U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                FORM 10-KSB

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the fiscal year ended March 31, 2004

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

                       Commission File No. 033-24138-D

                              IMAGENETIX, INC.
                              ----------------
               (Name of small business issuer in its charter)


            Nevada                                  87-0463772
            ------                                  ----------
State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization                   Identification Number)

                   16935 West Bernardo Drive, Suite #101
                        San Diego, California 92127
                        ---------------------------
                  (Address of principal executive offices)

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

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

Securities registered pursuant to Section 12(g) of the Act: None

     Check whether the Company (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

(1) Yes    X      No                (2) Yes    X      No

     Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [X]

     State Company's revenues for its most recent fiscal year: March 31, 2004
- $4,568,264.
                                1
<PAGE>
     State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified date within
the past 60 days.

     On June 30, 2004 there were approximately 3,973,170 shares of common
voting stock of the Registrant beneficially owned by non-affiliates valued at
$4,529,413.80. This valuation is based upon the Company's's closing price of
$1.14 per share on June 30, 2004 for the common stock of the Company
on the OTC Bulletin Board.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

                              Not Applicable.

     Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.  Yes        No
                                                       ---       ---

                   (APPLICABLE ONLY TO CORPORATE ISSUERS)

     State the number of shares outstanding of each of the Company's classes
of common equity, as of the latest practicable date:

                        June 30, 2004 - 8,722,152

                    DOCUMENTS INCORPORATED BY REFERENCE

     See Part III, Item 13.

                                   PART I

Item 1.   Description of Business.

History Development

     We were incorporated under the laws of the State of Nevada on March 28,
1988, under the name "Capital Growth, Inc." In October 2000 we acquired
Imagenetix, Inc., a Colorado corporation and changed our name to "Imagenetix,
Inc."

Our Business

     We are an innovator of scientifically tested, natural-based, proprietary
bioceutical products developed to enhance human and animal health on a global
basis.  We develop, formulate, and private-label, proprietary, leading edge
over the counter topical creams, skin care products, and nutritional
supplements to be marketed globally through multiple channels of distribution.
In addition, we develop patentable compounds for the purpose of entering into
licensing agreements with pharmacueitical partners.

     Historically we have not marketed directly to consumers and have marketed
to organizations  who in turn market the products to consumers through their
own private labels.  We have developed a "turnkey" approach to assist these
organizations with product distribution to consumers.  Distribution of
products by our clients is currently underway through direct selling, mass
marketing, medical, health, nutritional professionals, medical newsletters,
direct response radio, direct response television, and other channels of
distribution.

     Our "turnkey" approach provides:

     *    Specific product formulations requested by our customers;
     *    Scientific studies to support claims made for our products;
     *    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 client.

     Following development of a new nutritional, topical or skin care product,
we:

     *    Conduct and complete any scientific studies necessary for
          regulatory compliance;
     *    Develop marketing tools and plans to promote product sales,
          including labels and graphic designs, promotional brochures and
          providing speakers to promote our customers' products.

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

Customers

     We currently sell over 60 products and formulations to businesses and
organizations that market these products through multiple channels of
distribution, including, direct selling, mass market, direct response
television, direct response radio, newsletters, and medical care
professionals.  Our three largest customers, Nikken, AVON, and Unicity Network
accounted for 30%, 10%, and 10% respectively, of our net sales
for the year ended March 31, 2004.

Our Strategy

     We are a developer, formulator and international supplier of
scientifically tested and natural based products, designed to enhance human
and animal health.  Imagenetix develops, formulates, and private labels over
the counter topical creams, nutritional and skin care products, to be marketed
globally through multiple channels of distribution.  Our strategy also
includes assisting our client base by:

     *    Continuing to develop innovative and proprietary nutritional and
          skin care products;
     *    Continue to offer "turn key" services , including product
          development, regulatory compliance, manufacturing and marketing
          services, to assist our customers in quickly bringing new products
          to market;
     *    Marketing our products internationally by assisting our customers in
          registering their products for sale in foreign countries.

Products

     We offer a variety of specialized proprietary nutritional formulations,
OTC topical creams, and skin care products.  We sell our products tobusinesses
and organizations that market these private labeled products
through multiple channels of distribution including, direct selling, the mass
market, direct response radio, nutritional newsletters, and medical care
professionals.

     Our leading product is Celadrin(TM), 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 years ended March 31, 2004 and 2003, approximately 87% and 84%,
respectively, of our revenue was generated from the sale of various
formulations containing Celadrin(TM).

     A number of safety and efficacy studies have been conducted on
Celadrin(TM)'s principal composition, esterified fatty acids.  Studies have
been presented at international scientific conferences, with two (2) studies
being published in the Journal of Rheumatology (8-02).  In August 2002,
Celadrin pills were published in the Journal of Rheumatology.  In April of
2004, the Celadrin(TM) Topical cream study was conducted by the University of
Connecticut, and was also published in the Journal of Rheumatology on this
date.

     We are conducting ongoing research to deteremine Celadrin(TM)'s effects
on the body, including any role it may play in providing support for the
normal functioning of muscles and joints. We produce a wide range of formulas
using  Celadrin(TM) and market these formulations through multiple
distribution channels. To date, we have sold Celadrin(TM) formulations
primarily to direct distribution companies. Many of our customers
resell Celadrin(TM) containing products under their own labels and
trade names.  Presently, 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(TM), we offer the product to our
customers in soft gel capsule, tablet, two-piece capsules and topical cream
forms.

     We use 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
also have a clinical research consultant, Robert L. Hesslink, Jr. Sc.D., who
offices with us, and consults with us on an active basis. Dr. Hesslink's
background may be found under "Management-Consultants" below. We believe
Celadrin(TM) will be our principal compound in the near future. We intend to
expand the number of customers who use this compound in formulas and to
develop other formulas for new customers.

     In addition to Celadrin(TM), which we sell in many formulations, we have
developed and sell other natural based products designed to address specific
health issues, including unique and scientifically tested compounds and
formulations involving a proprietary blend of fruit and vegetable extracts
which represented approximately 5% of our sales as of March 31, 2004.

Raw Materials and Manufacturing

     We develop proprietary, natural based, nutritional supplements, OTC
topical creams, and skin care products.  We currently purchase ingredients
from suppliers for delivery to manufacturers chosen by us. We have an
agreement with our sole supplier of Celadrin(TM) to purchase sufficient
quantities of the compound to meet our anticipated needs through January 2007.
We believe this agreement can be extended 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 and skin care products. By outsourcing product
manufacture, 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

     Since inception, we have marketed our products to clients in multiple
channels of distribution with initial emphasis placed upon direct selling
distributors. Our marketing strategy consists of:

     *    Continuing to offer our proprietary products to existing customers
          while seeking new customers, emphasizing those engaged in the
          direct distribution and 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, provide marketing
          spokespersons and offering other value added services to assist
          customers in expanding their sales of our product;
     *    Developing and offering new products to direct distribution and
          mass marketing companies.
     *    Offering products for distribution through medical and nutritional
          oriented professionals.
     *    Offering products for direct response radio and television.

     We will continue to offer companies a turn key 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
tailoring our product formulations specifically for each customer, obtaining
approvals in foreign countries for our customers, providing full marketing
support for the products, including product information, product descriptions
and speakers to discuss products at customer conventions.

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.

     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 turn key approach
of offering our customers significant regulatory, marketing and unique,
scientifically validated products provides us with a competitive advantage.

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);
     *    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, 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(TM), was 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(TM). 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.

     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 to
enforcement action for the advertising of its 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 trademarks for "Globestar" and "Celadrin" in April 2000 and
February 2002, respectively.

