill

Goodwill was the result of emergence from a Bankruptcy proceeding in September 2014 and includes the cost of the acquisition of Periodyne and recording the effects of Fresh Start Accounting. Goodwill is not amortized and is periodically reviewed and impairments, if any, are recognized when the expected future benefit to be derived from goodwill is less than its carrying value determined based on the provisions of ASC No. 360 as discussed above.

Trademarks and Patents

F-8

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

Stock Based Compensation

We adopted ASC Nos.718 and 505, which require that share-based payments be reflected as an expense based upon the grant-date fair value of those awards. The expense is recognized over the remaining vesting periods of the awards. The Company estimates the fair value of these awards, including stock options and warrants, using the Black-Scholes model. This model requires management to make certain estimates in the assumptions used in this model, including the expected term the award will be held, volatility of the underlying common stock, discount rate and forfeiture rate. We develop our assumptions based on our past historical trends as well as consider changes for future expectations.

Revenue Recognition

We recognize revenue in accordance with the SEC’s Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements” (SAB 104) and ASC No. 605. SAB 104 requires that four basic criteria be met before revenue can be recognized: 1) there is evidence that an arrangement exists; 2) delivery has occurred; 3) the fee is fixed or determinable; and 4) collectability is reasonably assured. ASC No. 605 states that revenue from sales transactions where the buyer has the right to return the product shall be recognized at the time of sale only if (1) the seller’s price to the buyer is substantially fixed or determinable at the date of sale; (2) the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product; (3) the buyer’s obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product; (4) the buyer acquiring the product for resale has economic substance apart from that provided by the seller; (5) the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer; and (6) the amount of future returns can be reasonably estimated. We recognize revenue upon determination that all criteria for revenue recognition have been met. The criteria are usually met at the time title passes to the customer, which usually occurs upon shipment. Revenue from shipments where title passes upon delivery is deferred until the shipment has been delivered.

F-9

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

Income Taxes

Research and Development

We incur expenses to further develop our products and formulas, commission entities to perform clinical trials and evaluate potential products to expand our portfolio. During the period ended March 31, 2015 we did not incur any research and development expenses.

Earnings Per Share

The computation of earnings per share is based on the weighted average number of shares outstanding during the period presented in accordance with ASC No. 260 (See Note 13).

New Accounting Pronouncements

NOTE 2- GOING CONCERN

The Company has historically financed its operations internally and through debt and equity financings. At March 31, 2015, we had cash holdings of $63,444, a decrease of $1,430,265 compared to September 16, 2014, the date on which we emerged from the Bankruptcy proceeding. Our net working capital at March 31, 2015, was a deficit of $267,681 compared to a deficit of $79,901 as of September 16, 2014. The reduction in cash and working capital is primarily the result of distributions to creditors under the Bankruptcy Plan of Reorganization during the current period. The Company may incur unknown expenses or may not be able to meet its revenue forecast, and one or more of these circumstances would require the Company to seek additional capital. The Company may not be able to obtain equity capital or debt funding on terms that are acceptable. Even if the Company receives additional funding, such proceeds may not be sufficient to allow the Company to sustain operations until it becomes profitable and begins to generate positive cash flows from operations. This raises substantial doubt about the Company’s ability to continue as a going concern.

The Company may employ cost cutting programs should the revenue projections fall short and alternative debt or equity financings are not found at terms acceptable to the Company.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

F-10

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

NOTE 3- FRESH-START REPORTING

We adopted ASC 852, Reorganizations, effective as of September 16, 2014, the effective date of the Plan of Reorganization. Under ASC 852 the following pro-forma balance sheet represents the change from the final bankruptcy filing to the initial accounting balances using “Fresh-Start Reporting.” Fair value adjustments were based on management’s estimates of property and equipment’s estimated remaining useful lives and the net realizable values of inventory and other assets based on the lower of cost or market.

