Imagenetix 10-Q 14 Aug 15 2015 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jun. 30, 2015	Aug. 14, 2015
Document And Entity Information
Entity Registrant Name	IMAGENETIX INC /NV/
Entity Central Index Key	839,441
Document Type	10-Q
Trading Symbol	iagx
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		28,422,955
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,015

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Current assets:
Cash	$ 92,389	$ 63,444
Accounts receivable, net	383,141	335,617
Inventories, net	115,153	120,470
Prepaid expenses and other current assets	98,990	68,051
Total current assets	689,673	587,582
Property and equipment, net	21,665	22,939
Goodwill	8,205,597	8,205,597
Other assets	21,189	21,782
Total Assets	8,938,124	8,837,900
Current liabilities:
Short term claims payable	500,000	500,000
Accounts payable	395,075	284,603
Accrued liabilities	15,690	49,159
Insurance contract payable	48,226	13,001
Customer deposits	37,275	8,500
Total current liabilities	996,266	855,263
Long term claims payable	$ 1,650,000	$ 1,650,000
Stockholders' equity
Preferred stock, $.001 par value; 5,000,000 shares authorized: none outstanding
Common stock, $.001 par value; 50,000,000 shares authorized: 28,422,955 and 28,372,955 issued and outstanding at June 30, 2015 and March 31, 2015, respectively	$ 28,422	$ 28,372
Capital in excess of par value	6,333,927	6,325,977
Retained earnings	(70,491)	(21,712)
Total stockholders' equity	6,291,858	6,332,637
Total Liabilities and Stockholders' Equity	$ 8,938,124	$ 8,837,900

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2015	Mar. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, share issued	28,422,955	28,372,955
Common stock, shares outstanding	28,422,955	28,372,955

Condensed Consolidated Statemen

Condensed Consolidated Statement of Operations (Unaudited) - 3 months ended Jun. 30, 2015 - USD ($)	Total
Net sales
Product sales	$ 209,515
Licenses and royalties	168,000
Total net sales	377,515
Cost of sales	92,184
Gross profit	285,331
Operating expenses:
Selling, general and administrative	91,785
Payroll expense	147,864
Consulting expense	96,564
Operating expenses	336,213
Operating loss	(50,882)
Other income (expense):
Other income	2,103
Total other income	2,103
Loss before income taxes	$ (48,779)
Income tax provision
Net loss	$ (48,779)
Basic net loss per share (in dollars per share)	$ 0
Fully diluted net loss per share (in dollars per share)	$ 0
Basic weighted average common shares outstanding (in shares)	28,411,966
Fully diluted weighted average common shares outstanding (in shares)	28,411,966

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 3 months ended Jun. 30, 2015 - USD ($)	Common Stock [Member]	Capital in excess of Par Value [Member]	Retained Earnings (Losses) [Member]	Total
Balance at Beginning at Mar. 31, 2015	$ 28,372	$ 6,325,977	$ (21,712)	$ 6,332,637
Balance at Beginning in shares at Mar. 31, 2015	28,372,955
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for services	$ 50	$ 7,950		8,000
Issuance of common stock for services in shares	50,000
Net loss			$ (48,779)	(48,779)
Balance at End at Jun. 30, 2015	$ 28,422	$ 6,333,927	$ (70,491)	$ 6,291,858
Balance at End in shares at Jun. 30, 2015	28,422,955

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited)	3 Months Ended
	Jun. 30, 2015USD ($)
Operating activities:
Net loss	$ (48,779)
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Provision for uncollectible accounts receivable	15,298
Issuance of common stock for services	8,000
Amortization and depreciation	1,867
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	(62,822)
(Increase) decrease in inventories	5,317
(Increase) decrease in other assets	(30,939)
Increase (decrease) in accounts payable	110,472
Increase (decrease) in accrued liabilities	(33,469)
Increase (decrease) in customer deposits	28,775
Net cash (used in) operating activities	$ (6,280)
Investing activities
Net cash used in investing activities
Financing activities:
Proceeds from issuance of insurance contract payable	$ 48,856
Payments against insurance contracts payable	(13,631)
Net cash provided by financing activities	35,225
Net increase in cash	28,945
Cash, beginning of period	63,444
Cash, end of period	$ 92,389
Cash paid during the period for:
Interest
Income taxes
Non Cash Operating Activities:
Elimination of accounts receivable reserve	$ 73,667

