UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2015

☐   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number 333-157565

STRAGENICS, INC.

(Exact name of registrant as specified in its charter)

Florida	46-5209647
(State of incorporation)	(I.R.S. Employer Identification No.)

100 Rialto Place, Suite 700. Melbourne, FL 32901

(Address of principal executive offices)

321-541-1216

(Registrant’s telephone number)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒   No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Do not check if a smaller reporting company

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

APPLICABLE ONLY TO CORPORATE ISSUERS

As of March 31, 2015 the registrant had 99,845,602 shares of common stock, par value $.0001 per share issued and outstanding.

STRAGENICS, INC.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21
ITEM 4.	CONTROLS AND PROCEDURES	21
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	22
ITEM 1A.	RISK FACTORS	22
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	22
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	22
ITEM 4.	MINE SAFETY DISCLOSURE	22
ITEM 5.	OTHER INFORMATION	22
ITEM 6.	EXHIBITS	22

2

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Stragenics, Inc., (formerly known as Allerayde SAB, Inc.), (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "Stragenics" refers to: (i) Stragenics, Inc., formerly Allerayde SAB, Inc., a Florida corporation, and (ii) Allerayde SAB Limited, a U.K. company that is wholly-owned by the Company.

3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

STRAGENICS, INC.

FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2015

4

STRAGENICS, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	March 31, 2015			December 31, 2014
ASSETS
Current Assets
Cash and equivalents	$	5,755		$	104
Prepaid expenses		25,688			-
Total Current Assets		31,443			104
Other Current Assets
Intellectual Property, (less accumulated amortization of $11,892)		163,108			172,027
Total Other Assets		163,108			172,027
TOTAL ASSETS	$	194,551		$	172,131
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accounts payable and accrued expenses		128,725			139,525
Accrued interest		267,546			242,917
Convertible notes payable, net of discount of $84,976 (2014 - $0)		1,462,456			1,446,632
Derivative liability		1,040,232			372,286
Advances from officer		12,720			15,720
Loans payable		521,116			531,916
Advances from shareholders		6,500			6,000
Total Liabilities		3,439,295			2,754,996
Stockholders’ Deficit
Preferred Stock Authorized: 100,000,000 preferred shares. No shares issued and outstanding at March 31, 2015 and December 31, 2014		-			-
Common Stock, 400,000,000 shares of common stock with par value of $.0001; Issued 99,845,602 shares of common stock issued and outstanding at March 31, 2015 and (98,226,850) - December 31, 2014		9,985			9,823
Additional paid in capital		635,153			516,984
Accumulated other comprehensive loss		835			835
Accumulated deficit		(3,890,717	)		(3,110,507	)
Total Stockholders’ Deficit		(3,244,744	)		(2,582,865	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	194,551		$	172,131

See accompanying notes to financial statements.

5

STRAGENICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND

OTHER COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

	Three months ended March 31, 2015			Three months ended March 31, 2014
REVENUES	$	-		$	-
EXPENSES
Professional fees		10,000			4,010
Consulting fees		11,163			-
Compensation		15,000			-
Office expense		1,208			1,179
Filing and registration		840			1,321
Amortization of website		8,919			-
General and administrative		8,233			-
TOTAL EXPENSES		55,363			6,510
LOSS FROM OPERATIONS		(55,363	)		(6,510	)
OTHER INCOME (EXPENSES)
Other income		1,082			-
Interest expense		(24,629	)		(13,077	)
Commitment fee		(118,330	)		-
Amortization of debt discount		(25,023	)		(1,302	)
Derivative expense		(167,790	)
Change in fair market value of derivative liability		(390,157	)		(267,313	)
TOTAL OTHER INCOME (EXPENSE)		(724,847	)		(281,692	)
LOSS BEFORE PROVISION FOR INCOME TAXES		(780,210	)		(288,202	)
PROVISION FOR INCOME TAXES		-			-
NET LOSS	$	(780,210	)	$	(288,202	)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments		-			-
TOTAL COMPREHENSIVE LOSS	$	(780,210	)	$	(288,202	)
NET LOSS PER SHARE: BASIC AND DILUTED	$	(0.01	)	$	(0.00	)
TOTAL COMPREHENSIVE LOSS PER SHARE: BASIC AND DILUTED	$	(0.01	)	$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		99,647,755			89,005,250

See accompanying notes to financial statements.