F-11

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

				Reorganization				Fresh-start
	Predecessor			adjustments				adjiustments				Successor

Cash	$	235,622		$	1,258,087		1,3	$	-			$	1,493,709
Accounts receivable		206,494			-				(45,692	)	5		160,802
Inventory		31,780			34,460		3		(17,500	)	5		48,740
Prepaid assets		23,899			-				-				23,899
Property, plant & equipment					-				25,487		5		25,487
Goodwill					1,163,383		3		7,042,214		5		8,205,597
Intangible assets		23,166			-				-				23,166
Total assets		520,961			2,455,930				7,004,509				9,981,400

Accounts payable- post-petition		532,338			(489,000	)	1,2		-				43,338
Accrued interest		30,902			-								30,902
Accrued liabilities		23,619			190,393		4		-				214,012
Secured liabilities- PRI		726,250			-				-				726,250
Secured liabilities- TriPharma		2,594,884			(194,884	)	4		-				2,400,000
Priority tax liability		1,895			(190	)	4		-				1,705
Customer deposits		128,100			(57,870	)	3		(61,980	)	6		8,250
Unsecured debt- pre-petition		949,628			(717,034	)	4		-				232,594
Total liabilities		4,987,616			(1,268,585	)			(61,980	)			3,657,051

Common stock		13,061			15,211		1,2,3		-				28,272
Additional paid in capital		13,690,254			6,296,077		1,2,3		(13,690,254	)	7		6,296,077
Retained earnings (deficit)		(18,169,970	)		(2,586,773	)	1,2,3,4		20,756,743		7		-
Total stockholders' equity (deficit)		(4,466,655	)		3,724,515				7,066,489				6,324,349
Total liabilities and stockholders equity	$	520,961		$	2,455,930			$	7,004,509			$	9,981,400

Reorganization adjustments reflect equity funding of the plan of reorganization, issuance of common stock in exchange of professional fees, the acquisition of Periodyne and the discharge of liabilities subject to compromise in accordance with the plan of reorganization as follows:

Issuance of common stock to fund plan of reorganization	1	$	1,254,800
Issuance of common stock for professional fees	2		790,000
Acquisition of Periodyne	3		1,258,000
Liabilities subject to compromise	4		421,715
		$	3,724,515

Fresh-start adjustments to accounts receivable, inventory, property and equipment, and goodwill reflect the adjustment of the assets of the successor to their fair values, including tangible assets not previously recognized:

Accounts receivable		$	(45,692	)
Inventory			(17,500	)
Property and equipment			25,487
Goodwill			7,042,214
Total asset adjustments	5	$	7,004,509

Fresh-start adjustments to customer deposits reflects the adjustment of the liabilities of the successor to its fair value:

Customer deposits

(61,980

)

(7) Fresh-start adjustment to retained earnings (deficit) resets accumulated deficit to zero.

F-12

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

NOTE 4 – ACCOUNTS RECEIVABLE

Accounts receivable are carried at the expected realizable value. Accounts receivable consisted of the following:

	March 31,			September 16,
	2015			2014

Accounts receivable	$	393,986		$	160,802
Allowance for doubtful accounts		(58,369	)		-

Accounts receivable, net	$	335,617		$	160,802

NOTE 5 – INVENTORY

Inventory consisted of the following:

	March 31,		September 16,
	2015		2014

Finished products	$	120,470	$	48,740
Less reserve for obsolescence		-		-
	$	120,470	$	48,740

NOTE 6 - PROPERTY AND EQUIPMENT

The following is a summary of equipment, at cost, less accumulated depreciation:

	March 31,		September 16,
	2015		2014

Office equipment	$	25,487	$	25,487
Less accumulated depreciation		2,548		-

	$	22,939	$	25,487

Depreciation expense for the period ended March 31, 2015 was $2,548.