     In March, 2003 we filed a patent application for Genepril, seeking
approval of claims for the prevention and treatment of various types of
arthritis and other inflammatory joint diseases, as well as psoriasis, lupus,
periodontal and cardiovascular conditions. There can be no assurance that the
patent application will be granted.

Employees

     At March 31, 2004 we had eight full-time employees, including our
executive officers.

Item 2.   Description of Property.

     We lease 5,768 square feet of office space located at 16935 West
Bernardo Drive, Suites 101 and 101A, San Diego, California 92127 pursuant to a
three year lease which expires in January 2006.

Item 3.   Legal Proceedings.

     We have been named as a defendant in one currently pending lawsuit
alleging that a product containing ephedra caused injuries and/or
damages. We deny any and all alleged wrongdoing and intend to vigorously
defend this lawsuit. Although ultimate liability cannot be determined at the
present time, we believe that the amount of any such liability, if any, from
this action will not have a material adverse effect on its results of
operations or financial condition.

Item 4.   Submission of Matters to a Vote of Security Holders.

     None.
                             PART II

Item 5.   Market for Common Equity and Related Stockholder Matters.

Market Information

     Our common stock is traded on the Over the Counter Electronic Bulletin
Board of the National Association of Securities Dealers, Inc. ("NASD") under
the symbol "IAGX." The range of high and low bid quotations for our common
stock during each quarter of the fiscal years ended March 31, 2004 and 2003,
is shown below. Prices are inter-dealer quotations as reported by the NASD and
do not necessarily reflect transactions, retail markups, mark downs or
commissions.

                                               BID

Quarter ended:                      High                  Low

March 31, 2004                     $1.25                $ .90
December 31, 2003                  $1.63                $1.05
September 30, 2003                 $1.98                $ .85
June 30, 2003                      $ .91                $ .64
March 31, 2003                     $ .76                $ .56
December 31, 2002                  $ .81                $ .52
September 30, 2002                 $1.22                $ .72
June 30, 2002                      $1.28                $ .85
March 31, 2002                     $1.28                $ .69

Holders

     We had approximately 300 record holders of our common stock as of June
30, 2004.

Dividends

     We have not declared any cash dividends on our common stock, and do not
intend to declare dividends in the foreseeable future. We intend to use our
available funds for the development of our business. There are no material
restrictions limiting, or likely to limit, our ability to pay dividends on our
common stock.

Securities Authorized For Issuance under Equity Compensation Plans.
-------------------------------------------------------------------

     In August 2000, we adopted a Stock Option Plan (the "Plan") which
provides for the grant of stock options intended to qualify as "incentive
stock options" and "nonqualified stock options" (collectively "stock options")
within the meaning of Section 422 of the United States Internal Revenue Code
of 1986 (the "Code"). Stock options may be issued to any of our officers,
directors, key employees or consultants.

     We have reserved 800,000 shares of common stock for issuance under the
Plan, of which 650,000 options have been granted to executive officers,
employees and consultants at prices ranging from $.86 to $2.00 per share. We
intend to increase the number of shares reserved under the Plan to 1,200,000
shares in the near future. The Plan is administered by the full Board of
Directors, who determine which individuals shall received stock options, the
time period during which the stock options may be exercised, the number of
shares of common stock that may be purchased under each stock option and the
stock option price.

     The per share exercise price of incentive stock options may not be less
than the fair market value of the common stock on the date the option is
granted. The aggregate fair market value (determined as of the date the stock
option is granted) of the common stock that any person may purchase under an
incentive stock option in any calendar year pursuant to the exercise of
incentive stock options will not exceed $100,000. No person who owns, directly
or indirectly, at the time of the granting of an incentive stock option, more
than 10% of the total combined voting power of all classes of our stock is
eligible to receive incentive stock options under the Plan unless the stock
option price is at least 110% of the fair market value of the common stock
subject to the stock option on the date of grant.

     No incentive stock options may be transferred by an optionee other than
by will or the laws of descent and distribution, and, during the lifetime of
an optionee, the stock option may only be exercisable by the optionee. Except
as otherwise determined by the Board of Directors, stock options may be
exercised only if the stock option holder remains continuously associated with
us from the date of grant to the date of exercise. The exercise date of a
stock option granted under the Plan may not be later than ten years from the
date of grant. Any stock options that expire unexercised or that terminate
upon an optionee's ceasing to be employed by us will become available once
again for issuance. Shares issued upon exercise of a stock option will rank
equally with other shares then outstanding. No stock options will be granted
by us at an exercise price less than 85% of the fair market value of the stock
underlying the option on the date the option is granted.

Item 6.   Management's Discussion and Analysis or Plan of Operation.

Preliminary Notes Regarding Forward-Looking Statements

     All forward-looking statements contained herein are deemed by us to be
covered by and to qualify for the safe harbor protection provided by The
Private Securities Litigation Reform Act of 1995 (The "1995 Act").
Shareholders and prospective shareholders should understand that several
factors govern whether any forward-looking statement contained herein will be
or can be achieved. Any one of those factors could cause actual results to
differ materially from those projected herein. These forward-looking
statements include plans and objectives of management for future operations,
including plans and objectives relating to our products and future economic
performance. Assumptions relating to the foregoing involve judgments with
respect to, among other things, future economic, competitive and market
conditions, future business decisions, and the time and money required to
successfully complete development projects, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Although we believe that the assumptions underlying the forward-looking
statements contained herein are reasonable, any of those assumptions could
prove inaccurate and, therefore, there can be no assurance that the results
contemplated in any of the forward-looking statements contained herein will be
realized. Based on actual experience and business developments, the impact of
which may cause us to alter our marketing, capital expenditure plans or other
budgets, which may in turn affect our results of operations in light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of any such statement should not be regarded as a
representation by us or any other person that our objectives or plans will be
achieved.

     We are an innovator of scientifically tested, natural-based, proprietary
bioceutical products developed to enhance human and animal health on a global
basis.  We develop, formulate, and private-label, proprietary, leading edge
over the counter topical creams, skin care products, and nutritional
supplements to be marketed globally through multiple channels of distribution.
In addition, we develop patentable compounds for the purpose of entering into
licensing agreements with pharmacueitical partners.

     Rather than market products directly to consumers, we currently market to
business organizations who in turn market the products to consumers through
their own private labels.  We have developed a "turnkey" approach to assist
these organizations with product distribution to consumers.  Distribution of
products by our clients is currently underway through direct selling, mass
marketing, medical, health, and nutritional professionals, medical
newsletters, direct response radio, direct response television, and other
channels of distribution.

Results of Operations

Year Ended March 31, 2004 compared to March 31, 2003

     For the fiscal year ended March 31, 2004, net sales of $4,568,264
increased $1,159,206 or 34%, compared to net sales of $3,409,058 for fiscal
year ended March 31, 2003. The increase was primarily due to new clients
purchasing our topical cream products.

     Our strategy for future growth is to continue to focus on adding new
clients in new channels of distribution, such as mass market, medical
professionals, and direct consumer response television and radio marketing.

     During the fiscal year ended March 31, 2004, we experienced a decrease
in the cost of goods sold as a percentage of sales, to 53% compared to 63% for
the fiscal year ended March 31, 2003. The decrease in cost of goods sold
reflects a higher sales mix in the category of Celadrin(TM) topical cream
products, which have significantly lower production costs.

     Selling, general, and administrative expenses for the fiscal year ended
March 31, 2004, were $1,576,371, compared to $1,957,044 for fiscal year ended
March 31, 2003. The expense decrease was due primarily  to a non-cash expense
relating to the issuance of common stock purchase warrants in the amount of
$408,327.

     We had a net profit for the fiscal year ended March 31, 2004 of
$465,043 compared to a net loss of $775,484 for the prior year ended March
31, 2003.  Net income per common share was $.05 for fiscal 2004 compared to a
net loss per common share of $(.09) for 2003. The net loss for the prior year
ending March 31, 2003 included a non-cash expense associated with the issuance
of common stock purchase warrants which accounted for $408,327 or $(.05) per
share of the loss.