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION The consolidated financial statements of Imagenetix, Inc. ("Imagenetix") presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America. In the opinion of management, the interim consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. Operating results for the period are not necessarily indicative of the results that may be expected for the year. 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 March 31, 2015 (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, 2015. 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 for the three months ended June 30, 2015 do not reflect comparative statements for any prior accounting periods. A reconciliation of the “fresh-start reporting” is included in Note 2. Going Concern The Company has historically financed its operations internally and through debt and equity financings. At June 30, 2015, we had cash holdings of $92,389 compared to $63,444 at March 31, 2015. Our net working capital at June 30, 2015, was a deficit of $306,593 compared to a deficit of $267,681 as of March 31, 2015. 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. Earnings Per Share We follow the Financial Accounting Standards Board Accounting Standards Codification ("ASC") No. 260. Under ASC No. 260, basic earnings per share is calculated as earnings available to common stockholders divided by the weighted average number of common shares outstanding. Diluted earnings per share is calculated as net income divided by the diluted weighted average number of common shares. The diluted weighted average number of common shares is calculated using the treasury stock method for common stock issuable pursuant to outstanding common stock warrants. For any period in which the calculation of loss per share is anti-dilutive, the diluted weighted average number of shares is the equivalent to the number of shares outstanding.

FRESH-START REPORTING

FRESH-START REPORTING	3 Months Ended
	Jun. 30, 2015
Reorganizations [Abstract]
FRESH-START REPORTING	2. 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.” 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 6 $ (61,980 ) (7) Fresh-start adjustment to retained earnings (deficit) resets accumulated deficit to zero.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE	3 Months Ended
	Jun. 30, 2015
Receivables [Abstract]
ACCOUNTS RECEIVABLE	3. ACCOUNTS RECEIVABLE Accounts receivable are carried at the expected realizable value. Accounts receivable consisted of the following: June 30, March 31, 2015 2015 Accounts receivable $ 383,141 $ 393,986 Allowance for doubtful accounts — (58,369 ) Accounts receivable, net $ 383,141 $ 335,617 At June 30, 2015, we had three customers which accounted for 44%, 33% and 14%, respectfully, of our accounts receivable balances. At March 31, 2015, we had five customers which accounted for 49%, 15%, 14%, 11% and 11%, respectfully, of our accounts receivable balances. For the period ended June 30, 2015, we had three significant customers which accounted for 44%, 29% and 14% of our net sales.

INVENTORY

INVENTORY	3 Months Ended
	Jun. 30, 2015
Inventory Disclosure [Abstract]
INVENTORY	4. 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. Inventories consist of the following: June 30, March 31, 2015 2015 Finished products $ 115,153 $ 120,470 Less reserve for obsolescence - - $ 115,153 $ 120,470

GOODWILL

GOODWILL	3 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL	5. GOODWILL As a result of adopting “Fresh-Start Reporting” goodwill of $7,042,214 was recognized when accumulated retained deficit was reduced to zero and goodwill of $1,163,383 was recognized on the acquisition of Periodyne.

TRIPHARMA SETTLEMENT

TRIPHARMA SETTLEMENT	3 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
TRIPHARMA SETTLEMENT	7. TRIPHARMA SETTLEMENT In November 2011, a judgment 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 previous 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 1, 2014 was not paid until December 16, 2014 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. Again, in June 2015, there arose a dispute as to where payments were to be made and the Company did not make the deferred payment from March 1, 2015 or the payment that was due on June 1, 2015. TriPharma did not issue a Notice of Default. Eventually, the issue as to whether a default took place in December 2014 and to where payments are to be made 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 June 30, 2015: Years ending March 31, 2016 $ 500,000 2017 450,000 2018 550,000 2019 600,000 2020 50,000 Total $ 2,150,000

COMMITMENTS AND CONTINGINCIES

COMMITMENTS AND CONTINGINCIES	3 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGINCIES	8. COMMITMENTS AND CONTINGINCIES Contingencies We are involved in litigation from time to time in the normal course of business. Management believes there are no claims, which would have a material effect on our financial position.