6

STRAGENICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three months ended March 31, 2015			Three months ended March 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(780,210	)	$	(288,202	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		8,919			-
Commitment fee – stock-based		118,330			-
Amortization of debt discount		25,023			1,302
Derivative expense		167,790			-
Change in fair market value of derivative liability		390,157			267,313
Changes in assets and liabilities:
Increase in prepaid expenses		(25,688	)		-
Increase (decrease) in accounts payable and accrued expenses		(10,799	)		(7,500	)
Increase in accrued interest		24,629			13,077
Net Cash Used in Operating Activities		(81,849	)		(14,010	)
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft		-			(409	)
Proceeds (Repayment) from promissory notes		(19,500	)		15,000
Proceeds from convertible notes payable		110,000			-
Advances (Repayment) from shareholder		(3,000	)		5,100
Net Cash Provided by Financing Activities		87,500			19,691
Exchange rate effect on cash		-			-
NET INCREASE IN CASH		5,651			5,681
Cash and equivalents, beginning of period		104			-
Cash and equivalents, end of period	$	5,755		$	5,681
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

See accompanying notes to financial statements.

7

STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Stragenics, Inc., formerly known as Allerayde SAB, Inc. (the “Company” or “Stragenics”) was incorporated under the laws of the State of Florida on January 15, 2009. On February 23, 2010, the Company changed its name to Resource Exchange of America Corp. Effective April 30, 2013, the Company changed its name to Allerayde SAB, Inc. Effective April 28, 2014, the Company changed its name to Stragenics, Inc.

The Company’s prior business was a mobile enterprise software company aimed at improving productivity of field service organizations. Upon completion of the acquisition of assets from UTP Holdings, LLC on February 22, 2010, the Company adopted the business of UTP Holdings, LLC. The Company was then engaged in the business of recycling ferrous and nonferrous metals to customers in the United States and abroad.

On March 21, 2013, the Company entered into a Share Exchange Agreement with Allerayde SAB Limited. (“Allerayde”) and Mike Rhodes, the sole member of Allerayde (the “Allerayde Stockholder”) (the “Share Exchange Agreement”). This share exchange transaction constituted a reverse merger and a recapitalization of Stragenics (formerly Allerayde).  In conjunction with this reverse merger, the historical accounts of Stragenics become the historical accounts of Resource Exchange of America Corp for accounting purposes. The Company was then engaged in the business of developing and manufacturing allergy management products in the United Kingdom and other countries such as the U.S. and Canada.

On March 4, 2014, the Company underwent a change of control and entered into a Termination Agreement (the “Agreement”), whereby Allerayde SAB, Ltd, the Company’s subsidiary reverted to former management effective December 1, 2014, thereby reverting the subsidiary back to former management.

On December 1, 2014, the Company acquired BakedAmerican.com, and began new operations as an internet-based, social media, marketing and development company.

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted a December 31 fiscal year end.

8

STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Cash and Cash Equivalents

Stragenics considers all highly liquid investments with maturities of three months or less to be cash equivalents. At March 31, 2015 and December 31, 2014, respectively, the Company had $5,755 and $104 of cash, respectively.

Fair Value Measurement

FASB ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and prescribes disclosures about fair value measurements.

As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The valuation techniques that may be used to measure fair value are as follows:

Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method.

Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

The carrying value of the Company’s borrowings is a reasonable estimate of its fair value as borrowings under the Company’s credit facility have variable rates that reflect currently available terms and conditions for similar debt.