Year Ended March 31, 2003 compared to March 31, 2002

     For the fiscal year ended March 31, 2003, net sales of $3,409,058
decreased $1,034,684 or 23%, compared to net sales of $4,443,742 for fiscal
year ended March 31, 2002. The decrease was primarily due to the reduction of
orders from existing clients.

     Our strategy for future growth is to continue to focus on adding new
clients in additional channels of distribution, such as mass market, medical
professionals, and direct consumer response television and radio marketing.

     During the fiscal year ended March 31, 2003, we experienced a decrease
in the cost of goods sold as a percentage of sales, to 63% compared to 70% for
the fiscal year ended March 31, 2002. The decrease in cost of goods sold
reflects a higher sales mix in the category of Celadrin(TM) related products,
including our topical cream products, which have lower production costs.

     Selling, general, and administrative expenses for the fiscal year ended
March 31, 2003, were $1,957,044, compared to $1,544,591 for fiscal year ended
March 31, 2002. The expense increase was due to a combination of product
studies and a non-cash expense relating to the issuance of common stock
purchase warrants in the amount of $408,327.

     We had a net loss for the fiscal year ended March 31, 2003 of $775,484
compared to a net loss of $256,037 for the prior year ended March 31, 2002.
Net loss per common share was $(.09) for fiscal 2003 compared to a net loss
per common share of $(.03) for 2002. The net loss included a non-cash expense
associated with the issuance of common stock purchase warrants which accounted
for $408,327 or $(.05) per share of the loss.

Liquidity and Capital Resources.

     We have historically financed our operations through debt and equity
financings.

     At March 31, 2004, we had cash holdings of $454,377, an increase of
$190,449 compared to March 31, 2003. Our net working capital position at March
31, 2004, was $1,434,207 compared to $811,370 as of March 31, 2003.

     We have a single source and exclusive supplier arrangement with our
Celadrin(TM) supplier. We use Celadrin(TM) in approximately 80% of our
products representing approximately 87% of our sales for the year ended March
31, 2004. The interruption of raw material from this supplier would adversely
affect our business and financial condition.

     Although our client base is growing, the loss of any of our three largest
customers would have a material adverse effect on our revenue and earnings.

     We believe that our cash position is sufficient to fund our operating
activities for at least the next 12 months.

Item 7.   Financial Statements.

<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

                CONSOLIDATED FINANCIAL STATEMENTS

                          MARCH 31, 2004
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY




                             CONTENTS

                                                            PAGE

          Independent Auditors' Report                           1


          Consolidated Balance Sheet, March 31, 2004             2


          Consolidated Statements of Operations, for the
          years ended March 31, 2004 and 2003                    3


          Consolidated Statement of Stockholders' Equity,
          for the years ended March 31, 2004 and 2003            4

          Consolidated Statements of Cash Flows, for the
          years ended March 31, 2004 and 2003                5 - 6

          Notes to Consolidated Financial Statements        7 - 19
<PAGE>





                  INDEPENDENT AUDITORS' REPORT



Board of Directors
IMAGENETIX, INC. AND SUBSIDIARY
San Diego, California

We have audited the accompanying consolidated balance sheet of Imagenetix,
Inc. and Subsidiary at March 31, 2004, and the related consolidated statements
of operations, stockholders' equity, and cash flows for the years ended March
31, 2004 and 2003.  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 audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements audited by us present
fairly, in all material respects, the consolidated financial position of
Imagenetix, Inc. and Subsidiary as of March 31, 2004, and the results of their
operations and their cash flows for the years ended March 31, 2004 and 2003,
in conformity with generally accepted accounting principles in the United
States of America.


/S/Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.

June 20, 2004
Salt Lake City, Utah
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY


                    CONSOLIDATED BALANCE SHEET

                              ASSETS
                                                            March 31,
                                                              2004
                                                           ___________
CURRENT ASSETS:
  Cash                                                    $    454,377
  Accounts receivable, net                                     803,832
  Inventory, net                                               986,052
  Employee receivable                                            5,000
                                                           ___________
        Total Current Assets                                 2,249,261

PROPERTY AND EQUIPMENT, net                                     64,639

OTHER ASSETS                                                    90,838
                                                           ___________
                                                          $  2,404,738
                                                           ___________

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                        $    356,393
  Accrued liabilities                                           40,440
  Customer deposits                                             89,092
  Income tax payable                                           104,129
  Line of credit   related party                               225,000
                                                           ___________
        Total Current Liabilities                              815,054

                                                           ___________
        Total Liabilities                                      815,054
                                                           ___________

STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 5,000,000 shares
   authorized, no shares issued and outstanding                      -
  Common stock, $.001 par value, 50,000,000 shares
   authorized, 8,722,152 shares issued and outstanding           8,722
  Capital in excess of par value                             2,440,720
  Retained earnings (deficit)                                 (859,758)
                                                           ___________
        Total Stockholders' Equity                           1,589,684
                                                           ___________
                                                          $  2,404,738
                                                           ___________


The accompanying notes are an integral part of this consolidated financial
                           statement.
<PAGE>
                IMAGENETIX, INC. AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF OPERATIONS


                                                        For the
                                                      Year Ended
                                                       March 31,

                                               __________________________
                                                    2004       2003
                                               ___________    ___________
NET SALES                                     $  4,568,264   $  3,409,058

COST OF GOODS SOLD                               2,413,145      2,148,331
                                               ___________    ___________
GROSS PROFIT                                     2,155,119      1,260,727
                                               ___________    ___________
EXPENSES:
  General and administrative                       805,572        803,944
  Payroll expense                                  496,347        388,178
  Consulting Expense                               274,452        764,922
                                               ___________    ___________
        Total Expenses                           1,576,371      1,957,044
                                               ___________    ___________
INCOME (LOSS) FROM OPERATIONS                      578,748       (696,317)
                                               ___________    ___________
OTHER INCOME (EXPENSE):
  Interest expense   related party                 (27,000)       (79,322)
  Interest expense                                  (2,753)             -
  Other income                                           4            155
                                               ___________    ___________
        Total Other Income (Expense)               (29,749)       (79,167)
                                               ___________    ___________
LOSS BEFORE INCOME TAXES                           548,999       (775,484)

CURRENT TAX EXPENSE (BENEFIT)                       83,956              -

DEFERRED TAX EXPENSE (BENEFIT)                           -              -
                                               ___________    ___________
NET INCOME (LOSS)                              $   465,043    $  (775,484)
                                               ___________    ___________

BASIC INCOME (LOSS) PER SHARE                  $       .05    $      (.09)
                                               ___________    ___________

DILUTED INCOME (LOSS) PER SHARE                $       .04   $        N/A
                                               ___________    ___________


The accompanying notes are an integral part of these consolidated financial
                           statements.
<PAGE>
                IMAGENETIX, INC. AND SUBSIDIARY

         CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

          FOR THE YEARS ENDED MARCH 31, 2004 and 2003


                             Common Stock           Capital in
                     _______________________        Excess of
                                                                 Retained
                     Shares           Amount        Par Value    Earnings
                     _______________________________________________________
BALANCE, March
31, 2002                 8,550,000     8,550         1,862,213    (549,317)

Issuance of warrants to
purchase 600,000 shares
of common stock, for
consulting services
rendered                         -         -           408,327           -

Exercise of warrants to
purchase common stock at
$1.00 per share                 21         -                21           -

Issuance of common stock
for services valued at
$3,200 or $.64 per share     5,000         5             3,195           -

Net (loss) for the
year ended March
31, 2003                         -         -                 -    (775,484)
                    ________________________________________________________
BALANCE, March
31, 2003                 8,550,021    $8,555        $2,273,756 $(1,324,801)

