UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


(Mark One)

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

For the quarterly period ended JulyMarch 31, 2018


2019

or

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

For the transition period from ____________________to ____________________


to ____________________

Commission File Number: 333-216960


Quanta, Inc.

(Exact name of registrant as specified in its charter)


charter)

Nevada 81-2749032

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

   
3606 W. Magnolia Blvd., Burbank, CA 91505
(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code:code): (424) 261-2568


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


[  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 ☒[X] No ☐ (Does not currently apply to the Registrant)


[  ]

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


Large accelerated filer ☐[  ]Accelerated filer ☐[  ]
Non-accelerated filer ☐[  ]Smaller reporting company ☒[X]
(Do not check if a smaller reporting company)Emerging growth company ☒[X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


[  ]

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


State the number of shares outstanding of each[X]

Securities registered pursuant to Section 12(b) of the issuer’s classes of common equity, as of the latest practicable date.


Act: None

Title of Each Class Outstanding December 21, 2018Trading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.001 par value per share 39,200,090 sharesQNTAOTC Markets

As of May 14, 2019, the registrant had 39,200,090 shares of Common Stock outstanding.


TABLE OF CONTENTS


  
Page
PART I
FINANCIAL INFORMATION
3
ITEM 1.
Financial Information (Interim - see Table of Contents to Financial Statements)
Condensed Consolidated Balance Sheets - March 31, 2019 (Unaudited) and December 31, 20183
Condensed Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2019 and 20184
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - Three Months Ended March 31, 2019 and 20185
Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2019 and 20186
Notes to Condensed Consolidated Financial Statements (Unaudited) – Three Months Ended March 31, 2019 and 20187
ITEM 2.
Management’s Discussion Andand Analysis Or Plan Ofof Financial Condition and Results of Operations
16
12
ITEM 3.
Quantitative And Qualitative Disclosures About Market Risk
17
16
ITEM 4.
Controls And Procedures
17
16
PART II
OTHER INFORMATION
18
16
ITEM 1.
Legal Proceedings
18
ITEM 1A.
Risk Factors
1816
ITEM 2.
Unregistered Sales Ofof Equity Securities Andand Use Ofof Proceeds
1816
ITEM 3.
Defaults Upon Senior Securities
1816
ITEM 4.
Mine Safety Disclosures
1816
ITEM 5.
Other Information
1817
ITEM 6.
Exhibits
17
Signatures18

PART I – FINANCIAL INFORMATION

Item 1.Financial Information.

QUANTA, INC. AND SUBSIDIARY

CONDENSEDCONSOLIDATED BALANCE SHEETS

  March 31, 2019  December 31, 2018 
  (Unaudited)    
ASSETS        
Current assets:        
Cash $82,723  $35,820 
Accounts receivable  17,553   19,561 
Total current assets  100,276   55,381 
         
Equipment, net  413,922   372,880 
Operating lease right-of-use asset, net  390,378   - 
Security deposit  16,770   16,770 
         
Total assets $921,346  $445,031 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
Current liabilities:        
Accounts payable and accrued expenses $7,897  $9,617 
Notes payable  175,850   180,000 
Deferred revenue, distribution agreement current portion  33,300   - 
Operating lease liabilities, current portion  73,800   - 
Total current liabilities  290,847   189,617 
         
Long term liabilities        
Deferred revenue, distribution agreement long-term portion  60,490   - 
Operating lease liabilities, long-term portion  324,510   - 
Total liabilities  675,847   189,617 
         
Stockholders’ equity (deficit):        
Preferred stock, $0.001 par value; 25,000,000 shares authorized; none issued or outstanding  -   - 
Common stock, $0.001 par value; 100,000,000 shares authorized; 39,200,090 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively  39,200   39,200 
Shares to be issued (957,750 shares and 612,000 shares, respectively)  478,866   306,000 
Additional paid-in capital  2,360,598   2,360,598
Accumulated deficit  (2,633,165)  (2,450,384)
Total stockholders’ equity (deficit)  245,499   255,414 
         
Total liabilities and stockholders’ equity (deficit) $921,346  $445,031 

See notes to condensed consolidated financial statements

QUANTA, INC. AND SUBSIDIARY

CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

  Three months ended March 31, 2019  Three months ended March 31, 2018 
  (Unaudited)  (Unaudited) 
Sales, net $224,358  $35,265 
Distributor fees  6,210   - 
Total revenue  230,568   35,265 
Cost of goods sold  58,733   18,000 
Gross profit  171,835   17,265 
         
Operating expenses:        
Employees compensation and contractors  187,540   117,126 
Selling, general, and administrative  162,916   78,744 
Research and development  -   62,489 
Total operating expenses  350,456   258,359 
Loss from operations  (178,621)  (241,094)
         
Other income (expense):        
Interest expense  (4,160)  (30,000)
Other income and expense, net  (4,160)  (30,000)
         
Net loss $(182,781) $(271,094)
         
Net loss per share, basic and diluted $(0.00) $(0.01)
Weighted average common shares outstanding – basic and diluted  39,200,090   21,908,810 

See notes to condensed consolidated financial statements

4
   
Signatures
19

2

PART I – FINANCIAL INFORMATION

Item 1.Financial Information (Interim).

QUANTA, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS FREIGHT SOLUTION, INC.)

CONDENSEDCONSOLIDATED BALANCE SHEETSSTATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)



  
As of
July 31, 2018
  
As of
April 30, 2018
 
  (unaudited)  (audited) 
ASSETS      
       
CURRENT ASSETS:      
Cash $211,693  $6,314 
         
Prepaid expense  54   54 
Total Current Assets  211,747   6,368 
         
FIXED ASSETS:        
Machine, net of accumulated depreciation of $37,233  310,267   - 
Deposit - Construction in progress  175,000   - 
Total Fixed Assets  485,267   - 
         
OTHER ASSETS:        
Intangible assets, net of accumulated amortization of $4,000  -   - 
Security deposit  16,770   - 
         
TOTAL ASSETS $713,784  $6,368 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
         
CURRENT LIABILITIES:        
Accounts payable and accrued expense $7,454  $262,000 
Loans  110,000   24,738 
TOTAL LIABILITIES  117,454   286,738 
         
STOCKHOLDERS’ EQUITY (DEFICIT):        
Preferred stock, $0.001 par value; 25,000,000 shares authorized; none issued or outstanding  -   - 
Common stock, $0.001 par value; 100,000,000 shares authorized; 38,900,090 and 21,500,000 shares issued and outstanding as of July 31, 2018 and April 30, 2018, respectively  38,900   21,500 
Additional paid in capital  3,179,702   29,339 
Accumulated deficit  (2,622,272)  (331,209)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)  596,330   (280,370)
         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) 
$
713,784  
$
6,368 


(Unaudited)

Three months ended March 31, 2019 (Unaudited)
  Common Stock, par value $0.001  Additional          
  Number of shares  Amount  paid-in capital  Shares to be issued  Accumulated deficit  Total 
Balance, December 31, 2018  39,200,090  $39,200  $2,360,598  $306,000  $(2,450,384) $255,414 
Shares to be issued              172,866       172,866 
Net loss for the three months ended March 31, 2019  -   -       -   (182,781)  (182,781)
Balance, March 31, 2019 (Unaudited)  39,200,090  $39,200  $2,360,598  $478,866  $(2,633,165) $245,499 

Three months ended March 31, 2018 (Unaudited) 
  Common Stock, par value $0.001  Additional          
  Number of shares  Amount  paid-in capital  Shares to be issued  Accumulated deficit  Total 
Balance, December 31, 2017  21,908,810  $21,909  $(11,909) $-  $(565,318) $(555,318)
Net loss for the three months ended March 31, 2018  -   -       -   (271,094)  (271,094)
Balance, March 31, 2018 (Unaudited)  21,908,810  $21,909  $(11,909) $-  $(836,412) $(826,412)

See notes to condensed consolidated financial statements.statements

5

QUANTA, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS FREIGHT SOLUTION, INC.)

CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONSCASH FLOWS


  
For the three months
ended July 31, 2018
  
For the three months
ended July 31, 2017
 
  (unaudited)  (unaudited) 
INCOME:      
Sales $38,244  $1,504 
         
Cost of Goods Sold  50,033   - 
         
GROSS PROFIT/(LOSS)  (11,789)  1,504 
         
EXPENSES:        
Contractor expense  146,967   19,900 
Selling, general, and administrative  137,382   35,712 
Research and development  93,381   26,242 
Total Expenses  377,730   81,854 
NET OPERATING LOSS  (389,519)  (80,350)
         
Other Income and Expense:        
Gain on sale of intangible asset  15,000   - 
Loss on derivative liability  (485,385)  - 
Interest expense
  -   (810)
Interest Income  27   - 
Total Other Income and Expense  (470,358)  (810)
         
NET LOSS $(859,877) $
(81,160
)
         
Basic and diluted loss per share $(0.03) $(0.01)
Weighted average common shares outstanding – basic and diluted  31,913,572   10,000,000 

(Unaudited)

  Three Months Ended
March 31, 2019		  Three Months Ended
March 31, 2018		 
  (Unaudited)  (Unaudited) 
       
CASH FLOW FROM OPERATING ACTIVITIES:        
Net loss $(182,781) $(271,094)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation  28,958   28,960 
Amortization of right-of-use asset  19,242   - 
Interest accrual  4,160   - 
Changes in operating assets and liabilities:        
Accounts receivable  2,008   - 
Accounts payable and accrued liabilities  (5,880)  - 
Deferred revenue  93,790   - 
Operating lease liabilities  (11,310)  - 
Net cash used in operating activities  (51,813)  (242,134)
         
CASH FLOW FROM INVESTING ACTIVITIES:        
Purchase of equipment  (70,000)  - 
Net cash used in investment activities  (70,000)  - 
         
CASH FLOW FROM FINANCING ACTIVITIES:        
Proceeds from convertibles notes payable  -   264,500 
Proceeds from notes payable  (17,150)  - 
Principal payments of notes payable  13,000   - 
Proceeds from shares to be issued  172,866   - 
Net cash provided by financing activities  168,716   264,500 
         
Increase (decrease) in cash  46,903   22,366
Cash and cash equivalents, beginning of period  35,820   23,467 
Cash and cash equivalents, end of period $82,723  $45,833 
         
Supplemental Disclosures of Cash Flow Information:        
Cash paid for taxes  -   - 
Cash paid for Interest  -   - 
         
Non-cash investing and financing activities        
Initial recognition of operating lease right-of-use asset and operating lease liabilities $409,620  $- 

See notes to condensed consolidated financial statements.


QUANTA, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS FREIGHT SOLUTION, INC.)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


  
For the three months ended
July 31, 2018
  
For the three months ended
July 31, 2017
 
  (unaudited)  (unaudited) 
       
CASH FLOW FROM OPERATING ACTIVITIES:      
Net loss from continuing operations $(859,877) $(81,160)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:        
Depreciation & Amortization  12,411   - 
Common stock issued for services  12,127     
Effect of changes in operating assets and liabilities:        
Accounts Payable  (22,454)  - 
Change in Derivative Liability  485,385     
Payments for security deposit  (16,770)  - 
Sales Tax Payable  4,105   - 
Total Adjustments to reconcile Net Income to Net Cash provided by operations:  474,804   - 
Net cash provided by (used in) operating activities  (385,073)  
(81,160
)
         
CASH FLOW FROM INVESTING ACTIVITIES        
Purchase of machine  (175,000)  - 
Net cash provided used in investing activities
  (175,000)  -
         
CASH FLOW FROM FINANCING ACTIVITIES:        
Proceeds from loans  1,200   30,000 
Proceeds from private placement offering – common stock  747,518   7,000 
Net cash provided by financing activities  748,718   37,000 
CHANGE IN CASH  188,645   (44,160)
CASH AT BEGINNING OF PERIOD  23,048   107,753 
CASH AT END OF PERIOD $211,693  $63,593 
         
Supplemental Disclosures of Cash Flow Information:        
Cash Paid for Taxes $
-  $- 
Cash Paid for Interest $-  $- 
Non-Cash Financing and Investing Items: 
      
Related party negotiated non-related party loans forgiveness $18,538  $-
 
Related party negotiated accounts payable forgiveness $
247,000  $-
 
Change in accounts payable due to gain on sale of intangible asset $15,000  $- 
Notes payable converted into common stock along with derivative liability $1,563,511  $- 

See notes to consolidated financial statements

QUANTA, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULYMARCH 31, 2018 (UNAUDITED)


NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS


History AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Quanta, Inc (formerly “Bioanomaly”), a California corporation, was incorporated on December 27, 2016 and commenced operations in 2017. On April 28, 2016 we incorporated underJune 6, 2018, Bioanomaly completed a merger with Freight Solution, Inc (“Freight Solution”), a Nevada corporation. Pursuant to the lawsmerger agreement, all the shareholders of Bioanomaly exchanged all of their shares of Bioanomaly for an aggregate of 21,908,810 newly issued shares of Freight Solution’s common stock. After the merger was completed, the Bioanomaly shareholders owned approximately 77% of the Stateoutstanding shares of Nevada, ascommon stock of Freight Solution and the original shareholders of Freight Solution owned approximately 23% of the outstanding shares of common stock of Freight Solution. The transaction was accounted for as a reverse merger (recapitalization) with Bioanomaly deemed to be the accounting acquirer and Freight Solution deemed to be the legal acquirer. Upon the closing, Bioanomaly changed its name to Quanta, Inc. On June 5, 2018(the “Company”). The financial statements presented herein are those of the accounting acquirer (i.e., Bioanomaly) given the effect of the issuance of 6,500,000 shares of common stock upon completion of the transaction. In addition, the Company experienced a changeincurred expenses of $495,760 in control. In connection with the change in control thereverse merger.

The Company acquired Bioanomaly, Inc. through wholly-owned subsidiary. On July 11, 2018 we changed our name from Freight Solution, Inc. to Quanta, Inc. (Quanta, Inc. and hereinafter referred to as “Quanta”, the “Company”, “we” or “us”).


Following the merger, Freight Solution, Inc. adopted the business plan and operations of Bioanomaly, Inc. Bioanomaly, Inc.’s officers and directors became the officers and directors of Freight Solution, Inc. Bioanomaly, Inc, was incorporated under the laws of the state of California on December 27, 2016.

Quanta is an applied science business focused on increasing energy levels of plant matter and increasing performance within the human body.