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

9

STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of March 31, 2105 and December 31, 2014. As required by FASB ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 

March 31, 2015	Level I		Level II		Level III		Total
Derivative liability	$	-	$	1,040,232	$	-	$	1,040,232
Total liabilities	$	-	$	3,439,295	$	-	$	3,439,295

December 31, 2014	Level I		Level II		Level III		Total
Derivative liability	$	-	$	372,286	$	-	$	372,286
Total liabilities	$	-	$	2,754,996	$	-	$	2,754,996

In addition, the FASB issued, “The Fair Value Option for Financial Assets and Financial Liabilities. This guidance expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value option for any of its qualifying financial instruments.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses, convertible notes payable, derivative liability, amounts due to related parties and loans payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Use of Estimates

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

10

STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Foreign Currency

Until December 1, 2014, the operations of the Company were located in England and Wales. Stragenics maintained a Great Britain Pounds bank account. The functional currency is the U.S. Dollar. Transactions in foreign currencies other than the functional currency, if any, are re-measured into the functional currency at the rate in effect at the time of the transaction. Monetary assets and liabilities denominated in Great Britain Pounds are translated into U.S. Dollars at the rate in effect at the balance sheet date. Revenue and expenses denominated in Great Britain Pounds Dollars are translated at the average exchange rate.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2015.

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

Recent Accounting Pronouncements

On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic 915).   Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP.  In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders’ equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.  The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued.  The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.

Stragenics does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow other than the pronouncement described above. 

11

STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 2 – GOING CONCERN

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception, has an accumulated deficit of $3,890,717 as of March 31, 2015, has negative working capital, and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock.

NOTE 3 – INTELLECTUAL PROPERTY

On December 1, 2014, the Company acquired BakedAmerican.com, a cannabis information website that provides consumer resource information in cannabis legal states. The acquisition price of $175,000 is amortized over the five year estimated useful life of the website. As of March 31, 2015, $11,892 in accumulated amortization expense has been accrued with a balance of $163,108 projected to be expense until November 30, 2019.

NOTE 4 – DUE TO RELATED PARTIES

During the period ended March 31, 2015 and for the year ended December 31, 2014, the Company received advances from the President of the Company in the net amount of $15,720. During the period ended March 31, 2015, the Company repaid $3,000 of those advances. The advances are non-interest bearing and due on demand.

NOTE 5 – PROMISSORY NOTES

The Company has amounts due to a former officer of the Company and another company controlled by the former president totaling $431,061 as of March 31, 2015. The loans are unsecured, non-interest bearing and due on demand.

Effective March 18, 2010, the Company entered into a line of credit agreement with a company owned by a former officer of the Company allowing for borrowings of up to $150,000 bearing interest at 8% per annum. The line of credit is unsecured and all borrowings plus interest are due on demand. The balance on the line of credit as of March 31, 2015 is $50,300.

On September 10, 2013 and September 24, 2013, the Company signed promissory notes with Capital Nordic Ltd. in the amounts of $3,000 and $5,000. The notes plus interest of $450 and $750 respectively were payable after 4 months. The notes are currently in default. Effective March 31, 2014, these notes, plus the accrued interest were assigned to Neoventive LLC, a shareholder of the Company, by Capital Nordic Ltd., As such the accrued interest was added to the principal balance. The principal balance due is $9,200 as of March 31, 2015 and December 31, 2014.

During the three months ended March 31, 2015, the Company received a $500 advance from the same shareholder. The amount is unsecured, non-interest bearing and has no specific terms of repayment.

The Company has an amount due of $30,555 to an unrelated party as of March 31, 2015. The amount is unsecured, non-interest bearing and due on demand.

The Company has an amount due of $6,000 in advances from an unrelated parties. The advance has no specific terms of repayment, is unsecured and non-interest bearing.

NOTE 6 – CONVERTIBLE NOTES PAYABLE

(a) On February 22, 2010, the Company issued a $250,000 promissory note to a former officer of the Company. The note bears interest at 10% per annum, is unsecured, and was due on December 31, 2010. The holder may convert, at any time, any amount outstanding into shares of common stock of the Company at a conversion price per share equal to 75% of the average of the closing market price of the Company’s common stock during the five trading days immediately preceding the conversion date.