Exercise of warrants
to purchase common
stock at $1.00 per
share                      167,131       167           166,964           -

Net income (loss) for
the year ended March
31, 2004                         -         -                 -     465,043
                    ________________________________________________________
BALANCE, March 31,
2004                     8,722,152    $8,722        $2,440,720 $  (859,758)
                    ________________________________________________________



The accompanying notes are an integral part of this consolidated financial
                           statement.
<PAGE>
                IMAGENETIX, INC. AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF CASH FLOWS

        Increase (Decrease) in Cash and Cash Equivalents


                                                        For the
                                                       Years Ended
                                                        March 31,

                                              ____________________________
                                                   2004          2003
                                              _____________  _____________
Cash Flows from Operating Activities:
  Net loss                                    $     465,043  $    (775,484)
  Adjustments to reconcile net loss to
    net cash used by operating activities:
    Depreciation & amortization expense              32,129         30,946
    Non-cash expense                                      -        411,527
    Change in allowance for bad debt                 24,832         58,589
    Change in allowance for obsolete inventory       31,261         53,000
    Changes in assets and liabilities:
      (Increase) in account receivable             (213,252)      (104,262)
      (Increase) decrease in employee receivable          -         (5,000)
      (Increase) decrease in inventory             (317,220)       287,516
      Decrease in prepaid expenses                        -          5,000
      Increase (decrease) in accounts payable       (91,104)       (65,495)
      Increase in accrued liabilities                14,356          5,275
      Increase (decrease) in customer deposits       63,383        (17,444)
      Increase (decrease) in income tax payable      83,956         (1,957)
                                              _____________  _____________
        Net Cash (Used) by Operating Activities      93,384       (117,789)
                                              _____________  _____________
Cash Flows from Investing Activities:
  Acquisition of office equipment                         -         (4,630)
  Change in other assets                            (41,093)        32,107
                                              _____________  _____________
        Net Cash (Used) by Investing Activities     (41,093)        27,477
                                              _____________  _____________
Cash Flows from Financing Activities:
  Net proceeds from line of credit   related party        -         52,695
  Payments on notes payable   related party         (25,890)             -
  Proceeds on notes payable   related party               -            174
  Proceeds from exercise of warrants                167,131             21
  Payments on lease liabilities                      (3,085)        (2,634)
                                              _____________  _____________
        Net Cash Provided by Financing Activities   138,156         50,256
                                              _____________  _____________
Net  Decrease in Cash                               190,447        (40,056)

Cash at Beginning of Period                         263,930        303,986
                                              _____________  _____________
Cash at End of Period                         $     454,377  $     263,930
                                              _____________  _____________


                           [Continued]
<PAGE>
                IMAGENETIX, INC. AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF CASH FLOWS

                          [Continued]
                                                        For the
                                                      Year Ended
                                                        March 31,

                                              ____________________________
                                                   2004          2003
                                               _____________  _____________

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for:
    Interest                                   $      32,253  $     29,239
    Income taxes                               $           -  $          -

Supplemental Schedule of Non-cash Investing and Financing Activities:
  For the year ended March 31, 2004:
     None

  For the year ended March 31, 2003:
     In February 2003, the Company issued 5,000 shares of common stock for
     services rendered valued at $3,200, or $.64 per share.

     In April 2002, the Company issued warrants to purchase 600,000 shares of
     common stock at $1.10 per share to a consultant of the Company for
     services rendered. The fair value of the warrants was $408,327.

     In October 2001, the Company issued warrants to purchase 250,000 shares
     of common stock at $.70 per share to shareholders of the Company who
     provided a line of credit to the Company. Of the $97,896 fair value
     recorded for these warrants, $48,948 was recorded as interest expense in
     the year ended March 31, 2002 and $48,948 was recorded as interest
     expense in the year ended March 31, 2003.

     In April 2001, the Company issued options to purchase 100,000 shares of
     common stock at $.86 per share. The Company recorded expense of $77,634
     related to the granting of these options.

The accompanying notes are an integral part of these consolidated financial
                           statements.
<PAGE>
                IMAGENETIX, INC. AND SUBSIDIARY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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; and its subsidiary Imagenetix, Inc
["Subsidiary"] organized under the laws of the state of Colorado on July 26,
1996 and its subsidiary Imagenetix ["Imagenetix CA"] organized under the laws
of the State of California on January 7, 1999, ["The Company"]. The Company is
engaged in the business of developing and marketing nutritional supplements
and skin care products.

On March 23, 1999, Subsidiary completed an exchange agreement with Imagenetix
CA wherein Subsidiary issued 3,900,000 shares of 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. After giving effect to the preceding
transaction, the parent had 8,550,000 shares of common stock, 3,183,750
warrants, and 525,000 options outstanding. In connection with the reverse
acquisition, the Parent changed its name to Imagenetix, Inc.

The Company has, at the present time, not paid any dividends, and any
dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors.

Consolidation   All significant intercompany transactions between the Parent,
Subsidiary, and Imagenetix CA 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 effect 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 and Cash Equivalents - For purposes of the financial statements, the
Company considers all highly liquid debt investments purchased with a maturity
of three months or less to be cash equivalents. At various times throughout
the year, the Company has exceeded federally insured limits. At March 31,
2004, the Company had $163,930 in cash balances in excess of federally insured
limits.

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 collectibility 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.

Inventory   Inventory is carried at the lower of cost or market. Cost is
determined by the first-in first-out method.
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]

Property and Equipment   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 for financial statement purposes using the straight-
line method over the estimated useful lives of the assets ranging from 5 to 7
years.

Trademarks   Costs of purchasing trademarks are amortized on a straight-line
basis over 17 years.

Stock Based Compensation   The Company accounts for its stock based
compensation in accordance with Statement of Financial Accounting Standard
("SFAS") No. 123 "Accounting for Stock-Based Compensation." This statement
establishes an accounting method based on the fair value of equity instruments
awarded to employees as compensation. However, companies are permitted to
continue applying previous accounting standards in the determination of net
income with disclosure in the notes to the financial statements of the
differences between previous accounting measurements and those formulated by
the new accounting standard. The Company has adopted the disclosure only
provisions of SFAS No. 123, and accordingly, the Company has elected to
determine net income using previous accounting standards. Equity instruments
issued to non-employees are valued based on the fair value of the services
received or the fair value of the equity instruments given up which ever is
more reliably measurable.

Revenue Recognition   Revenue is recognized when the product is shipped. The
Company evaluates whether an allowance for estimated returns is required based
on historical returns. The Company has not had significant returns and
accordingly, has not established an estimated allowance for returns at March
31, 2004.

Income Taxes   The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes."  This statement requires an asset and liability approach for
accounting for income taxes [See Note 11].

Earnings (Loss) Per Share - The computation of earnings (loss) per share is
based on the weighted average number of shares outstanding during the period
presented in accordance with Statement of Financial Accounting Standards No.
128, "Earnings (Loss) Per Share" [See Note 12].

Reclassification - The financial statements for periods prior to March 31,
2004 have been reclassified to conform to the headings and classifications
used in the March 31, 2004 financial statements.
<PAGE>
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]

Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards ("SFAS") No. 149, "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities", and SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity",
were recently issued.  SFAS No. 149 and 150 have no current applicability to
the Company or their effect on the financial statements would not have been
significant.