F-13

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

NOTE 7 – GOODWILL

The following is a summary of goodwill:

	March 31,		September 16,
	2015		2014

Acquisition of Periodyne	$	1,163,383	$	1,163,383
Fresh-start adjustments		7,042,214		7,042,214
	$	8,205,597	$	8,205,597

There is no amortization of goodwill and no impairments have been recorded for the period ended March 31, 2015.

NOTE 8 – OTHER ASSETS

The following is a summary of other assets included on the face of the balance sheet:

	March 31,		September 16,
	2015		2014

Patent	$	23,166	$	23,166
Less accumulated amortization		1,384		-

	$	21,782	$	23,166

For the period ended March 31, 2015 amortization expense was $1,384. The estimated future amortization expense related to other assets as of March 31, 2015 is as follows:

Years ending March 31,

2016	$	2,373
2017		2,373
2018		2,373
2019		2,373
2020		2,373
Thereafter		9,917
Total	$	21,782

F-14

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

NOTE 9 - SECURED NOTES PAYABLE AND LONG TERM CLAIMS PAYABLE

In May 2011, we entered into a $700,000 secured note payable with the parent company of one of our customers. The terms of the note included quarterly interest payments at a rate of 7.5% for 18 months at the end of which time the entire note was due. In September 2011, two quarterly interest payments were deferred and added to the principal of the note resulting in a balance of $726,250 which amount was paid in September 2014 as part of the Plan of Reorganization in the Bankruptcy proceeding. The note was secured by the assets of the Company.

In November 2011, a judgement in the amount of approximately $4,500,000 was entered against us as the result of an arbitration ruling in favor of TriPharma LLC, a distributor of ours. As a result of aggressive collection actions taken by TriPharma, we filed a Bankruptcy proceeding in December 2012. As part of the Bankruptcy proceeding we negotiated a reduction in the arbitration award to approximately $2,500,000 with an additional reduction of $500,000 available if we pay any remaining balance by March 16, 2016. However, if we default on payment of the obligation, the amount is increased by $1,000,000. There is no interest on the obligation as long as we are not in default and the balance is paid in full by March 16, 2016. Interest will be charged from September 16, 2014 at a rate of 6% if we go into default. As a result of negotiations as to where payments were to be made in December 2014, a payment that was due on December 1st was not paid until December 16th when TriPharma issued a Notice of Default. Although we contend that no default took place, we entered into a Forbearance Agreement which deferred the March 1, 2015 payment of $100,000 until June 1, 2015. Eventually, the issue as to whether a default took place in December 2014 may need to be resolved by the Bankruptcy Court.

The following is the scheduled amounts due, assuming no reduction as a result of early payment and no increase as a result of default, reflected as Long term claims payable as of March 31, 2015:

Years ending March 31,
2016	$	500,000
2017		450,000
2018		550,000
2019		600,000
2020		50,000
Total	$	2,150,000

F-15

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

NOTE 10 – LEASES OBLIGATIONS

Operating Leases

We entered into a three-year building lease for our office commencing in January 2013 and expiring in December 2015. In addition we entered into a three-year lease for warehouse space commencing in September 2006, which was extended month to month in August 2010. Lease

expense for the period ended March 31, 2015 amounted to $59,514. The following is a schedule of minimum annual rental payments for the next five years.

Years ending March 31,
2016	$	73,251
Thereafter		-
Total	$	73,251

NOTE 11 – COMMITMENTS AND CONTINGINCIES

Contingencies

We are involved in litigation from time to time in the normal course of business.

Management believes there are no such claims, which would have a material effect on our financial position.

Other agreements

We routinely enter into contracts and agreements with suppliers, manufacturers, consultants, product marketing, and sales representatives in the normal course of doing business. These agreements can be either short or long term and are normally limited to specific products and

Marketing opportunities.

NOTE 12 – CAPITAL STOCK

Preferred Stock

We have authorized 5,000,000 shares of preferred stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors. No shares are issued and outstanding at March 31, 2015.