12

STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 6 – CONVERTIBLE NOTES PAYABLE (CONTINUED)

The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversions feature of $175,081 with an equivalent discount on the convertible debt. The debt was fully accreted as of December 31, 2011. The carrying value of the convertible debt as of March 31, 2015 is $250,000. The derivative liability related to this note is recalculated each reporting period. The derivative liability was $180,516 as of March 31, 2015.

(b) On April 13, 2010, the Company entered into a $250,000 draw down promissory note agreement with Paramount Trading Company, a non-related party. Amounts drawn on this credit facility bear interest at 8% per annum, are unsecured, and were due on April 13, 2011. Effective March 31, 2014, Paramount Trading Company assigned this note, along with accrued interest to Liberty Resources Ltd., whereby the principal balance of $250,000 and accrued interest of $59,001 were reclassified into a new principal balance of $309,001

The holder could convert, at any time, any amount outstanding into shares of common stock of the Company at a conversion price per share equal to 75% of the average of the closing market price of the Company’s common stock during the thirty trading days immediately preceding the conversion date. On October 14, 2010, the conversion price was changed to be fixed at $0.45 per share.

As of March 31, 2015, the outstanding balance is $309,001. The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversion feature of $260,265 with an equivalent discount on the convertible debt. Upon modification of the conversion feature, the derivative liability was removed as the number of shares to be issued upon conversion became fixed.  

(c) Effective January 31, 2005, a former officer of the Company entered into a line of credit agreement with a financial institution allowing for borrowings of up to $800,000 with annual interest at prime to be used to fund the operations of the Company. The line of credit is secured by the principal residence of the former President of the Company. Monthly interest-only payments are required. On October 21, 2010, the Company agreed to add a conversion option to the entire balance of principal and interest outstanding at any time on the line of credit. The President of the Company may elect to convert, at any time, any amount outstanding into shares of common stock of the Company at a conversion price per share equal to 75% of the average of the closing market price of the Company’s common stock during the five trading days immediately preceding the conversion date. The maturity date was December 31, 2011 and the note is now due on demand.

As of March 31, 2015, the outstanding balance is $788,472 (December 31, 2013 - $788,472). The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversion feature of $190,274 with an equivalent discount on the convertible debt. The debt was fully accreted as of December 31, 2011.  The carrying value of the convertible debt as of March 31, 2015 is $788,472. The derivative liability related to this note is recalculated each reporting period. The derivative liability was $569,326 as of March 31, 2015.

13

STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 6 – CONVERTIBLE NOTES PAYABLE (CONTINUED)

(d) Effective March 31, 2014, Laurag Associates S.A., assigned two defaulted notes, plus accrued interest that it held to Neoventive LLC, in the collective amount of $23,250 one dated August 31, 2012 in which the Company issued a 6% convertible note for proceeds of $20,000 and the second dated March 12, 2013 in which the Company issued a 5% promissory note in the amount of $2,500. Upon the effectiveness of the assignment, both notes had interest at 6% and maintained the same conversion features. The holder may elect to convert, at any time, any amount outstanding into shares of common stock of the Company at a conversion price per share equal to the market price of the stock as determined by taking the average trading price of the stock over the previous 30 days.

The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversion feature of $1,407 with an equivalent discount on the convertible debt. The debt was fully accreted as of March 31, 2015.  The carrying value of the convertible debt as of March 31, 2015 is $23,250. The derivative liability related to this note is recalculated each reporting period. The derivative liability was $11,821 as of March 31, 2015. The note is currently in default.

(e) On November 16, 2012 the Company issued a 6% convertible note for proceeds of $66,709 which matured on November 16, 2013. The holder may elect to convert, at any time, any amount outstanding into shares of common stock of the Company at a conversion price per share equal to the market price of the stock as determined by taking the average trading price of the stock over the previous 30 days. The derivative liability related to this note is recalculated each reporting period.

The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversion feature of $1,410 with an equivalent discount on the convertible debt. The debt was fully accreted as of December 31, 2014. The carrying value of the convertible debt as of December 31, 2014 is $66,709. The derivative liability related to this note was recalculated each reporting period. The note is currently in default.