NOTE 2   ACCOUNTS RECEIVABLE

Accounts receivable are carried at the expected realizable value. Accounts
receivable consisted of the following:
                                                       March 31,
                                                        2004
                                                     __________
          Accounts receivable - trade                $  942,579
          Allowance for doubtful accounts              (138,747)
                                                     __________
                  Accounts receivable, net           $  803,832
                                                     __________

The Company has pledged its accounts receivable as collateral against a line
of credit. [See Note 7]

NOTE 3   INVENTORY

Inventory consists of the following at:
                                                       March 31,
                                                         2004
                                                     ___________
          Raw Materials                      $          857,014
          Finished product                               38,080
          Boxes, labels, tubes, & bottles               200,519
          Reserve for obsolete inventory               (109,561)
                                                     __________
                  Total Inventory            $          986,052
                                                     __________

The Company has pledged its inventory as collateral against a line of credit.
[See Note 7]
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - PROPERTY AND EQUIPMENT

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

                                                March 31,
                                                  2004
                                               __________
       Lease-hold improvements              $    45,807
       Office equipment                         110,597
       Leased equipment                          21,341
       Less accumulated depreciation           (113,106)
                                             __________
                                           $     64,639
                                             __________

Depreciation expense for the year ended March 31, 2004 and 2003 was $29,676
and $29,365, respectively.

The Company has pledged its property and equipment as collateral against a
line of credit. [See Note 7]

NOTE 5   OTHER ASSETS

The following is a summary of intangible assets which are included in "Other
Assets" on the face of the balance sheet:
                                                         March 31,
                                                           2004
                                                         __________
       Trademarks                                        $   10,866
       Patent                                                24,917
       Globestar                                              3,675
       Less Amortization                                     (5,320)
                                                         __________
                                                         $   34,138
                                                         __________

For the year ended March 31, 2004 and 2003 amortization expense was $2,453 and
$1,581, respectively.

Deposits - The Company has also made deposits of prepaid rent for its
corporate offices. At March 31, 2004 and 2003 the amounts included in "Other
Assets" on the face of the balance sheet was $16,700.

Prepaid expenses - At March 31, 2004, the Company has prepaid legal fees to a
legal consultant in the amount $2,500 which is included in "Other Assets" on
the face of the balance sheet.

The Company has prepaid advertising in the amount of $37,500 at March 31,
2004, which is included in "Other Assets" on the face of the balance sheet.
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6   LINE OF CREDIT   RELATED PARTY

In October 2001, the Company entered into a line of credit agreement with two
principal shareholders. The shareholders agreed to provide a line of credit in
the amount of $1,000,000. The balance on the line of credit accrues interest
at a rate of 12% per annum. The line of credit is for working capital needs
and is secured with the Company's assets. The line of credit expired on
September 30, 2002. The Company issued warrants to purchase 250,000 shares of
common stock at $.70 per share to the shareholders as an incentive for the
line of credit agreement. The warrants have a five- year life and vested
immediately. The warrants were valued at $97,896 and are being amortized over
the life of the line of credit.

At March 31, 2004, the balance owing on the line of credit was $225,000.
During the year ended March 31, 2004 and 2003 the Company recorded interest
expense of $27,000 and $25,295 in connection with the line.

The Company has verbally negotiated extension of terms on the line of credit.
The verbal agreement changes the terms on the line of credit to a month to
month basis.

NOTE 7   LEASES OBLIGATIONS

Capital Lease   The following schedule details equipment purchased under
capital leases as of:
                                                            March 31,
                                                              2004

                                                           ___________
          Leased equipment                                 $    21,341
          Less accumulated depreciation                        (20,963)
                                                           ___________
                                                           $       378
                                                           ___________
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7   LEASES OBLIGATIONS [Continued]

Depreciation expense on capital leases for the year ended March 31, 2004 and
2003 amounted to $4,277 and $4,257, respectively.

Operating Lease   The Company has entered into a building lease for its
office. The lease on the facility expired on December 31, 2002, and was
extended by mutual agreement for an additional three years. Lease expense for
the years ended March 31, 2004 and 2003 amounted to $200,400 and $160,091,
respectively. The following is a schedule of minimum annual rental payments
for the next five years.

                                                        Minimum Annual
                March 31,                               Rental Payments
               __________                                _____________
                  2004                          $              208,200
                  2005                                         216,600
                  2006                                               -
                  2007                                               -
                  2008                                               -
                                                         _____________
                                                $              424,800
                                                         _____________

Sublease   The Company verbally entered into a building sublease agreement
with a legal consultant of the Company, wherein the consultant would share
some of the Company's office space. The agreement is for $1,600 per month on a
month-to-month basis. At March 31, 2004, the Company has recorded  $23,323 in
prepaid legal services.
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8   COMMITMENTS AND CONTINGINCIES

Consulting agreement   The Company entered into a spokesperson agreement with
Tony and Alicia Gwynn on April 16, 2001.  Under the agreement Tony and Alicia
Gwynn agreed to endorse the Company's products through personal appearances,
video, television, and print ads for a period of two years. The agreement
calls for payment of $28,000 in April 2001 and payments of $6,000 per month
for twenty-four months for a total of $172,000 over the two-year period. The
Company also issued options to purchase 100,000 shares of common stock
exercisable at $.86 per share. The options vest immediately and are scheduled
to be exercisable at 50,000 on April 15, 2002 and 50,000 on April 15, 2003.
The Company recorded the fair value of $77,634 for the options as marketing
expense. The Company also issued options to purchase 25,000 shares of common
stock at $1.00 per share, to an attorney, which vest immediately and expire
after a five-year period. The fair value of $22,570 had been recorded as legal
expense.

During the year ended March 31, 2004 and 2003, the Company expensed $0 and
$72,000, respectively, related to this agreement.

Contingencies - The Company is 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 the financial position of the Company.

Other agreements - The Company routinely enters into contracts and agreements
with suppliers, manufacturers, consultants, product marketing, and sales
representatives in the normal course of doing business. These agreements are
generally short term and are normally limited to specific products and
marketing opportunities.

NOTE 9   CAPITAL STOCK

Preferred Stock - The Company has 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, 2004.

Common Stock   The Company has authorized 50,000,000 shares of common stock at
$.001 par value. At March 31, 2004, the Company had 8,722,152 shares of common
stock issued and outstanding.

During the year ended March 31, 2004, the Company issued 167,131 shares of
common stock for proceeds of $167,131. The shares were issued upon a
shareholder exercising warrants at $1.00 per share.

Stock Bonus Plan   During the year ended March 31, 2000, the board of
directors of the Company adopted a stock bonus plan. The plan provides for the
granting of awards of up to 724,500 shares of common stock to officers,
directors, consultants and employees. Awards under the plan will be granted as
determined by the board of directors. At present, 499,500 shares have been
granted under the plan.
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9   CAPITAL STOCK [Continued]

Warrants   A summary of the status of the warrants granted under various
agreements at March 31, 2004 and 2003, and changes during the years then ended
is presented below:

                                     March 31, 2004       March 31, 2003
                               _______________________ _______________________
                                      Weighted Average        Weighted Average
                               Shares   Exercise Price Shares   Exercise Price
                               ________ ______________ _______ _______________
  Outstanding at beginning of
  period                      4,178,729  $        1.22 3,578,750  $       1.24
  Granted                             -  $           -   600,000  $       1.10
  Exercised                    (167,131)          1.00        21          1.00
  Forfeited                           -              -         -             -
  Expired                             -              -         -             -
                               ________ ______________ _________ _____________
  Outstanding at end of
  Period                      4,011,598  $        1.18 4,178,729  $       1.22
                               ________ ______________ _________ _____________
  Weighted average fair value
  of options granted during
  the year                       -  $             -      -  $      -
                               ________ ______________ _________ _____________
  Weighted average fair value
   of options granted during
   the year                           -  $         -   600,000  $        .68
                              ________ ______________ _________ _____________

The fair value of warrants granted is estimated on the date granted using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for grants during the years ended March 31, 2003 risk-free
interest rates of 4.01% and 4.82%, expected dividend yields of zero, expected
life of 5 years, and expected volatility 116% and 66%, respectively.