EQUITY TRANSACTIONS

EQUITY TRANSACTIONS	3 Months Ended
	Jun. 30, 2015
Equity [Abstract]
EQUITY TRANSACTIONS	9. EQUITY TRANSACTIONS Common Stock In April 2015, we issued 50,000 shares of restricted common stock to a consultant in exchange for services at an amount of $8,000, or $0.16 per share. 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 In September 2014, as part of the Plan of Reorganization we issued warrants to investors, the principal of Periodyne and employees. A summary of outstanding warrants is as follows: For the Period Ended June 30, 2015 Weighted Average Exercise Warrants Shares Price Outstanding at March 31, 2015 8,409,334 $ 0.62 Granted - - Cancelled - - Exercised - - Outstanding at June 30, 2015 8,409,334 $ 0.62 Exercisable at June 30, 2015 8,409,334 $ 0.62 Weighted average fair value of warrants granted during the period $ -

INCOME TAXES

INCOME TAXES	3 Months Ended
	Jun. 30, 2015
Income Tax Disclosure [Abstract]
INCOME TAXES	10. INCOME TAXES We have adopted ASC 740 which 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 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 740, there was no impact to our consolidated financial statements. We estimate that the unrecognized tax benefit will not change significantly within the next twelve months. We will continue to classify income tax penalties and interest as part of general and administrative expense in our statements of operations. Accrued interest on uncertain tax positions is not significant. There are no penalties accrued as of June 30, 2015. The following table summarizes the open tax years for each major jurisdiction: Jurisdiction Open Tax Federal 2011 – 2013 California 2011 – 2013 As we have had significant net operating loss carry forwards from the predecessor company, even if certain of our tax positions were disallowed, it is not foreseen that we would have to pay any taxes in the near future. Consequently, we do not calculate the impact of interest or penalties on amounts that might be disallowed. During the period ended June 30, 2015, we reviewed our deferred tax assets and determined that, as a result of previous continuing losses, we could not expect a greater than 50 percent likelihood of the tax benefits being realized. Accordingly, we will continue to recognize a full valuation allowance against our current and long-term deferred tax assets.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	3 Months Ended
	Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Emergence from Bankruptcy	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 March 31, 2015 (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, 2015. 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 for the three months ended June 30, 2015 do not reflect comparative statements for any prior accounting periods. A reconciliation of the “fresh-start reporting” is included in Note 2.
Going Concern	Going Concern The Company has historically financed its operations internally and through debt and equity financings. At June 30, 2015, we had cash holdings of $92,389 compared to $63,444 at March 31, 2015. Our net working capital at June 30, 2015, was a deficit of $306,593 compared to a deficit of $267,681 as of March 31, 2015. 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.
Earnings Per Share	Earnings Per Share We follow the Financial Accounting Standards Board Accounting Standards Codification ("ASC") No. 260. Under ASC No. 260, basic earnings per share is calculated as earnings available to common stockholders divided by the weighted average number of common shares outstanding. Diluted earnings per share is calculated as net income divided by the diluted weighted average number of common shares. The diluted weighted average number of common shares is calculated using the treasury stock method for common stock issuable pursuant to outstanding common stock warrants. For any period in which the calculation of loss per share is anti-dilutive, the diluted weighted average number of shares is the equivalent to the number of shares outstanding.