ChangeGoing Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in Control


On June 5, 2018,the normal course of business. As reflected in the accompanying financial statements, for the three months ended March 31, 2019, the Company experiencedincurred a changenet loss of $182,781 and used cash in control (the “Change in Control”). Withoperating activities of $51,813, and at March 31, 2019, the Change in Control certain liabilitiesCompany had a had a working capital deficiency of $190,571. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the Company were forgiven and/or paid fordate that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on behalf ofthe Company’s December 31, 2018 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company by our founder,is unable to continue as a former officer and former directorgoing concern.

At March 31, 2019, the Company had cash on hand in the amount of the Company. Total liabilities at the time approximated $265,538 which included professional fees owed to a software development firm and other consultants. The board of directors nominated Mr. Eric Rice$82,723. Subsequent to the boardMarch 31, 2019 the Company received $142,500 for subscriptions for shares of directors on June 5, 2018. Mr. Rice became our Chief Executive Officer on June 5, 2018.


New Business

On June 6, 2018, Bioanomaly, Inc. executed an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), with us, as Freight Solution, Inc. a publicly traded Nevada corporation, and our wholly-owned subsidiary Quanta Acquisition Corp., a California corporation. Pursuant to the terms of the merger agreement, Quanta Acquisition merged with and into Bioanomaly, Inc. in a statutory reverse triangular merger (the “Merger”) with Bioanomaly, Inc. surviving as a wholly-owned subsidiary.  Following the merger we adopted the business plan and operations of Bioanomaly, Inc. Bioanomaly, Inc.’s officers and directors became our officers and directors.

As consideration for the Merger, we issued the shareholders of Bioanomaly, Inc. an aggregate of 25,900,000 shares (the “Share Exchange”) of our common stock par value $0.001 per share. Bioanomaly, Inc.’s existing shareholders along with Bioanomaly, Inc.’s convertible note holders received the requisite number of shares in the share exchange which reflected their ownership percentage prior to the issuance of any additional shares. Bioanomaly, Inc.’s three founders received 21,908,810 shares in the Share Exchange, the convertible note holders received 3,771,040 shares in the Share Exchange and one other individual received 220,150 shares in the Share Exchange as payment for services related to the Bioanomaly, Inc.’s Joint Venture.

Simultaneously with the Merger, we accepted subscriptions for 6,500,090 shares of our common stockbe issued in a private placement. Management estimates that the current funds on hand will be sufficient to continue operations through the next six months. The common stock was sold at a price of $0.20 per share for aggregate offering proceeds of $1,300,000. No fees were paid in association with this offering. In connection with the offering we issued warrantsCompany’s ability to purchase 3,000,000 shares of our common stock at an exercise price of $0.30 per share with an expiry of four years.

On July 11, 2018 the State of Nevada approved the name change from Freight Solution, Inc. to Quanta, Inc. completing the terms of the Merger Agreement. As a result of the Merger, Bioanomaly, Inc. became a wholly-owned subsidiary of Quanta, Inc. The Merger is treatedcontinue as a “tax free exchange” under Section 368 ofgoing concern is dependent upon improving its profitability and the Internal Revenue Code of 1986, as amended. As a result ofcontinuing financial support from its shareholders. Management believes the Merger, Bioanomaly, Inc.,existing shareholders or external financing will provide the surviving entity, became a wholly-owned subsidiary of Quanta, Inc. For accounting purposes, the Merger was treated as a “reverse acquisition” with Bioanomaly, Inc. as the accounting acquirer.

In connection with the Merger, 15,000,000 shares of our common stock were returnedadditional cash to treasury for no cost. Bioanomaly, Inc. shareholders own approximately sixty-three percent (63%) of our issued and outstanding common stock. At the time of the Merger,meet the Company’s board of directors and officers was reconstituted byobligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the resignation of our founder, Mr. Shane Ludington as Chairman, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer with the appointment of Mr. Eric Rice as Chairman, Chief Executive Officer, Chief Financial Officer and Mr. Jeffrey Doiron as President and Chief Operations Officer of the combined companies. On June 6, 2018,Company. Even if the Company approved an amendmentis able to obtain additional financing, if needed, it may contain undue restrictions on its Articlesoperations, in the case of Incorporation to changedebt financing, or cause substantial dilution for its name to Quanta, Inc. The Secretarystockholders, in the case of State-Nevada approved the name change in August 2018.

equity financing

Year end


The Company’s year-end is April 30th. Our wholly-owned subsidiary Bioanomaly, Inc.’s year-end is December 31st.

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim financial statements (July 31, 2018 (unaudited)) and basisBasis of presentation

The accompanying unaudited interimcondensed consolidated financial statements as of and related notesfor the three months ended March 31, 2019 and 2018, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth into Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflectIn the opinion of management, all adjustments (consisting of normal recurring accruals) which are, in the opinion of management,considered necessary tofor a fair statementpresentation of the financial position, results of operations and cash flows for the interim periods presented. Unaudited interimhave been included. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results of operations to be expected for athe full fiscal year.year ending December 31, 2019. The Condensed Consolidated Balance Sheet information as of December 31, 2018 was derived from the Company’s audited Consolidated Financial Statements as of and for the nine month period ended December 31, 2018, included in the Company’s Annual Report on Form 10-KT filed with the SEC on April 16, 2019. These financial statements should be read alongin conjunction with thethat report.

The consolidated financial statements include the accounts of the Company for the period ended April 30th (audited)Quanta Inc, and notes thereto.


its wholly-owned subsidiary, Bioanomaly, Inc. Intercompany transactions have been eliminated in consolidation.

Use of Estimatesestimates


The preparation of financial statements in conformity with U.S. GAAPgenerally accepted accounting principles requires the Companymanagement to make estimates and judgmentsassumptions that affect the reported amounts of assets and liabilities revenues and expenses, and related disclosuresdisclosure of contingent assets and liabilities. Theseliabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, impairment analysis of long-term assets, valuation allowance on deferred income taxes, assumptions used in valuing stock instruments issued for services, and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances.accrual of potential liabilities. Actual results couldmay differ from thosethese estimates.


Cash and Cash EquivalentsRevenue


The Company considers all highly liquid temporary cash investmentsfollows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts . ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with an original maturity of three months or less to be cash equivalents. At July 31, 2018 and April 30, 2018, cash equivalents totaled $211,692 and $6,314, respectively. There is no amount that is uninsured by the FDIC (Federal Deposit Insurance Corporation).


Accounts Receivable

We record accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and is charged to other income (expense)a customer, (2) identifying our performance obligations in the combined statements of operations. The Company calculates this allowance based on the history of write-offs, the level of past-due accounts based on the contractual terms of the receivables, and the relationships with, and the economic status of, the customers. Allowance for estimated, uncollectible accounts was determined to be unnecessary.

Property and Equipment

Property and equipment are recorded at cost.  Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retiredcontract or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260 - “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. For the three month periods ended July 31, 2018 and July 31, 2017, net loss per share is $(0.03) and $(0.01) respectively.

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement ofagreement, (3) determining the transaction price, including the constraint on variable consideration; (iv) allocation of(4) allocating the transaction price to the separate performance obligations;obligations, and (v) recognition of(5) recognizing revenue when (or as) the Company satisfiesas each performance obligation.

obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that wethe Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scopeits clients.