On July 1, 2014, the conversion feature of the loan was modified from a variable conversion price to a fixed conversion price of $0.01 per share. As a result of the loan modification, the remaining derivative liability as of July 1, 2014 of $5,121 was recorded as a gain on modification of loan terms. A debt discount of $66,709 to recognize the value of the conversion feature, was recorded on July 1, 2014, which was fully amortized as of December 31, 2014. 

(f) On March 31, 2014, the Company issued a convertible promissory note for $15,000 to Neoventive LLC. The note was due on October 1, 2014, is unsecured and bears interest at 8%. The note and any accrued interest may be converted into shares of the Company’s common stock at fair market value. The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversion feature of $9,834 with an equivalent discount on the convertible debt. As of December 31, 2014, the unamortized debt discount was $0. The carrying value of the convertible debt as of December 31, 2014 was $15,000. The derivative liability related to this note is recalculated each reporting period. The same party loaned an additional $5,000 under the same terms of the above loan during the year ended December 31, 2014. The entire balance of $20,000 was repaid during the three months ended March 31, 2015. The accrued interest remains due as of March 31, 2015.

(g) Effective January 2, 2015, the Company issued an 8% convertible note to KBM Worldwide Inc., for proceeds of $33,000 which matures on September 12, 2015. Among other terms, the holder may elect to convert, at any time after one hundred eighty days (180), any amount outstanding into shares of common stock of the Company at a conversion price per share equal to 51% of the average of the three lowest days closing market prices during the fifteen day trading period immediately preceding the conversion date. The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversion feature of $45,531, with a discount on the convertible debt of $33,000 and a derivative expense of $12,531. The debt discount will be amortized over the life of the debt. The remaining discount was $21,049 as of March 31, 2015. The derivative liability related to this note is recalculated each reporting period. The derivative liability was $74,858 as of March 31, 2015.

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STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 6 – CONVERTIBLE NOTES PAYABLE (CONTINUED)

(h) Effective January 16, 2015, the Company issued a 10% convertible note to Tangiers Investment Group LLC for proceeds of $44,000 under terms of a borrowing agreement whereby the Company can borrow up to $220,000 within 270 days of execution of the agreement. The Note, with a 10% original issue discount, has interest under the Note of 10% per annum, with the principal and all accrued but unpaid interest due on or about January 16, 2016. The Note is convertible at any time at Tangier’s option into shares of the Company’s common stock at a variable conversion price of 55% of the lowest traded price during the 20 days prior to the notice of conversion, subject to adjustment and other terms as described in the Note.

The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversion feature of $67,262, with a discount on the convertible debt of $44,000 and a derivative expense of $23,262. The debt discount will be amortized over the life of the debt. The remaining discount was $34,251 as of March 31, 2015. The derivative liability related to this note is recalculated each reporting period. The derivative liability was $119,713 as of March 31, 2015.

(i) On March 6, 2015, the Company issued an 8% convertible note to Vis Vires Group Inc., for proceeds of $33,000 which matures on or about December 7, 2015. Among other terms, the holder may elect to convert, at any time after one hundred eighty days (180), any amount outstanding into shares of common stock of the Company at a conversion price per share equal to 51% of the average of the three lowest days closing market prices during the fifteen day trading period immediately preceding the conversion date.

The Company was required to classify the conversion feature contained within the convertible debt as a derivative liability. As such, the Company recorded a derivative liability related to the convertible debt equal to the estimated fair value of the conversion feature of $160,997, with a discount on the convertible debt of $33,000 and a derivative expense of $127,997. The debt discount will be amortized over the life of the debt. The remaining discount was $29,676 as of March 31, 2015. The derivative liability related to this note is recalculated each reporting period. The derivative liability was $83,998 as of March 31, 2015.

NOTE 7 – COMMON STOCK

The Company originally had an unlimited number of shares of no par value common stock.

On inception, the Company issued 10 shares of common stock at £1.00 per share to its founder for total cash proceeds of £10, which converted at its historical rate is $15. The Company closed a share exchange transaction effective March 23, 2013 with the shareholders of Resource Exchange of America Corp. This share exchange transaction constituted a reverse merger and a recapitalization of Allerayde.  In conjunction with this reverse merger, the historical accounts of Allerayde become the historical accounts of Resource Exchange of America Corp for accounting purposes. The shareholders of Allerayde were issued 75,872,411 shares of Resource Exchange, representing 98.97% of the issued and outstanding shares of Resource Exchange. At the time of the reverse merger there were 786,328 shares of common stock outstanding.