Common Stock

The Company has authorized 50,000,000 shares of common stock at $.001 par value. At March 31, 2015, the Company had 28,372,955 shares of common stock issued and outstanding, respectively.

F-16

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

In September 2014, we issued 5,228,333 shares of restricted common stock to a group of individual investors for an aggregate amount of $1,254,800, or $0.24 per share, related to the financing of our emergence from the Bankruptcy proceeding. In addition, in September 2014, we issued 6,583,333 shares of unrestricted common stock to two legal firms as settlement of administrative claims as a result of the Bankruptcy proceeding for an aggregate amount of $790,000, or $0.12 per share, and 3,400,000 shares of restricted common stock to the sole owner of Periodyne LLC for the acquisition of the membership interests in Periodyne LLC for an aggregate amount of $1,258,000, or $0.37 per share.

In November 2014, we issued 100,000 shares of restricted common stock to a consultant in exchange for services at an amount of $30,000, or $0.30 per share.

Warrants

A summary of the status of the warrants granted under various agreements at March 31, 2015, and changes during the years then ended is presented below:

	For the Period Ended
	March 31, 2015
			Weighted
			Average
			Exercise
Warrants	Shares		Price
Outstanding at beginning of period, September 16, 2014		8,409,334	$	0.62
Granted		-		-
Cancelled		-		-
Exercised		-		-
Outstanding at end of the period		8,409,334	$	0.62

Exercisable at end of the the period		8,409,334	$	0.62

Weighted average fair value of warrants granted during the period			$	0.36

During the period ended March 31, 2015, we had outstanding warrants issued as a result of emerging from the Bankruptcy proceeding as follows: 5,228,334 common stock purchase warrants issued to a group of investors on financing the emergence from the Bankruptcy proceeding, 1,700,000 common stock purchase warrants issued to the owner of Periodyne LLC, and 1,481,000 common stock purchase warrants issued to management of the Company. The value of the above warrants was determined using the Black-Sholes option pricing method and was included in the costs of the Bankruptcy proceeding.

A summary of the status of the warrants granted under the various agreements at

March 31, 2015, are presented in the table below:

F-17

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

		Outstanding						Exercisable
				Weighted
				Average		Weighted				Weighted
Range of				Remaining		Average				Average
Exercise		Number		Contractual		Exercise		Number		Exercise
Prices		Outstanding		Life		Price		Exercisable		Price

	*Warrants*

$	0.10		1,481,000		4.47	$	0.10		1,481,000	$	0.10
$	0.48		5,228,334		4.47	$	0.48		5,228,334	$	0.48
$	1.50		1,700,000		4.47	$	1.50		1,700,000	$	1.50
			8,409,334		4.47	$	0.62		8,409,334	$	0.62

NOTE 13 - INCOME TAXES

At March 31, 2015, the total of all deferred tax assets was fully reserved. There are no deferred tax liabilities as of March 31, 2015.

The temporary differences gave rise to the following deferred tax asset which is fully reserved:

	March 31,
	2015

Excess of financial accounting
over tax depreciation	$	123,100
Allowance for bad debts		22,800
Valuation reserve		(145,900	)
Net deferred tax asset	$	-

F-18

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

The reconciliation of income tax from continuing operations computed at the U.S. federal statutory tax rate to our effective rate is as follows for the period ended:

	For Period Ended
	March 31,
	2015

Federal income tax expense computed at the Federal statutory rate	$	(8,500	)
Depreciation		(4,200	)
Allowance for bad debts		22,800
Tax valuation allowance		(10,100	)
Income tax expense (benefit)	$	-

At March 31, 2014 the Company had net operating loss carryforwards of approximately $8,609,000 that may be offset against future taxable income from the year 2016 through 2036. No tax benefit has been reported in the March 31, 2015 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. The current year net operating loss is $10, 122 which can be used through the years 2036. The prior net operating loss carryforward of $8,608,930 may be limited to a Section 382 calculation due to ownership changes in the amount of $54,327 per year. The Company is currently evaluating whether a change in ownership took place as a result of its emergence from bankruptcy.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

F-19

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

We periodically evaluate the likelihood of the realization of deferred tax assets, and adjust the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carry forward periods available to us for tax reporting purposes, and other relevant factors.