FRESH-START REPORTING (Tables)

FRESH-START REPORTING (Tables)	3 Months Ended
	Jun. 30, 2015
Reorganizations [Abstract]
Schedule of Fresh-Start Adjustments	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.” 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
Schedule of Reorganization adjustments reflecting equity	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
Schedule of Fresh start adjustments relating to Assets	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
Schedule of Fresh start adjustments relating to Liabilities	Fresh-start adjustments to customer deposits reflects the adjustment of the liabilities of the successor to its fair value: Customer deposits 6 $ (61,980 )

ACCOUNTS RECEIVABLE (Tables)

ACCOUNTS RECEIVABLE (Tables)	3 Months Ended
	Jun. 30, 2015
Receivables [Abstract]
Schedule of accounts receivable	Accounts receivable are carried at the expected realizable value. Accounts receivable consisted of the following: June 30, March 31, 2015 2015 Accounts receivable $ 383,141 $ 393,986 Allowance for doubtful accounts — (58,369 ) Accounts receivable, net $ 383,141 $ 335,617

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Jun. 30, 2015
Inventory Disclosure [Abstract]
Schedule of inventories	Inventories consist of the following: June 30, March 31, 2015 2015 Finished products $ 115,153 $ 120,470 Less reserve for obsolescence - - $ 115,153 $ 120,470

TRIPHARMA SETTLEMENT (Tables)

TRIPHARMA SETTLEMENT (Tables)	3 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Schedule of schedule of maturities of long term claims payable	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 June 30, 2015: Years ending March 31, 2016 $ 500,000 2017 450,000 2018 550,000 2019 600,000 2020 50,000 Total $ 2,150,000

EQUITY TRANSACTIONS (Tables)

EQUITY TRANSACTIONS (Tables)	3 Months Ended
	Jun. 30, 2015
Equity [Abstract]
Schedule of warrants granted under various agreements	A summary of outstanding warrants is as follows: For the Period Ended June 30, 2015 Weighted Average Exercise Warrants Shares Price Outstanding at March 31, 2015 8,409,334 $ 0.62 Granted - - Cancelled - - Exercised - - Outstanding at June 30, 2015 8,409,334 $ 0.62 Exercisable at June 30, 2015 8,409,334 $ 0.62 Weighted average fair value of warrants granted during the period $ -

INCOME TAXES (Tables)

INCOME TAXES (Tables)	3 Months Ended
	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Schedule of summary of income tax examinations open tax years	The following table summarizes the open tax years for each major jurisdiction: Jurisdiction Open Tax Federal 2011 – 2013 California 2011 – 2013

BASIS OF PRESENTATION (Detail N

BASIS OF PRESENTATION (Detail Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash holdings	$ 92,389	$ 63,444
Net working capital deficit	$ 306,593	$ 267,681

FRESH-START REPORTING (Details)

FRESH-START REPORTING (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Goodwill	$ 8,205,597	$ 8,205,597
Common stock	28,422	28,372
Additional paid in capital	6,333,927	6,325,977
Retained earnings (deficit)	(70,491)	(21,712)
Total stockholders' equity (deficit)	6,291,858	6,332,637
Total liabilities and stockholders equity	8,938,124	$ 8,837,900
Goodwill	7,042,214
Predecessor [Member]
Cash	235,622
Accounts receivable	206,494
Inventory	31,780
Prepaid assets	23,899
Intangible assets	23,166
Total assets	520,961
Accounts payable- post-petition	532,338
Accrued interest	30,902
Accrued liabilities	23,619
Secured liabilities- PRI	726,250
Secured liabilities- TriPharma	2,594,884
Priority tax liability	1,895
Customer deposits	128,100
Unsecured debt- pre-petition	949,628
Total liabilities	4,987,616
Common stock	13,061
Additional paid in capital	13,690,254
Retained earnings (deficit)	(18,169,970)
Total stockholders' equity (deficit)	(4,466,655)
Total liabilities and stockholders equity	520,961
Reorganization adjustments[Member]
Cash	$ 1,258,087
Accounts receivable
Inventory	$ 34,460
Prepaid assets
Property, plant & equipment
Goodwill	$ 1,163,383
Intangible assets
Total assets	$ 2,455,930
Accounts payable- post-petition	$ (489,000)
Accrued interest
Accrued liabilities	$ 190,393
Secured liabilities- PRI
Secured liabilities- TriPharma	$ (194,884)
Priority tax liability	(190)
Customer deposits	(57,870)
Unsecured debt- pre-petition	(717,034)
Total liabilities	(1,268,585)
Common stock	15,211
Additional paid in capital	6,296,077
Retained earnings (deficit)	(2,586,773)
Total stockholders' equity (deficit)	3,724,515
Total liabilities and stockholders equity	$ 2,455,930
Fresh-start adjiustments [Member]
Cash
Accounts receivable	$ (45,692)
Inventory	$ (17,500)
Prepaid assets
Property, plant & equipment	$ 25,487
Goodwill	$ 7,042,214
Intangible assets
Total assets	$ 7,004,509
Accounts payable- post-petition
Accrued interest
Accrued liabilities
Secured liabilities- PRI
Secured liabilities- TriPharma
Priority tax liability
Customer deposits	$ (61,980)
Unsecured debt- pre-petition
Total liabilities	$ (61,980)
Common stock
Additional paid in capital	$ (13,690,254)
Retained earnings (deficit)	20,756,743
Total stockholders' equity (deficit)	7,066,489
Total liabilities and stockholders equity	7,004,509
Successor [Member]
Cash	1,493,709
Accounts receivable	160,802
Inventory	48,740
Prepaid assets	23,899
Property, plant & equipment	25,487
Goodwill	8,205,597
Intangible assets	23,166
Total assets	9,981,400
Accounts payable- post-petition	43,338
Accrued interest	30,902
Accrued liabilities	214,012
Secured liabilities- PRI	726,250
Secured liabilities- TriPharma	2,400,000
Priority tax liability	1,705
Customer deposits	8,250
Unsecured debt- pre-petition	232,594
Total liabilities	3,657,051
Common stock	28,272
Additional paid in capital	$ 6,296,077
Retained earnings (deficit)
Total stockholders' equity (deficit)	$ 6,324,349
Total liabilities and stockholders equity	$ 9,981,400