On January 31, 2013, the Company amended its Articles of Incorporation to increase the total authorized shares of common stock, par value $.0001 per share from 250,000,000 shares to 400,000,000 shares and to additionally authorize a total of 100,000,000 shares of preferred stock, par value $.0001 per share which may be issued by the Company.

On December 1, 2014, the Company issued 5,000,000 shares of common stock for its acquisition of BakedAmerican.com at a valuation of $175,000. On April 1, 2015, the Company and the seller agreed to amend the purchase terms of the acquisition whereby the stock issued was returned and exchanged for a promissory note with a face value of $175,000. (See Note 10 - Subsequent Events.)

On December 30, 2014, the Company agreed to issue 4,221,600 shares of common stock for notes payable of $21, 108 plus an agreement to cancel the balance of notes payable and accrued interest in the amount of $59,669.

On January 16, 2015, the Company agreed to issue 1,618,752 shares of its common stock, at $0.0731 per share as part of a commitment fee under the terms of an Equity Line of Credit Agreement.

As of March 31, 2015 there were 99,845,602 shares of common stock issued and outstanding.

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STRAGENICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2015

NOTE 8 – COMMITMENTS AND CONTINGENCIES

The Company had entered into a lease agreement for its business premises, which called for monthly payments in the amount of approximately £368 through May 31, 2014. The lease was assumed by the former CEO upon the change of control on March 4, 2014. The former officers and directors are involved in other business activities and as a result, $1,081 in accrued rent was written off as of March 31, 2015.

NOTE 9 – INCOME TAXES

As of March 31, 2015, the Company had net operating loss carry forwards of approximately $1,297,266 that may be available to reduce future years’ taxable income arising from the same trade. Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

The provision for corporate income tax at the expected rate of 34% consists of the following for the three months ended March 31, 2015 and 2014:

	2015			2014
Corporate income tax benefit attributable to:
Current Operations	$	265,271		$	97,989
Less: valuation allowance		(265,271	)		(97,989	)
Net provision for Corporate income taxes	$	-		$	-

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of March 31, 2015 and December 31, 2014:

	March 31, 2015			December 31, 2014
Deferred tax asset attributable to:
Net operating loss carryover	$	441,070		$	175,799
Less: valuation allowance		(441,070	)		(175,799	)
Net deferred tax asset	$	-		$	-

NOTE 10 – SUBSEQUENT EVENTS

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to March 31, 2015 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events described above.

On April 1, 2015, the Company and Healthnostics, Inc., the seller of BakedAmerican.com agreed to amend the acquisition agreement between the companies whereby Healthnostics, Inc., would return 5,000,000 shares of the Company’s common stock in exchange for a promissory note payable, due on March 31, 2016 in the amount of $175,000, with an interest rate of 6%.

On April 2, 2015, the Company issued an 8% convertible note to LG Capital Funding LLC, for proceeds of $63,000 which matures on October 1, 2015. Among other terms, the holder may elect to convert, at any time after one hundred eighty days (180), any amount outstanding into shares of common stock of the Company at a conversion price per share equal to 40% of the average of the lowest trading price with a 20 day look back.

Effective May 12, 2015, The Company entered into a 10% Convertible Promissory Note and Warrant Agreement with JDF Capital Inc. In accordance with the terms of the Note with JDF Capital Inc., the Company can borrow up to $330,000, of which the Company borrowed $61,600 on January 16, 2015 and with an additional $268,400 available for additional borrowings at JDF’s discretion after the initial $61,600. Each advance principal and interest is due 12 months from the applicable funding date. Warrants, with a term of 5 years, received are equal to 100% of the common stock shares eligible for conversion on the date of the initial funding with an exercise price equal 110% of the initial conversion price. The terms of conversion, among other terms, is equal to 50% of the average of the 3 lowest reported sale prices on the common stock for the 20 trading days immediately prior to the closing date of the financing or 50% of the average of the 3 lowest reported sale prices for the 20 days prior to the conversion date of the Note.