At March 31, 2015, based on the weight of available evidence, including current year taxable income and expectations of future taxable income, the Company determined that it was more likely that its deferred tax assets would not be realized and has recorded a valuation allowance associated with its deferred tax assets.

The Company has adopted ASC No. 740. This statement requires an asset and liability approach for accounting for income taxes and prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC No. 740 states that a tax benefit from an uncertain position may be recognized if it is "more likely than not" that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information.

Upon adoption of ASC No. 740, there was no impact to the Company's consolidated financial statements. The Company estimates that the unrecognized tax benefit will not change significantly within the next twelve months. The Company will continue to classify income tax penalties and interest as part of general and administrative expense in its statements of operations. Accrued interest on uncertain tax positions is not significant. There are no penalties accrued as of March 31, 2015. The following table summarizes the open tax years for each major jurisdiction:

Jurisdiction		Open Tax Years
Federal		2013 – 2015
California		2013 – 2015

As the Company has significant net operating loss carry forwards, even if certain of the Company’s tax positions were disallowed, it is not foreseen that the Company would have to pay any taxes in the near future. Consequently, the Company does not calculate the impact of interest or penalties on amounts that might be disallowed.

NOTE 14 – EARNINGS PER SHARE

The following data show the amounts used in computing earnings per share of common stock for the period presented:

F-20

IMAGENETIX, INC. AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2015

	For the Period Ended
	March 31,
	2015

Loss available to common shareholders (Numerator)	$	(21,712	)

Weighted average number of common shares outstanding used in basic loss per share during the period (Denominator)		28,343,873

Weighted average number of common shares outstanding used in diluted loss per share during the period (Denominator)		28,343,873

Basic loss per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during each period. Diluted income per share is computed by dividing net income by the weighted-average number of common shares and common equivalent shares outstanding during each period. Common equivalent shares include stock options and warrants using the treasury stock method. For periods which include a loss, the computation of diluted loss per share excludes the impact of stock options and warrants because they would be antidilutive and diluted loss per share is therefore the same as basic loss per share.

NOTE 15 – CONCENTRATIONS

Sales

During the period ended March 31, 2015, we had three significant customers which accounted for 68%, 12% and 11% of sales.

Supplier

We also have a single source of a specific raw material, which is used as part of products which account for approximately 32% of our sales. The interruption of raw materials provided by this supplier or the loss of a significant customer would adversely affect our business and financial condition.

Accounts Receivable

At March 31, 2015, we had five customers which accounted for 49%, 15%, 14%, 11% and 11% of our accounts receivable balances.

F-21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	IMAGENETIX, INC.
	a Nevada corporation

	By:	/s/ WILLIAM P. SPENCER
		William P. Spencer
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date

/s/ WILLIAM P. SPENCER	Chief Executive Officer,	June 29, 2015
William P. Spencer	President and Director


/s/ WILLAIM A. TOOMEY	Director	June 29, 2015
William A. Toomey

/s/ LOWELL W. GIFFHORN	Chief Financial Officer (Principal	June 29, 2015
Lowell W. Giffhorn	Accounting Officer)

/s/ A. WAYNE OPPERMAN	Director	June 29, 2015
A. Wayne Opperman

/s/ ROBERT E. DENNIS	Director	June 29, 2015
Robert E. Dennis

/s/ GEORGE C. GEORGAKLIS	Director	June 29, 2015
George C. Georgaklis

IMAGENETIX INC /NV/ - FORM 10-K - June 29, 2015

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IMAGENETIX INC /NV/ Reports