The Company’s revenue consists of ASC 606, the Company at contract inception reviews the contract to determine which performance obligations the Company must deliver and whichrevenue from sales of these performance obligations are distinct. The Company recognizes revenues as the amount of the transaction price is allocated to each respective performance obligation when the performance obligation is satisfied or as it is to be satisfied.its CBD products. Generally, the Company’s performance obligations are transferred to the customer at a point in time, typically upon delivery.


delivery of products. The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.

Cost of revenue includes direct costs and fees related to the sale of our products.

Advertising costsLeases


Advertising costs are anticipated

Prior to January 1, 2019, the Company accounted for leases under ASC 840,Accounting for Leases . Effective January 1, 2019, the Company adopted the guidance of ASC 842,Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The implementation of ASC 842 did not have a material impact on the Company’s consolidated financial statements and did not have a significant impact on our liquidity or on our compliance with our financial covenants associated with our loans. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be expensed as incurred. Duringreported under the accounting standards in effect for those periods. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets of $409,620, lease liabilities for operating leases of $409,620, and a zero cumulative-effect adjustment to accumulated deficit. The Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (“short-term leases”) and elected to not separate lease components and non-lease components for its long-term leases. Lease expense is recognized on a straight-line basis over the lease term. See Note 3 for further information regarding the impact of the adoption of ASC 842 on the Company’s financial statements.

Net Loss per Share

Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding warrants and convertible notes are exercised and the proceeds are used to purchase common stock at the average market price during the period. Warrants and convertible notes may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants.

For the three month periodsmonths ended JulyMarch 31, 2019, the dilutive impact of warrants exercisable into 3,000,000 shares of the Company’s common stock have been excluded because their impact on the loss per share is anti-dilutive. For the three months ended March 31, 2018, and April 30, 2018, advertising costs totaled $11,586 and $0, respectively.


the dilutive impact of notes payable convertible into 3,771,000 shares of the Company’s common stock have been excluded because their impact on the loss per share is anti-dilutive.

Fair Value of Financial Instruments


The Company appliesfollows the accountingauthoritative guidance underissued by the Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance definesfor fair value measurements. Fair value is defined as the price that would be received from sellingto sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.


The guidance also establishes aA fair value hierarchy for measurements ofwas established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

∙Level 1 - quoted market prices in active markets for identical assets or liabilities.
∙Level 2 - inputs other than Level 1 are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets are not active, or other inputs are observable or can be corroborated by observable market data for substantially

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s assumptions.

The Company is required to use of observable market data if such data is available without undue cost and effort.

The Company believes the full term of the assets or liabilities.

∙Level 3 - unobservable inputs are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

The carrying amount ofreported in the Company’s financial instrumentsbalance sheet for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and notes payable, approximate their fair value asvalues because of July 31, 2018 and April 30, 2018 due to the short-term nature of these instruments.

financial instruments

Recently IssuedConcentrations of risks

For the three months ended March 31, 2019 and March 31, 2018, no customer accounted for 10% or more of revenue or accounts receivable at period-end.

For the three months ended March 31, 2019 and March 31, 2018, no vendor accounted for 10% or more of the Company’s cost of revenues, or accounts payable at period-end.

The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits, which may from time to time exceed the federally insured limit of $250,000. The Company believes that no significant concentration of credit risk exists with respect to its cash balances because of its assessment of the creditworthiness and financial viability of the financial institution.

Segments

The Company operates in one segment for the development and distribution of our CBD products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements.

Recent Accounting Pronouncements


Company’s management evaluated recent accounting pronouncements through July 31, 2018

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred-loss impairment methodology and believe nonerequires immediate recognition of them would have a material effectestimated credit losses expected to occur for most financial assets, including trade receivables. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the Company’s financial statements exceptamount by which fair value is below amortized cost. ASU 2016-13 is effective for the following.


WithCompany beginning January 1, 2020 and early adoption is permitted. The Company does not believe the acquisitionpotential impact of the new business we are subjectguidance and related codification improvements will be material to ASC Topic 606, Revenue from Contracts with Customers. The revenue standard requires companies to identify contractual performance obligationsits financial position, results of operations and determine whether revenue should be recognized at a point in time or over time based on when control of goods and services transfers to a customer. As a result of the adoption of the standard, we will record changes in the timing of revenue recognition and in the classification between revenues and costs. The new standard does not currently impact the cash or the economics of underlying customer contracts we may acquire with the New Business (see Note 1 – Organization).

flows.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on ourthe Company’s present or future consolidated financial statements.


8NOTE 2 - DISTRIBUTION AGREEMENT

Income Taxes

Income taxes are computed using

Effective January 22, 2019, the asset and liability method of accounting. UnderCompany entered into an agreement with Della Strada Wholesale for the asset and liability method, a deferred tax asset or liability is recognized for estimated future tax effects attributableexclusive rights to temporary differences and carry-forwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only todistribute the extent, based on available evidence; it is more likely than not such benefits will be realized. The Company’s deferred tax assets were fully reserved for as of July 31, 2018 and April 30, 2018.


The Company accounts for income taxes applying FASB ASC 740, which requires the recognition of deferred tax liabilities and assets for expected future tax consequences of events have been includedproducts in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basesstate of assets and liabilities using enacted tax rates in effectColorado for the year in which the differences are expected to reverse.

NOTE 3 – RELATED PARTY TRANSACTIONS

Related party transactions for the three month periods ended July 31, 2018 and July 31, 2017 were as follows:

years. In connection with the Change in Control (see Note 1 – Organization) transaction included our founder who negotiated and guaranteed the forgiveness of certain debts of the Company. The Company recognized related party debt forgiveness of approximately $265,538 from nonrelated party notes payable and accounts payable negotiated and guaranteed by our founder. This transaction was recognized as an increase in additionally paid in capital from the debt relief. This transaction occurred on or about June 5, 2018. Our founder, a former officer and former director guaranteed the forgiveness of these debts and received no compensation from it.

During the three month period ended July 31, 2018, the Company paid shareholders of its wholly owned subsidiary’s, Mr. Eric Rice, Mr. Michael Oirech, and Mr. Blake Gillette $3,500, $5,090 and $15,782, respectively, for their services.

During the three month period ended July 31, 2017, the Company paid its wholly owned subsidiary’s three founders, Mr. Eric Rice, Mr. Todd Hickman, and Mr. Blake Gillette who are shareholders $0, $1,500 and $13,800, respectively, for their services.

In connection with the Merger Agreement, Mr. Rice’s original shares increased by 9,743,571 shares of common stock, Mr. Hickman’s original shares increased by 962,953 shares of common stock, and Mr. Gillette’s original shares increased by 1,202,284 shares of common stock. The resulting share increase was caused by a forward share split associated with the share exchange. The number of shares did not increase or decrease the parties percentage of ownership prior to or in connection with the merger or share exchange.

During the three month period ended July 31, 2017,consideration, the Company received a loantotal one-time payment of $100,000 which will be recognized as revenue on a straight line basis over the three year life of the agreement. For the three months ended March 31, 2019, the Company recognized revenue related to this agreement in the amount of $20,000 from Mr. Hickman$6,210. For the three months ended March 31, 2018, no distribution fee revenue was recorded.

NOTE 3 - OPERATING LEASE

In June 2018, the Company entered into a noncancelable operating lease for its headquarters office requiring payments of $8,385 per month, payments increasing 5% each year, and repaid that amount byending on July 31, 2017.