A summary of the status of the warrants granted under the various agreements
at March 31, 2004, are presented in the table below:

                          Warrants Outstanding         Warrants Exercisable
            _______________________________________ _________________________
                                           Weighted-
  Range of               Weighted-Average   Average          Weighted-Average
  Exercise     Number       Remaining      Exercise   Number      Exercise
   Prices    Outstanding Contractual Life   Price   Exercisable    Price
  _________ ____________ ________________ _________ __________ ______________
  $   .70        250,000        2.5 years $     .70    250,000 $       .70
  $1.00-1.10   2,886,598        1.75 years$    1.05  2,886,598 $      1.05
  $1.75-2.00     875,000        1.5 years $    1.96    875,000 $      1.96
             -----------                            ----------
               4,011,598                             4,011,598

  Warrants to purchase 1,316,598 shares at $1.00 per share, 750,000 shares at
  $2.00 per share and 125,000 shares at $1.75 per share are redeemable at
  $.01 per warrant at the option of the Company if there is an effective
  registration of the securities and the closing bid or selling price of the
  Company's common stock for 10 consecutive trading days equal three times
  the exercise price of the warrants.
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9   CAPITAL STOCK [Continued]

During the year ended March 31, 2003, the Company granted warrants to purchase
600,000 common shares at $1.10 per share to a consultant for services valued
at $408,327.

Stock Option Plan   In October 2000, the Company adopted a Stock Option Plan
which provides for the granting of stock options intended to qualify as
"incentive stock option" and "nonqualified stock options" within the meaning
of Section 422 of the United States Internal Revenue Code of 1986. Under the
Plan, stock options may be issued to any officer, director, key employees, or
consultants.

Stock Options   During the period presented in the accompanying financial
statements, the Company has granted options under the 2000 Stock Option Plan
(the Plan), and other agreements. The Company accounts for stock options in
accordance Statement of Financial Accounting Standards No. 123. "Accounting
for Stock-Based Compensation."  For stock options issued to employees and
directors the Company has elected the disclosure-only provisions of SFAS 123.
Options issued to all others are valued at their fair values and expensed over
their respective vesting periods.

A summary of the status of the options granted under the Company's 2000 stock
option plans and other agreements at March 31, 2004 and 2003, and changes
during the years then ended is presented below:

                                    March 31, 2004          March 31, 2003
                               _______________________ ______________________
                                      Weighted Average       Weighted Average
                               Shares   Exercise Price Shares  Exercise Price
                               _______ _______________ ______ _______________
 Outstanding at beginning of
 period                        650,000 $          1.44 650,000 $         1.44
 Granted                             -               -       -              -
 Exercised                           -               -       -              -
 Forfeited                           -               -       -              -
 Expired                             -               -       -              -
                               ------- --------------- ------- --------------
 Outstanding at end of Period  650,000 $          1.44 650,000 $         1.44
                               ------- --------------- ------- --------------
 Weighted average fair value
 of options granted during the
 year                                - $             -       - $            -
                               ------- --------------- ------- --------------

The fair value of warrants granted is estimated on the date granted using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for grants during the year ended March 31, 2002, risk-free
interest rates of 4.76%  expected dividend yields of zero, expected life of 5
years, and expected volatility 143%.
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9   CAPITAL STOCK [Continued]

A summary of the status of the options granted under the stock option plan and
other agreements at March 31, 2004, are presented in the table below:

                            Options Outstanding           Options Exercisable
            _______________________________________ _________________________
                                           Weighted-
  Range of               Weighted-Average   Average          Weighted-Average
  Exercise     Number       Remaining      Exercise   Number      Exercise
   Prices    Outstanding Contractual Life   Price   Exercisable    Price
  _________ ____________ ________________ _________ __________ ______________
  $.86-1.00  350,000        2.00 years     $    .96   350,000    $    .98
  $  2.00    300,000        6.75 years     $   2.00   300,000    $   2.00
            ------------                            ----------
             650,000                                  650,000

NOTE 10 - INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109. SFAS No. 109 requires the Company to
provide a net deferred tax asset or liability equal to the expected future tax
benefit or expense of temporary reporting differences between book and tax
accounting and any available operating loss or tax credit carryforwards. The
Company has a federal net operating loss carryover of approximately $0 and a
state net operating loss carryover of approximately $481,709 at March 31,
2004.

At March 31, 2004 and 2003, the total of all deferred tax assets was
approximately $169,000 and $299,000, respectively. The total of all deferred
tax liabilities was $0 and $0, respectively. The amount of and ultimate
realization of the benefits from the deferred tax assets for income tax
purposes is dependent, in part, upon the tax laws in effect, the Company's
future earnings, and other future events, the effects of which cannot be
determined. Because of the uncertainty surrounding the realization of the loss
carryforwards the Company has established a valuation allowance of
approximately $169,000. The net change in the valuation allowance for the year
ended March 31, 2004 was an decrease of approximately $130,000.

The temporary differences gave rise to the following deferred tax asset
(liability):

                                                  March 31,  March 31,
                                                      2004      2003
                                                  __________________
       Excess of tax over financial
         accounting depreciation                  $ 20,200  $ 11,687
       Allowance for obsolete inventory             46,936    33,415
       Allowance for bad debt                       59,439    48,800
       Net operating loss carryover - state         42,583    49,256
       Net operating loss carryover - federal            -   154,232
       Contribution carryover                            -     2,041
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - INCOME TAXES [Continued]

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

                                                  March 31,  March 31,
                                                      2004      2003
                                                  __________________
       Computed tax at the expected
         federal statutory rate                       34.00%     34.00%
       State income taxes, net of federal benefit      5.43       5.83
       Compensation due to options/warrants               -     (23.48)
       Valuation allowance                           (23.73)    (17.67)
       Other                                           (.41)      1.32
                                                    __________________
       Effective income tax rates                     15.29%      0.00%
                                                    __________________

The components of federal income tax expense from continuing operations
consisted of the following for the year ended:

                                                  March 31,  March 31,
                                                      2004      2003
                                                  __________________
       Current income tax expense:
             Federal                              $  28,884  $     -
             State                                   55,072        -
                                                  __________________
       Net current tax expense                    $  83,956  $     -
                                                  __________________

       Deferred tax expense (benefit) resulted from:
        Excess of tax over financial accounting
          depreciation                            $  (8,513) $(7,188)
        Contribution carryover                        2,041     (418)
        Net operating loss                          160,905  (84,954)
        Valuation allowance                        (130,273) 137,010
        Allowance for obsolete inventory            (13,521) (21,112)
        Allowance for bad debts                     (10,639) (23,338)
                                                  _________ ________
       Net deferred tax expense                   $       - $      -
                                                  _________ ________

Deferred income tax expense results primarily from the reversal of temporary
timing differences between tax and financial statement income.
<PAGE>
                 IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11   LOSS PER SHARE

The following data show the amounts used in computing (loss) per share of
common stock for the period presented:
                                                   For the Year Ended
                                                        March 31,
                                                    ___________________
                                                     2004       2003
                                                   _________  _________

   Loss available to common shareholders
     (Numerator)                                   $ 465,043  $(775,484)
                                                   _________  _________

   Weighted average number of common shares
    outstanding used in loss per share during
    the period (Denominator)                       8,641,792  8,550,616
                                                   _________  _________

  Weighted average number of common shares
          outstanding used in diluted income (loss)
     per share during the period (Denominator)    10,366,451      N/A
                                                  __________ __________


Diluted earnings (loss) per share were not presented as its effect would be
anti-dilutive. At March 31, 2004, the Company had options to purchase 300,000
shares of common stock at a price of $2.00 per share and warrants to purchase
875,000 shares of common stock at prices ranging from $1.75 to $2.00 per share
that were not included in the computation of loss per share because their
effects are anti-dilutive.