On April 25, 2015, Tangiers Investment Group LLC converted $25,000 of an assigned portion of the Liberty Resources Ltd., Note it purchased into 375,000 shares of common stock.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Business Overview

The Company is a holding company that acquired a new operating asset, BakedAmerican.com on December 1, 2014 along with the related domain names www.bakedamerican.com, www.bakedamerican.org, www.bakedamerica.com, www.bakedamerica.org, www.bakedamericantv.com and www.bakedamerican.tv. BakedAmerican is a recreational cannabis consumer website providing product information, dispensary information and locations, news, strain reviews and resources for marijuana legal states. The site will allow consumers to identify, rate and explore legal marijuana dispensaries and compare experiences and products. The news channel, via RSS information sources, provides news feeds for marijuana related information focused on nationally important developments, impact on state legislation, new trends and new legislation. The website is still under construction, has not gone “live” and there are no consumers/users yet for BakedAmerican.com, nor has it yielded any revenue.

Sales and Marketing

We are following a similar model to other information/directory portal sites, in that we recognize that consumers are strongly influenced by, and make decisions based upon, local advertising and that local advertising is moving toward online research conducted by consumers and as such, local businesses are spending more advertising dollars on media and online sources. Our approach further includes utilizing state of the art techniques and tools to optimize Internet Marketing to improve our on-line exposure to interested visitors and consumers.

We plan to generate revenue primarily through the sale of online display advertising on our website to businesses local to the areas we cover, initially the Colorado and Washington state geographies, as well as developing a marketing program for sector business entities to have the opportunity to place themselves prominently within the BakedAmerican local directory for increased visibility.

Channels

We plan to add sales efforts, including direct sales in our targeted markets and continue research on revenue generating offerings for our website.

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Marketing and Public Relations

We plan to market our website through extensive Internet Marketing, direct marketing and sales. 

Industry Background

The Market for Medical Marijuana and Consumer Cannabis 

Overview

Twenty three states and the District of Columbia have adopted laws that exempt patients who use medical marijuana, under a physician’s prescription and supervision, from state criminal penalties. Four states; Colorado, Washington, Oregon, Alaska, and the District of Columbia, have legalized recreational use of cannabis.

Market Growth

As a result of the ongoing legalization momentum, the market size has grown from approximately $1.43 billion in 2013 to $2.34 billion in 2014 according to a report published by The Huffington Post. Further, according to a recent report from GreenWave Advisors, a research and advisory firm that serves the emerging marijuana industry in the U.S., if the federal government doesn't end prohibition in all 50 states and the District of Columbia and the trajectory of state legalization continues on its current path, with more, but not all, states legalizing marijuana in some form, the industry in 2020 would be worth $21 billion. If the federal government does end prohibition, the industry would be worth $35 billion in 2020, GreenWave Advisors states.

Additionally, we believe that recreational marijuana sales will soon outpace medical sales, as exemplified by the fact that according to Colorado State Department of Revenue data, beginning in July, 2014, recreational marijuana sales in Colorado exceeded medical sales for the first time. Such recreational marijuana sales trending will create an expanding market for ancillary informational products and services, which we target.

Competition

The largest consumer review site Yelp is the most significant competition for any online review website, including medical marijuana and consumer cannabis industries and can affect any company in the market. However, to date Yelp has limited involvement in this market segment. Others, such as leafly.com and weedmaps.com, have significant penetration into the market and competing with these companies will require us to provide a relevant and quality experience, in addition to providing access to vital and usable information. Leafly.com has indicated that they received over 2.5 million unique visitors per month and recorded revenue of close to $4 million in 2013. According to Inc.com, Weedmaps.com has 65 employees and $30 million in annual revenue.