No2023. At March 31, 2019, the remaining lease term was 4.5 years. The Company does not have any other related party transactions occurredleases.

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

  

Three Months Ended

March 31, 2019

 
Lease Cost    
Operating lease cost (included in general and administration in the Company’s unaudited condensed statement of operations) $33,087 
     
Other Information    
Cash paid for amounts included in the measurement of lease liabilities for the first quarter 2019 $25,155 
Weighted average remaining lease term – operating leases (in years)  4.5 
Average discount rate – operating leases  8.3%

The supplemental balance sheet information related to leases for the period is as follows:

  At March 31, 2019 
Operating leases    
Long-term right-of-use assets $390,378 
     
Short-term operating lease liabilities $73,800 
Long-term operating lease liabilities  324,510 
Total operating lease liabilities $398,310 

Maturities of the Company’s lease liabilities are as follows:

Year Ending Operating Leases 
2019 (remaining 9 months) $77,561 
2020  108,292 
2021  113,707 
2022  119,392 
2023  61,152 
Total lease payments  480,104 
Less: Imputed interest/present value discount  (81,794)
Present value of lease liabilities $398,310 

Lease expenses were $33,087 and $17,400 during the three month periodsmonths ended JulyMarch 31, 2019 and 2018, and July 31, 2017.


respectively.

NOTE 4 – SHARE CAPITAL


The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 25,000,000 shares of its $0.001 par value preferred stock.

Preferred stockSTOCKHOLDERS’ EQUITY

No shares of blank check preferred stock have been issued.

Common stock

On April 28, 2016,

For the Company issued to its founder, 11,000,000 shares of its $0.001 par value common stock at a price of $0.001 per share. These services were valued at $11,000. On April 29, 2016, the Company issued to its founder 4,000,000 shares of its $0.001 par value common stock at a price of $0.001 per share. In acquiring certain intangible assets we recorded their value at $4,000.


On August 23, 2017 the Company completed a public offering of its equity registered on Form S-1. The Company issued 7,000,000 shares of its common stock to 34 investors. The investors paid $0.01 per share for a combined investment of $70,000. Onthree months ended March 15, 2018 and on March 22, 2018, respectively, 100,000 shares and 400,000 shares of the Company’s common stock were returned to treasury by certain shareholders for no consideration.

On June 6, 2018, the Company executed the Merger Agreement (see Note 1 – Organization). In connection with the Merger Agreement 15,000,000 shares of common stock acquired in the Change in Control transaction were returned to treasury and cancelled. In connection with the Merger Agreement the shareholders of Bioanomaly, received 25,900,000 shares of our common stock. In connection with the Change in Control,31, 2019, the Company received $172,866 for subscriptions for 6,500,090to purchase 345,750 shares of its common stock in a private placement offering. The investors paidat a purchase price of $0.20$0.50 per share

Subsequent to March 31, 2019 the Company received an additional $142,500 in subscriptions for an aggregate offering proceedsadditional 285,000 shares of $1,300,000.


common stock to be issued. As of JulyMarch 31, 2018, there were 38,900,0902019, and through the date of the financial statements, the shares had not been issued. The private placement offering is expected to terminate upon the sale of 3,000,000 shares of our common stock issued and outstanding.

Deferred offering costs

Deferred offering costs consisted of accounting fees, legal fees and other fees incurred relatedthe Company is obligated to our direct public offering. Upon completion ofissue the public offering in 2017, we netted deferred offering costs of $34,161 againstshares once the net offering proceeds of $70,000 received in that offering. No deferred offering costs were incurred in connection with the June 6, 2018 private placement of our common stock or the aforementioned warrants.

offering is completed.

NOTE 5 – CONVERTIBLE DEBENTURES


As of July 31,WARRANTS

In 2018, all convertible notes had been converted. As of December 31, 2017, the Company issued $785,000warrants exercisable into 3,000,000 shares of common stock. The warrants were fully vested when issued, have an exercise price of $0.30 per share, and expire in convertible notes2022. A summary of which were held by four non-related parties. The convertible notes were due and payable two years after their issue date. The convertible notes bear interest at 5% per annum payable. Interest payments are deferred until maturity. The convertible noteholders hold an option to convert principal, plus accrued and unpaid interest, into common stock ofwarrant activity during the Company at a price equal to eighty percent (80%) of the average of the common stock issued for the Company’s next round of financing that may occur through the issuance of equity (the “Next Equity Financing”) and subsequent to the maturity date.


At the time of conversion, there was $1,015,000 in convertible notes. These notes were converted in sequence with the merger. Total shares issuable for all convertible notes was approximately 3,771,000 shares.

three months ended March 31, 2019 is presented below:

  Number of
warrants		  Weighted
Average
Exercise Price		  Contractual
Life
in Years		 
          
Warrants Outstanding and Exercisable as of December 31, 2018  3,000,000  $0.30   4.00 
Granted  -  $-   - 
Exercised  -  $-   - 
Expired  -  $-   - 
Warrants Outstanding and Exercisable as of March 31, 2019  3,000,000  $0.30   3.75 

The following table summarizes convertible notes payableinformation concerning the Company’s stock warrants as of JulyMarch 31, 20182019:

   Warrants Outstanding  Warrants Exercisable 
Exercise Prices  Number
Outstanding		  Average
Remaining
Contractual Life
(in years)		  Weighted
Average
Exercise Price		  Number Exercisable  Average
Remaining
Contractual Life
(in years)		  Weighted
Average
Exercise Price		 
                           
$0.30   3,000,000   3.75  $0.30   3,000,000   3.75  $0.30 

At March 31, 2019 and December 31, 2017:


  July 31, 2018  
Bioanomaly, Inc.
as of
December 31, 2017
 
Convertible note payable - 1 holder, principal and interest due and payable 24 months from investment, monthly payments of interest - 5.0% per annum. Convertible into common stock, 20% discount to price target along with valuation cap set at $11 million (total market capitalization) $-  $40,000 
Convertible note payable - 1 holder, principal and interest due and payable 24 months from investment, monthly payments of interest - 5.0% per annum. Convertible into common stock, 20% discount to price target along with valuation cap set at $8 million (total market capitalization)  -   350,000 
Convertible note payable - 1 holder, principal and interest due and payable 24 months from investment, monthly payments of interest - 5.0% per annum. Convertible into common stock, 20% discount to price target along with valuation cap set at $3 million (total market capitalization)  -   45,000 
Convertible note payable - 1 holder, principal and interest due and payable 24 months from investment, monthly payments of interest - 5.0% per annum. Convertible into common stock, 20% discount to price target along with valuation cap set at $6 million (total market capitalization)  -   350,000 
Total convertible notes payable  -   785,000 
Less current maturities  -   (785,000)
Long term portion of convertible notes payable $-  $- 

Subsequent to December 31, 2017 entered into several other convertible notes. The terms were similar to the convertible notes entered into during 2017. Valuation caps ranged from $3 million to $11 million. Total additional convertible notes in the amount of $230,000 were received by the Company.

The Company analyzed its conversion option for derivative accounting under ASC 815-15 Derivatives and Hedging and determined the beneficial conversion feature afforded the convertible notes should be recorded as a discount to debt. The convertible notes conversion feature was not effective immediately and would have been only afforded to the holder upon maturity. With no expressed limit to the number of shares to be ultimately delivered upon settlement this may necessitate the Company recognizing a discount equal to the entire debt instrument if it were not for the fact the Company conducted a Next Equity Financing transaction after period end whereby new shares of the Company were issued and the holders of the convertible notes received shares at a 20% discount to the Next Equity Financing pricing.