NOTE 12   RELATED PARTY TRANSACTIONS

Sales - During the years ended March 31, 2004 and 2003, a customer in which
the President of the Company owns approximately 15%, accounted for
approximately 0% and 10%, respectively of the Company's total sales.

Line of credit   Two shareholders of the Company agreed to provide the Company
with a $1,000,000 line of credit. The balance of the line of credit accrues
interest at a rate of 12% per annum and expired in September 2002. At March
31, 2004, the line of credit had a balance of $225,000. During the year ended
March 31, 2004 and 2003, the Company expensed $27,000 and $25,295,
respectively in interest related to the line of credit.
<PAGE>
                IMAGENETIX, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13   CONCENTRATIONS

Sales   During the year ended March 31, 2004, the Company had three
significant customers which accounted for 30%, 10%, and 10% and of sales.

During the year ended March 31, 2003, the Company had three significant
customers which accounted for 46%, 10%, and 10% and of sales.

Supplier - The Company also has a single source and exclusive supplier
arrangement with the supplier of a specific raw material, which is used as
part of products which accounts for approximately 80% of the Company's sales.
The interruption of raw materials provided by this supplier or the loss of a
significant customer would adversely affect the Company's business and
financial condition.

Accounts Receivable   At March 31, 2004, the Company had three customers which
accounted for 44%, 13%, and 10% of the Company's accounts receivable balances.
<PAGE>

Item 8.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

     None; not applicable.

Item 8(a).  Controls and Procedures.
------------------------------------

          As of the end of the 90 day period at the end of this Annual Report,
we carried out an evaluation, under the supervision and with the participation
of our President and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures.  Based on this
evaluation, our President and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information required to be included in our periodic reports that are
filed with the Securities and Exchange Commission.  It should be noted that
the design of any system of controls is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions, regardless of how remote.  In addition, we reviewed our internal
controls, and there have been no significant changes in our internal controls
or in other factors that could significantly affect those controls subsequent
to the date of their last evaluation.

                             PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.

Directors and Executive Officers

     Our directors and executive officers are as follows:

     Name                            Age   Position
William P. Spencer                    50   Chief Executive Officer, President
                                           and Director
Debra L. Spencer                      51   Secretary, Treasurer and Director
Patrick S. Millsap                    50   Vice President - Marketing
Derek C. Boosey                       60   Vice President - International
Barry King                            59   Director

     The business experience of each of our executive officers and directors
is set forth below.

     William P. Spencer has served as our president since January 1999. From
January 1986 until 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 until October 1998 and was a director from January 1986 until October
1998. From 1976 to 1988, he was a regional vice president for San Diego Trust
and Savings Bank. Mr. Spencer owns approximately 15% of the outstanding common
stock of Integris, one of our larger customers. Integris is a network
marketing company offering a variety of health oriented and other products and
has been a customer of ours since early 1999. Mr. Spencer earned a B.S. degree
in finance and an MBA degree from San Diego State University.

     Debra L. Spencer has served as our secretary and treasurer since March
of 1999. Her responsibilities also include graphics layout and development of
marketing material for our private label products. From 1994 to February 1999,
she was a homemaker. From 1987 to 1993, she served as vice president,
secretary and treasurer for Vitamin Direct, Inc., a consumer mail order
vitamin company. At Vitamin Direct, she was responsible for developing
marketing material, generating leads, and customer relations for over 25,000
Vitamin Direct customers.

     Patrick S. Millsap has served as vice-president of marketing since May
1999. From January 1990 until May 1999, he was employed by Natural
Alternatives International, Inc. as a senior account manager. From 1988 to
1990, Patrick Millsap was director of marketing for Sonergy, Inc., a vitamin
distributor. Patrick Millsap graduated in 1990 from San Diego State University
with a B.A. degree in history. He received a certificate of international
business from the University of San Diego in 1996.

     Derek C. Boosey has served as our vice-president-international since
September 1999. From 1994 to September 1999, he was new business manager for
National Alternatives International, Inc., and from 1990 to 1994 was director
of marketing for Atheletics Canada. From 1984 to 1990, Mr. Boosey was a
technical advisor to the Korean Ministry of Sports and a sports and marketing
consultant for MKC International. He earned degrees in physical education from
Keele University (England) and Opu University (England) and is the Senior
Olympics world record holder in the triple jump in the age 55 to 60 class.

     Barry King joined our board in 2003.  He has been the Director of
Marketing for the United States Olympic Committee from 1987 to 2002.  From
1976 to 1977, he was the executive officer for the Whitaker Corporation
directing a multi-million dollar sports development program.  His publications
include the Olympic Challenge published in association with the United States
Olympic Committee and the Olympic Challenge 1988.  He was also the technical
director of the motion picture, the World's Greatest Athlete, Walt Disney
1972.  Mr. King graduated with a B.A. degree from the University of Colorado
in 1969.  Since 2002, Mr. King has been the Vice President and General Manager
of Triactive America.

     Directors hold office for one year and until their successors are
elected and duly qualified. William P. Spencer and Debra L. Spencer are
married to each other.

Consultants

     Robert L. Hesslink, Jr. Sc.D., consults on and evaluates clinical
research on our products. Dr. Hesslink received his Doctorate of Science from
the Department of Health Sciences at Boston University in 1987. Following his
1986 commission into the U.S. Navy Medical Services Corp., he was stationed at
the Naval Medical Research Institute, Bethesda, MD from 1986 to 1990. During
his tenure, Dr. Hesslink published research pertaining to cold water immersion
and cold habituation in the Journal of Applied Physiology and the American
Journal of Physiology. Dr. Hesslink has consulted for national and
international companies on research projects directed at applied nutrition and
physiology since 1990. He has coordinated over 20 studies in the last three
years for academic institutions, including the University of Maryland School
of Medicine, University of California, San Diego, Department of Animal
Sciences, Ball State University, Human Performance Laboratory, University of
Utah, Division of Food Sciences and Nutrition and the Uniform Services
University of Health Sciences, Department of Military Medicine.

     Kenneth Cole, serves as a speaker and marketing consultant to
Imagenetix.  Ken Cole is a dual Olympian in basketball,  and as a coach, his
teams' won 13 national Australian titles.  In 2000, Mr. Cole carried the
Olympic torch in the Sydney torch relay and was awarded the Australian Sports
Medal of Honor. Ken Cole was appointed Secretary for the Australian Council
for Health, Physical Education and Recreation.  Ken Cole is an internationally
recognized motivational speaker.

Audit Committee
---------------


     We have not adopted an audit committee as of the date of this Annual
Report.  We will disclose when and if we do adopt an audit committee in the
future.

Code of Ethics
--------------

     We have adopted a Code of Ethics and it is attached as Exhibit 14 to this
Annual Report.  See Part III, Item 13.

Item 10.  Executive Compensation.

     We do not have employment agreements with any of our officers. We
currently pay Mr. Spencer an annual salary of $90,000 and provide him with
health insurance benefits.

Stock Option Plan

     In August 2000, we adopted a Stock Option Plan (the "Plan") which
provides for the grant of stock options intended to qualify as "incentive
stock options" and "nonqualified stock options" (collectively "stock options")
within the meaning of Section 422 of the United States Internal Revenue Code
of 1986 (the "Code"). Stock options may be issued to any of our officers,
directors, key employees or consultants.

     We have reserved 800,000 shares of common stock for issuance under the
Plan, of which 650,000 options have been granted to executive officers,
employees and consultants at prices ranging from $.86 to $2.00 per share. We
intend to increase the number of shares reserved under the Plan to 1,200,000
shares in the near future. The Plan is administered by the full Board of
Directors, who determine which individuals shall received stock options, the
time period during which the stock options may be exercised, the number of
shares of common stock that may be purchased under each stock option and the
stock option price.