Intellectual Property

Our intellectual property portfolio is an important aspect for our company. We currently own BakedAmericam.com and the related domain names www.bakedamerican.com, www.bakedamerican.org, www.bakedamerica.com, www.bakedamerica.org, www.bakedamericantv.com and www.bakedamerican.tv, which we are researching for trademark applicability. We plan to use a combination of trademark, copyright trade secret and other intellectual property laws, and confidentiality agreements to protect our intellectual property, as the case may be. Despite any precautions we may take it may be possible for third parties to obtain and use, without consent, intellectual property that we own.

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RESULTS OF OPERATIONS

Working Capital

	March 31,			December 31,
	2015			2014
Current Assets	$	31,443		$	104
Current Liabilities		3,439,295			2,754,996
Working Capital Deficit		(3,407,852	)		(2,754,892	)

Cash Flows

	Three months ended March 31, 2015			Three months ended March 31, 2014
Cash Flows (used in) Operating Activities	$	(81,849	)	$	(14,010	)
Cash Flows provided by Investing Activities		-			-
Cash Flows provided by Financing Activities		87,500			19,691
Exchange rate effect on cash		-			-
Net Increase in Cash During Period	$	5,651		$	5,681

For the three-month period ended March 31, 2015

Operating Revenues

Operating revenues for the period ended March 31, 2015 were $nil.

Operating revenues for the period ended March 31, 2014 were $nil.

Operating Expenses and Net Loss

Operating expenses, including other income (expenses), for the three months ended March 31, 2015 were $780,210, which is comprised of professional fees of $10,000, consulting fees of $11,163, executive compensation of $15,000, office expenses of $1,208, general and administrative expense of $8,233, filing and registration fees of $840, interest expense of $24,629, amortization of intellectual property of $8,919, amortization of debt discount of $25,023, line of credit commitment fee of $118,330, other income of $1,082, derivative expense of $167,790 and a loss on the change in fair market value of the derivative liability of 390,157.

Operating expenses, including other income (expenses), for the three months ended March 31, 2014 were $288,202, which is comprised of professional fees of $4,010, office expenses of $1,179, filing and registration fees of $1,321, interest expense of $13,077, amortization of debt discount of $1,302 and a loss on the change in fair market value of the derivative liability of $267,313.

Liquidity and Capital Resources

As of March 31, 2015 and December 31, 2014, the Company’s cash balance was $5,755 and $104, respectively.  As of March 31, 2015, the total asset balance was $194,551.

As of March 31, 2015, the Company had total liabilities of $3,439,295 compared with total liabilities of $2,754,996 as of December 31, 2014. The increase in total liabilities is mainly attributed to an increase in convertible notes payable, accrued interest and the derivative liability.

As of March 31, 2015, the Company had a working capital deficit of $3,407,852 compared to a deficit of $2,754,892 as of December 31, 2014.

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Cash flows from Operating Activities

During the period ended March 31, 2015, the Company used cash of $81,849 from operating activities compared to $14,010 of cash used by operating activities during the period ended March 31, 2014.

Cash flows from Investing Activities

During the period ended March 31, 2015, the Company used $nil of cash from investing activities compared to $nil for the period ended March 31, 2014.

Cash flows from Financing Activities

During the period ended March 31, 2015, financing activities provided cash of $87,500, consisting of $110,000 of cash from note proceeds and repayment of $22,500 in prior debt, as compared to $19,691 in cash provided during the period ended March 31, 2014.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Future Financings

We will continue to rely on debt and equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

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Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of September  30, 2013, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

Changes in Internal Control over Financial Reporting

Our management has also evaluated our internal control over financial reporting, 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 our last evaluation.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting. 

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 16, 2015, the Company agreed to issue 1,618,752 shares of its common stock, at $0.0731 per share as part of a commitment fee under the terms of an Equity Line of Credit Agreement.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

Exhibit Number	Description of Exhibit	Filing Reference
31.01	Certification of Principal Executive and Financial Officer Pursuant to Rule 13a-14.	Filed herewith.
32.01	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act.	Filed herewith.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* The XBRL-related information in Exhibits 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.

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SIGNATURES

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

	STRAGENICS, INC.
Dated:  May 20, 2015	By:	/s/ Alan W. Grofe
		Alan W. Grofe
		Title: President, Chief Executive Officer, Secretary & Treasurer

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