The convertible notes and its conversion features was measured against fair value at the end of each reporting period with the Company recording the change in fair value to earnings through its Statement of Operations.

The Company accounts for fair value of its conversion features in accordance with ASC 815-15, Derivatives and Hedging; Embedded Derivatives. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of its results of operations. The Company valued the embedded derivatives using the Black-Scholes pricing model. Fair2018, intrinsic value of the conversion featurewarrants was $485,385 for the period ended June 6approximately $600,000.

th, 2018. As of June 6th, the notes were converted and recorded into paid in capital.


Expected volatility was based on the historical volatility of several publicly traded companies common stock. Historical volatility was computed using daily pricing observations for comparable periods of time. The Company believed this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected term. The Company had no reason to believe future volatility over the expected remaining life of these common stock equivalents was likely to differ materially from historical volatility. Expected life was based on one year due to the expiry of maturity. The risk-free rate was based on the U.S. Treasury rate corresponded to the expected term of the common stock equivalents.

NOTE 6 – JOINT VENTURES

In March 2017, the Company through its wholly owned subsidiary entered into a joint venture and exclusive license agreement (the “Joint Venture”) for the development, design, and manufacture of certain technology for commercialization. The Joint Venture obligates the Company to a contribution of $350,000 in order to pay for the cost of the technology machine. The Joint Venture provides for the exclusive use of a certain patent developed by Dr. Arthur Grant Mikaelian (the “Patent Holder”). The patent has an expiry of 2037. Profits from the Joint Venture are allocated 50/50 between the Company and the Patent Holder. Payments are required to be paid monthly to the Patent Holder. No amounts were due to the Joint Venture as of July 31, 2018. Both parties to the Joint Venture are compliant with the contractual terms for each period reported.

On September 12, 2018, the Company through its wholly owned subsidiary entered into a joint venture with a Canadian corporation to expand the Quanta brand, technology and product lines in Canada (the “Canadian Joint Venture”). The Canadian Joint Venture requires us to contribute $302,755 to its operations (see Note 16 – Subsequent Events).

NOTE 7 – COMMITMENTS AND CONTINGENCIES

There are no future minimum commitments or contingencies as of July 31, 2018 except for the following:

On June 6th, 2018, the Company entered into a noncancelable operating lease on its headquarters requiring payments of $8,385 per month, with lease payments increase of 5% each year, ending on July 31, 2023. Future minimal rental payments under this noncancelable operating lease as of July 31 is:

July 31, 2019 $103,555 
2020  108,732 
2021  114,169 
2022  119,878 
2023  125,871 
Total $572,205 

The Company has financial commitmentsa profit sharing agreement with an individual in consideration of $302,755 for equipment purchases under its Joint Venture and its Canadian Joint Venturethe Company’s exclusive use of patented technology developed by the individual. Pursuant to the Patent Holder over the next twelve months.


The Company has not assessed its entire financial obligation or contingent liability for income tax withholdingagreement, profits (as defined) from the misclassification of independent contractors thatCompany’s operations will be employees under the laws of the state of California. The California Supreme Court decision on April 30, 2018, held there is a presumption that all workers are employees, and a business classifying a worker as an independent contractor bears the burden of establishing such a classification is proper under a new test called the “ABC test.” This test or compliance thereof, byallocated 50% to the Company could be held liable for penalties, interest, tax withholdings which we believe to be immaterial.

NOTE 8 –PROPERTY AND EQUIPMENT

During the year December 31, 2017, the Company pursuantand 50% to the Joint Venture purchased certain technological equipment for $347,500. The equipment is being depreciated on the straight line method over 7 years. Depreciation for this equipment has been determined to be 7 years.

Duringindividual. For the three months ended JulyMarch 31, 2018. The Company paid a deposit with the Patent Holder for another piece of equipment under the Joint Venture. As of July 31, 2018, the equipment is 50% complete,2019 and under the terms of the Joint Venture has incurred costs of $175,000 and remitted an additional amount to the Patent Holder.

Depreciation expense for the three-month periods ended July 31, 2018 and July 31, 2017 is $12,411 and $0, respectively.

  As of July 31, 2018  As of April 30, 2018 
Furniture and equipment $-  $- 
Machinery – Technology Equipment CIP  175,000   - 
Machinery – Technology Equipment  347,500   - 
Total property and equipment  522,500
   - 
Less accumulated depreciation  (37,233)  - 
  $485,267  $- 

NOTE 9 – INCOME TAXES

A reconciliation of statutory tax rates to effective tax rates were as follows in each of the periods presented:

  
For the three
month period
ended July 31,
2018
  
For the three
month period
ended July 31,
2017
 
Federal income taxes at statutory rate  21.0%  35.0%
State income taxes at statutory rate  8.84%  8.84%
Valuation allowance  (29.84%)  (43.84%)
Effective tax rate  0.0%  0.0%

As of JulyMarch 31, 2018, the Company hadincurred net losses and therefore no allocation of profit is due.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a net operatingvariety of factors, many of which are not within our control. These factors include by are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

Summary of Business

Quanta is an applied science company focused on increasing energy levels in plant matter to increase performance within the human body. Our proprietary technology uses quantum mechanics to increase bio-activity of targeted molecules to enhance the desired effects. We specialize in potentiating rare naturally occurring elements to create impactful and sustainable healing solutions that can be as powerful and predictable as pharmaceutical drugs.

We offer our technology as a platform, making it accessible to existing high-quality product makers with existing distribution channels, as well as consumer products. Our mission is to power as many impactful, high-performing wholly organic solutions as possible through wholly-owned product lines and a series of licensing and distribution partnerships.

Bioanomaly Inc. was founded in 2016 by a group of technology and industry entrepreneurs and provides licensed technology solutions to natural product companies in multiple verticals. Our headquarters is located in Los Angeles, California.

BUSINESS MODEL

Though we offer a small portfolio of our own products, the Quanta business model is also focused on co-branding partnerships with top-quality product developers and manufacturers through our “Powered by Quanta” platform. Our business model is very similar to the “Intel Inside” program. We help top brands in cannabis, anti-aging, health and wellness, stress management, pain management, fitness and brain performance enhancement increase the bio-activity of selected elements within their existing formulas to create new, higher performing product lines. In exchange for access to our technology we collect either monthly fees and/or profit share on new revenue created. With regard to cannabis partnerships, we do not participate in revenue, rather we provide our technology and services for a flat monthly fee.

We are currently working with brands that use the following elements in their product lines:

●Turmeric
●Arnica
●Amino Acids
●Lipids
●Plant Proteins
●Cannabinoids
●Stem Cells
●Kratom
●Eucalyptus
●Kanna

ADDRESSABLE MARKETS

Though our initial focus has been cannabis, Quanta has the unique ability to work within any market that leverages plant matter elements for pain relief, anti-inflammatory and quality of life products. The Company is also entering the nutraceutical and phytoceutical industries and has plans to expand into multiple sectors in the coming years.