     The per share exercise price of incentive stock options may not be less
than the fair market value of the common stock on the date the option is
granted. The aggregate fair market value (determined as of the date the stock
option is granted) of the common stock that any person may purchase under an
incentive stock option in any calendar year pursuant to the exercise of
incentive stock options will not exceed $100,000. No person who owns, directly
or indirectly, at the time of the granting of an incentive stock option, more
than 10% of the total combined voting power of all classes of our stock is
eligible to receive incentive stock options under the Plan unless the stock
option price is at least 110% of the fair market value of the common stock
subject to the stock option on the date of grant.

     No incentive stock options may be transferred by an optionee other than
by will or the laws of descent and distribution, and, during the lifetime of
an optionee, the stock option may only be exercisable by the optionee. Except
as otherwise determined by the Board of Directors, stock options may be
exercised only if the stock option holder remains continuously associated with
us from the date of grant to the date of exercise. The exercise date of a
stock option granted under the Plan may not be later than ten years from the
date of grant. Any stock options that expire unexercised or that terminate
upon an optionee's ceasing to be employed by us will become available once
again for issuance. Shares issued upon exercise of a stock option will rank
equally with other shares then outstanding. No stock options will be granted
by us at an exercise price less than 85% of the fair market value of the stock
underlying the option on the date the option is granted.

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.

Compliance with Section 16(a) of the Exchange Act

     No reports are required to be filed by members of management or other
shareholders because we file our reports under Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

     The following table sets forth certain information concerning our common
stock ownership as of this date, 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 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 16935 West
Bernardo Drive, Suite 101, San Diego, California 92127.  Assuming that there
are 13,383,750 outstanding shares, 8,722,152 of which are common stock
outstanding, 4,011,598 of which are shares underlying outstanding warrants and
650,000 shares underlying outstanding options which are currently
exerciseable:

        Name of                        Amount of
    Beneficial Owner           Beneficial Ownership(1)(2) Percent of Ownership
    ----------------           --------------------------    ---------------
William P. and Debra L. Spencer
(3)                                     3,040,000                 22.7%
Patrick S. Millsap(4)                     255,000                  1.9%
Derek C. Boosey                            50,000                   *
Barry King                                    -0-                   -0-
Gary J. McAdam (5)                      2,682,353                 20.0%
James Scibelli (6)                        873,000                  6.5%
All officers and directors
    as a group (5 persons)              6,900,353                 51.6%

*Represents less than 1%

(1)  Reflects amounts as to which the beneficial owner has sole voting power
     and sole investment power.
(2)  Includes stock options and common stock purchase warrants exercisable
     within 60 days from the date hereof.
(3)  Comprised of 2,790,000 shares and 250,000 stock options. William P. and
     Debra Spencer are husband and wife and are deemed to share beneficial
     ownership of these shares and options.
(4)  These shares are held in the Patrick and Cassandra Millsap Revocable
     Trust dated 10/11/89.
(5)  Comprised of 1,348,982 shares and 1,333,371 common stock purchase
     warrants, all of which are owned by entities controlled by Mr. McAdam.
(6)  Includes 305,000 shares and 568,000 common stock purchase warrants, all
     of which are owned by entities controlled by Mr. Scibelli.

Item 12.  Certain Relationships and Related Transactions.

       In 1999, William P. and Debra Spencer, officers, directors and
principal shareholders of our company, loaned us $288,500 for operating
expenses, evidenced by promissory notes bearing interest at 10% per annum. In
2000 the Spencers agreed to extend the notes until July 2002. In consideration
of the extension of the notes, we issued to the Spencers in May 2001 options
to purchase 225,000 shares of our common stock for $1.00 per share until
September 2005. In March 2001 the Spencers reduced the amount due on the notes
by $150,000 to reimburse us for expenses we advanced on their behalf. We
repaid the loan in 2002.

       In October 2001, we entered into a line of credit agreement with
Messrs. McAdam and Scibelli, two of our principal stockholders, under which
they agreed to advance us up to $1,000,000 for working capital secured by our
accounts receivables, inventory, property and equipment, and bearing interest
at 12% per annum. As additional consideration for the line of credit, we
issued to them a total of 250,000 Class E warrants exercisable at $.70 each
until October 2006. At March 31, 2003, we owed $230,280 under the line of
credit.

       William P. Spencer owns 15% of the outstanding stock of Integris, one
of our larger customers. For the year ended March 31, 2003, Integris accounted
for 10% of our sales.

       In July 2002 we entered into an exclusive supply and distribution
agreement ("Agreement") with ChiRx, Inc., a company in which Mr. McAdam is an
officer and director and in which a family trust is a principal shareholder
and pursuant to which we granted ChiRx the exclusive right to market our
Celadrin(TM) products through chiropractors worldwide for at least five years
at prices set forth in a schedule to the Agreement. GJM Trading Partners, Ltd,
an entity controlled by Mr. McAdam, had previously secured certain
Infomercial, E-Commerce, mass market and newsletter marketing rights from
Imagenetix.

       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. In order to avoid potential conflicts of interest,
all related party transactions must be approved by a majority of the
disinterested members of our Board of Directors. With respect to Mr. Spencer's
minority ownership of Integris, all contract negotiations and product pricing
decisions are made by our Vice President of Marketing and approved by the
disinterested members of our Board of Directors.

Item 13.  Exhibits and Reports on Form 8-K.

Reports on Form 8-K

     None.

Exhibits

     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)
               10.01     Celadrin(TM)Supply Agreement with Organic
                         Technologies (2)
               10.02     Agreement with Natrol (2)
               10.03     Supply and Distribution Agreement with The Enrich
                         Corporation (Unicity) (2)
               10.04     Office Lease (2)
               10.05     Security Agreement (2)
               10.06     Exchange Agreement dated March 23, 1999 (1)
               10.07     Agreement with Tony and Alicia Gwynn (2)
               10.08     Agreement with J Paul Consulting Corp. (2)
               10.09     Line of Credit Agreement (2)
               10.10     Modification to Enrich (Unicity) Agreement (2)
               10.11     Exclusive Supply and Distribution Agreement (3)
                         (Sanavive)
               10.12     Exclusive Supply and Distribution Agreement (Newport
                         Bioceuticals)(3)
               10.13     Exclusive Supply and Distribution Agreement (ChiRx,
                         Inc.)(3)
               10.14     License and Distribution Agreement
               14        Code of Ethics
               31.1      302 Certification of William P. Spencer
               31.2      302 Certification of Debra L. Spencer
               32        906 Certification
(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 March 4, 2002.

(3)  Incorporated by reference to our 10KSB Annual Report for the year ended
     March 31, 2003.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The following is a summary of the fees billed to Imagenetix by its
principal accountants during the fiscal years ended March 31, 2004, and March
31, 2003:


     Fee category                      2004           2003
     ------------                      ----           ----

     Audit fees                        $23,830        $24,919

     Audit-related fees                $     0        $     0

     Tax fees                          $ 1,220        $ 1,125

     All other fees                    $     0        $     0

     Total fees                        $25,050        $26,044

     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-QSB 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.

     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.

                            SIGNATURES

     In accordance with Section 13 or 15(d)of the Exchange Act, the Company
caused this Annual Report to be signed on behalf by the undersigned, thereunto
duly authorized.

                                IMAGENETIX, INC.



Date:  July 15, 2004                    By:  /s/  William P. Spencer
                                        William P. Spencer,
                                        Chief Executive Officer,
                                        President and Director


Date:  July 15, 2004                    By:  /s/  Debra L. Spencer
                                        Debra L. Spencer
                                        Secretary/Treasurer,
                                        and Director
<PAGE>