FRESH-START REPORTING (Details

FRESH-START REPORTING (Details 1) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Stockholders' Equity	$ 6,291,858	$ 6,332,637
Reorganization adjustments[Member]
Stockholders' Equity	3,724,515
Reorganization adjustments[Member] | Issuance Of Common Stock To Fund Plan Of Reorganization [Member]
Stockholders' Equity	1,254,800
Reorganization adjustments[Member] | Issuance of Common Stock For Professional Fees [Member]
Stockholders' Equity	790,000
Reorganization adjustments[Member] | Acquisition Of Periodyne [Member]
Stockholders' Equity	1,258,000
Reorganization adjustments[Member] | Liabilities Subject To Compromise [Member]
Stockholders' Equity	$ 421,715

FRESH-START REPORTING (Detail26

FRESH-START REPORTING (Details 2) - Fresh-start adjiustments [Member] - Revaluation of Assets [Member]	Jun. 30, 2015USD ($)
Accounts receivable	$ (45,692)
Inventory	(17,500)
Property and equipment	25,487
Goodwill	7,042,214
Total asset adjustments	$ 7,004,509

FRESH-START REPORTING (Detail27

FRESH-START REPORTING (Details 3)	Jun. 30, 2015USD ($)
Fresh-start adjiustments [Member] | Revaluation of Assets [Member]
Customer deposits	$ (61,980)

ACCOUNTS RECEIVABLE (Details Na

ACCOUNTS RECEIVABLE (Details Narrrative) - Customer Concentration Risk [Member]	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Mar. 31, 2015
Accounts Receivable [Member]
Number of customers	Three customers	Five customers
Accounts Receivable [Member] | Customer A [Member]
Concentration risk, percentage	44.00%	49.00%
Accounts Receivable [Member] | Customer B [Member]
Concentration risk, percentage	33.00%	15.00%
Accounts Receivable [Member] | Customer C [Member]
Concentration risk, percentage	14.00%	14.00%
Accounts Receivable [Member] | Customer D [Member]
Concentration risk, percentage		11.00%
Accounts Receivable [Member] | Customer E [Member]
Concentration risk, percentage		11.00%
Sales Revenue, Net [Member]
Number of customers	Three customers
Sales Revenue, Net [Member] | Customer A [Member]
Concentration risk, percentage	44.00%
Sales Revenue, Net [Member] | Customer B [Member]
Concentration risk, percentage	29.00%
Sales Revenue, Net [Member] | Customer C [Member]
Concentration risk, percentage	14.00%