“POWERED BY QUANTA”

Our “Powered by Quanta” program is a licensing platform designed to integrate our technology into existing top quality products around the globe. Once we align with a brand that meets our criteria of having both great products and large distribution, we build and install one of our remotely operated machines in their facility. Each time the partner makes products they simply place their materials in the chamber and answer 5 simple questions. This information is then sent to one of our scientists who will then input polarization specifications to fit the licensee’s needs. Within the confines of the Quanta polarization machines, our technology uses electric and magnetic frequencies to communicate with and re-train the way electrons and the nucleus interact within targeted atoms. The result of this process is a molecule with higher energy/vibrational levels which helps to create a more impactful chemical reaction in the body. Once their batch is complete, we notify the partner to remove it from the machine. They then place “Powered by Quanta” on their products and collect a premium. 100% of our machines are run remotely on a dedicated fiber optic line for quality control, security and ease of use for our partners. Currently each machine can polarize 7.5 liters of oils every 4.25 hours.

GROWTH STRATEGY

Licensing

Our current focus is solidifying licensing/co-branding partnerships with the top companies in the cannabis sector, though we are entering into multiple other markets as well. In the cannabis industry we are focused on working with high quality THC brands. This allows us to offer the public a standardized experience with higher energy and reduced side effects without having to become a licensed cannabis company. Both recreational and medicinal THC brands are starting to realize the importance of market differentiation and a need for a standardized consumer experience. We are offering limited licenses in states which have legalized medicinal and/or recreational marijuana use. We are also looking to work with a small, select group of top CBD brands with large distribution and solid reputations.

CBD Products

Our technology significantly increases the bio-activity of CBD which we believe puts us in a strong position for the future. We will work with top brands, but we will also be offering our own hemp derived CBD products online and in traditional stores. Currently we are preparing to launch our fast-acting and high performing CBD Muscle Rub nationwide.

MARKETING AND DISTRIBUTION

We offer a scientific solution that is difficult for the public to understand, which makes education a large part of the marketing plan for Quanta. We plan to launch campaigns to offer free samples of our products in exchange for consumer information to build lists and eCommerce revenues. We have found that the best way to sell Quanta’s products is to have people try them and feel the difference, rather than to confuse them with how the company creates such performance.

We are focused on influencer marketing, traditional and digital media, internet marketing and product placement as a primary means of marketing for Quanta. We believe that high quality content in conjunction with pre-built digital distribution will be the best value for the dollar. We have solidified and are currently solidifying partnerships with very visible influencers and celebrities to help with awareness and digital distribution.

PRODUCTS AND SERVICES

Polarization Technology Licensing.

The Company owns proprietary technology that uses frequency training to improve the performance of cannabinoids and other natural elements. For THC products our core technology provides very specific advantages for partner brands such as increased energy and greatly reduced side effects (paranoia, anxiety, laziness and loss of cognitive functions) while standardizing the overall THC consumer experience. And for CBD products we offer increased time to activation, increased duration of performance and

The Company intends to monetize this intellectual property through 1) licensing agreements in conjunction with cannabis brands that adhere to state medical and recreational marijuana laws and 2) establishing business relationships with scientific research organizations to develop biologic applications based upon specific plant research and development methodologies.

The Company owns intellectual property (recipes and process/methods) for use in medical marijuana topicals, edibles, vape, sub-lingual and lozenges. The Company’s proprietary muscle rub is unlike other topicals of which may take up to an hour or more to take effect. Based upon preliminary results, our muscle rub generally takes effect within a period of 1-3 minutes. We believe the rapid acting characteristics of our muscle rub will overcome the major obstacle of penetrating the mainstream pain and muscle tension relief market. In addition to the muscle rub, we have other forms of topicals under development that assist with anti-aging, inflammation, sexual performance, testosterone balancing and weight loss.

Objectives

Our current strategy is to seek out new co-branding and licensing opportunities for our intellectual property while constantly looking for new strategic corporate and product acquisitions. We are also focused on developing and acquiring new patents, trade secrets, trademarks and other intellectual property.

Results of Operations

Summary of Key Results

Result of Operations for the three months ended March 31, 2019 as compared to the three months ended March 31, 2018

Revenue– Revenues for the for the three months ended March 31, 2019 were $230,568, compared to revenues for the three months ended March 31, 2018 of $35,265.

Expenses -Operating expenses for the three months ended March 31, 2019 were $350,456. The Company incurred $162,916 in administrative and other costs associated with operations, including legal and professional fees of $16,564.

Operating expenses for the three months ended March 31, 2018 were $258,359. The Company incurred $79,744 in administrative and other costs associated with operations, including legal and professional fees of $7,785. The company incurred $62,489 in research and development costs.

Net loss -Net loss for tax purposesthe three months ended March 31, 2019 and March 31, 2018 was $182,781 and $271,094. We recorded no provision for federal income taxes for either period.

Critical Accounting Policies and Estimates

Use of $409,538.


estimates

The Company’s policy ispreparation of financial statements in conformity with generally accepted accounting principles requires management to recognize potential interestmake estimates and penalties accruedassumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, unrecognized tax benefits withinamong others, impairment analysis of long-term assets, valuation allowance on deferred income tax expense. Fortaxes, assumptions used in valuing stock instruments issued for services, and the periods ended July 31, 2018 the Company did not recognize any interest or penalties in its statementaccrual of operations, nor did it have any interest or penalties accrued in its balance sheets at July 31, 2018 relating to unrecognized tax benefits.


potential liabilities. Actual results may differ from these estimates.

Under the provisions of ASC 740, Accounting for Uncertainty in Income TaxesRevenue, the Company identified no significant uncertain tax positions in 2018.

The Company files income tax returns in U.S. jurisdiction. There are no federalfollows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts . ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or state income tax examinations underway for these, and tax returns for the current year are still open to examination.


NOTE 10 - NOTE PAYABLE

Prior to the Change in Control we executed several promissory notesagreements with nonrelated partiesa customer, (2) identifying our performance obligations in the aggregate of $75,071 of which $24,738 was outstanding at the end of April 30, 2018. The unsecured promissory notes bear interest at 0% per annum and are due and payable upon demand. The Company in connection with the public offering repaid approximately $59,800 of these two nonrelated parties. In connection with the Change in Control our founder negotiated and guaranteed the forgiveness of certain debts of the Company. The Company recognized debt forgiveness of $18,538 from the remaining nonrelated party note payable.

During the three month period ended July 31, 2018, the Company entered into a new promissory note with a nonrelated party for a total of $25,000. The $25,000 note payable and interest of $841 was paid in full prior to July 2018.

Short-term notes payable at July 31, 2018 and April 30, 2018 was $110,000 and $0, respectively.

NOTE 11 – CONCENTRATION OF SALES AND SEGMENTED DISCLOSURE

For the three month periods ended July 31, 2018 and July 31, 2017, there were no concentration of sales with respect to the Company’s revenues. Revenue for all customers during these three periods was in the form of product sales and services. No single customer made up more than 10%contract or more of total revenues.

The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement ofagreement, (3) determining the transaction price, including the constraint on variable consideration; (iv) allocation of(4) allocating the transaction price to the separate performance obligations;obligations, and (v) recognition of(5) recognizing revenue when (or as) the Company satisfiesas each performance obligation.

obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the entityCompany will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scopeits clients.

The Company’s revenue consists of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and whichrevenue from sales of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied.its CBD products. Generally, the Company’s performance obligations are transferred to customersthe customer at a point in time, typically upon delivery.