ACCOUNTS RECEIVABLE (Details)

ACCOUNTS RECEIVABLE (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Receivables [Abstract]
Accounts receivable	$ 383,141	$ 393,986
Allowance for doubtful accounts		(58,369)
Accounts receivable, net	$ 383,141	$ 335,617

INVENTORY (Details)

INVENTORY (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Inventory Disclosure [Abstract]
Finished products	$ 115,153	$ 120,470
Less reserve for obsolescence
Finished products ,net	$ 115,153	$ 120,470

GOODWILL (Details Narrative)

GOODWILL (Details Narrative)	Jun. 30, 2015USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Fresh-start adjustments	$ 7,042,214
Acquisition of Periodyne	$ 1,163,383

TRIPHARMA SETTLEMENT (Details N

TRIPHARMA SETTLEMENT (Details Narrative) - TriPharma LLC [Member] - USD ($)	Mar. 01, 2015	Nov. 30, 2011
Debt Instrument [Line Items]
Bankruptcy claims amount		$ 4,500,000
Management bankruptcy claims reduction amount		2,500,000
Management bankruptcy claims additional reduction amount		$ 500,000
Bankruptcy claims payment date		March 16, 2016
Bankruptcy claims default increase amount		$ 1,000,000
Bankruptcy claims interest rate		6.00%
Description of Notice of Default		As a result of negotiations as to where payments were to be made in December 2014, a payment that was due on December 1, 2014 was not paid until December 16, 2014 when TriPharma issued a Notice of Default. Although we contend that no default took place and, eventually, the issue may need to be resolved by the Bankruptcy Court.
Repayment of debt	$ 100,000

TRIPHARMA SETTLEMENT (Details)

TRIPHARMA SETTLEMENT (Details)	Jun. 30, 2015USD ($)
Debt Disclosure [Abstract]
2,016	$ 500,000
2,017	450,000
2,018	550,000
2,019	600,000
2,020	50,000
Total	$ 2,150,000

EQUITY TRANSACTIONS (Details Na

EQUITY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended			3 Months Ended
	Apr. 30, 2015	Nov. 30, 2014	Sep. 30, 2014	Jun. 30, 2015
Share price (in dollars per share)	$ 0.16	$ 0.30
Number of common stock issued for services	50,000	100,000
Value of number of common stock issued for services	$ 8,000	$ 30,000		$ 8,000
Restricted Common Stock [Member]
Number of common stock issued			5,228,333
Value of number of common stock issued			$ 1,254,800
Share price (in dollars per share)			$ 0.24
Restricted Common Stock [Member] | Periodyne LLC [Member]
Number of common stock issued			3,400,000
Value of number of common stock issued			$ 1,258,000
Share price (in dollars per share)			$ 0.37
Unrestricted Common Stock [Member]
Number of common stock issued			6,583,333
Value of number of common stock issued			$ 790,000
Share price (in dollars per share)			$ 0.12

EQUITY TRANSACTIONS (Details)

EQUITY TRANSACTIONS (Details) - 3 months ended Jun. 30, 2015 - $ / shares	Total
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning of period	8,409,334
Granted
Cancelled
Exercised
Outstanding at end of the period	8,409,334
Exercisable at end of the the period	8,409,334
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Outstanding at beginning of period	$ 0.62
Granted
Cancelled
Exercised
Outstanding at end of the period	$ 0.62
Exercisable at end of the the period	$ 0.62
Weighted average fair value of warrants granted during the period

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended
	Jun. 30, 2015
Federal Tax Board [Member] | Minimum [Member]
Income Tax Contingency [Line Items]
Open Tax Years	2,011
Federal Tax Board [Member] | Maximum [Member]
Income Tax Contingency [Line Items]
Open Tax Years	2,013
California Franchise Tax Board [Member] | Minimum [Member]
Income Tax Contingency [Line Items]
Open Tax Years	2,011
California Franchise Tax Board [Member] | Maximum [Member]
Income Tax Contingency [Line Items]
Open Tax Years	2,013