NOTE 12 – DEBT FORGIVENESS AND GAIN ON SALE OF ASSETS

Withdelivery of products. The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the Change in Control transaction our founder, negotiated and guaranteed the settlementestablishment of certain accounts payable ofreserves against service revenue. Additionally, to date, the Company resultinghas not incurred incremental costs in forgivenessobtaining a client contract.

Cost of debt; the Company recognizedrevenue includes direct costs and fees related party debt forgiveness of approximately $265,538 which was credited to additional paid in capital. Furthermore, in connection with the Change in Control transaction our founder, negotiated the sale of certain intangible assets with a net value of $0 to be paid through the settlement of accounts payable of $15,000. We recognized a gain on sale of assets of $15,000.


NOTE 13 – WARRANTS

our products.

In June 2018, 3,000,000 warrant shares were issued in connection with the sale of private placement offering. The fair value of the warrants were calculated based on the Black-Scholes model. Recently Issued Accounting Pronouncements

See Note 5. The warrants are through private placement as1 to the timingcondensed consolidated financial statements.

Liquidity and Capital Resources

We have yet to establish any history of the issuance of the warrants, as there was not a true public market ofprofitable operations. For the three monthsmonth period ended JulyMarch 31, 2018. The value would be accounted for2019, we incurred a loss from operations of $182,781, used cash in operations of $51,813 and at March 31, 2019, we had a working capital deficiency of $190,571. These factors raise substantial doubt about our ability to and from paid in capital, and therefore there is no financial statement impact as of July 31, 2018. The warrants will expire in 4 years as of the issuance date. The warrants have not been exercised.


For the Black Scholes model calculation, we calculated a volatility rate averaging 74.8% based on other companies that with similar operations and size. Historical volatility was computed using daily pricing observations for recent periods. The Company believed this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected term. The risk-free rate was based on the U.S. Treasury rate that corresponded to the expected term of the common stock equivalents. As of July 31, 2018, the fair value of these warrants was $3,333,621.

The following table summarizes the assumptions used to estimate the fair value of warrants granted during the three months ended July 31, 2018:

As of July 31, 2018

Expected dividend yield

0

%

Weighted-average expected volatility

74.8

%

Weighted-average risk-free interest rate

2.77-2.85

%

Expected life of warrants

4 years


The Company’s outstanding and exercisable warrants as of July 31, 2018 and December 31, 2017 are presented below:

             
  
Number
Outstanding
  
Weighted
Average
Exercise Price
  
Contractual
Life in
Years
  
Fair
Value
 
             
Warrants Outstanding and Exercisable as of December 31, 2017  -  $-   -  $- 
                 
Warrants granted (June 2018)
  3,000,000  $0.30   4.00  $1,748,920 
                 
Warrants Forfeited  -  $-   -  $- 
                 
Warrants Exercised  -  $-   -  $- 
                 
Warrants Outstanding and Exercisable as of July 31, 2018  3,000,000  $0.30   4.00  $3,333,621 

NOTE 14 – INTANGIBLE ASSETS

Intangible assets with finite lives are amortized over their estimated useful life. The Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate the carrying amount may not be recoverable. The original estimate of an asset’s useful life and the impact of an event or circumstance on either an asset’s useful life or carrying value involve significant judgment.

On April 29, 2016 the Company acquired certain intangible assets from its founder which consisted of a business plan, along with costs related to development of internal-use software to be used in its operations. The total value attributable to the intangible assets purchased by the Company was $4,000. On June 6th, 2018, the Company recognized $15,000 from the sale of intangible assets (see Note 12 – Debt Forgiveness and Gain on Sale of Assets)

Intangible assets includes the following:

  July 31, 2018  April 30, 2018 
       
Intangible assets consisting of certain development costs and purchased software $-  $4,000 
Less: Accumulated amortization  -   (4,000)
Net property and equipment $-  $- 

NOTE 15 – SUBSCRIPTION RECEIVABLE

During the three months ended July 31, 2018, the Company issued a net total of 6,500,000 shares of common stock for $0.20 per share in the private placement offering conducted in connection with the Merger. The total of $50,000 of that private placement offering had not been received as of July 31, 2018 and this amount is presented on the balance sheet as common stock subscription receivable, a contra-equity account. In addition, $13,000 of the escrow account was not remitted by the escrow agent as of July 31, 2018. The Company collected the $63,000 subsequent to July 31, 2018.

NOTE 16 – BUSINESS COMBINATION

The Merger Agreement will be accounted forcontinue as a reverse acquisition in accordance with the Financial Accounting Standards Board (ASC 805, Business Combinations). Quanta management has evaluated the guidance contained in ASC 805 with respect to the identification of the acquirer in the Merger Agreement and concluded, based on a consideration of the pertinent facts and circumstances, Bioanomaly will have acquired Freight Solution, for financial accounting purposes. Accordingly, the Merger Agreement has been accounted for in the unaudited pro forma combined financial statements as a continuation of the financial statements of Quanta together with an exchange of shares of Freight Solution, and certain former shareholders of Freight Solution continue in their ownership of Freight Solution along and a re-capitalization of the equity of Freight Solution

(1)Certain assets and liabilities of Freight Solution, Inc. were assumed by Quanta as part of the merger for the period ending July 31, 3018 such as cash and cash equivalents in the amount of $86; prepaid expense in the amount of $54, and; intangible assets, net in the amount of $0 (note intangible assets were sold for settlement of accounts payable of $15,000, recognizing a gain on sale of $15,000.

(2)Our founder, a former officer and former director, in connection with the change in control of the Company guaranteed and negotiated the settlement of certain outstanding debts resulting in forgiveness of that debt; total debt forgiveness was approximately $265,538; recognized gain on the sale of intangible assets of $15,000 in a reduction accounts payable through a sale of the intangible asset; and $28 in bank service charges and fees.

(3)Elimination of common stock of $25,900 offset against paid in capital, and elimination of accumulated deficit of Freight Solution, Inc. of ($337,569).

(4)The Company recognized paid in capital through the issuance of common stock through the merger of $15,900 recorded at par value to Bioanomaly along with par value officer services provided for common stock of $12,129, and derivative liabilities associated with our convertible notes payable of $3,771. The Company recognized paid in capital through the issuance of common stock through the merger of $6,500 recorded at par value Freight Solution, the cancelation of ($21,500) recognized paid in capital through the cancelation of common stock through the merger, and $6,500 recognized paid in capital recorded at par value Freight Solutiongoing concern within one year after the merger on July 13, 2018. The total eliminated for the consolidation was recorded at $25,900 and recognized through paid in capital.

(5)The Company recognized the legal fees and other costs associated with the merger of $51,760 accounted for as merger expenses in our Statement of Operations as well as contribution into paid in capital of $51,760.

(6)At the time of the merger, subscription escrow proceeds from the private placement were still receivable from the escrow agent of $63,000. These were recorded as contra equity, and eliminated on the pro forma. These escrow proceeds were received in August 2018.

(7)Total cost to acquire the control shares of the Company by Bioanomaly, Inc. was $444,000 ($419,000 payment for shares, and $25,000 for a finder’s fee) recorded as part of the gain/(loss) on merger.

NOTE 17 – SUBSEQUENT EVENTS

The Company evaluated all events that occurred after the balance sheet date of July 31, 2018 through the date the financial statements wereare issued. The only significant events occurred duringIn addition, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the year ended December 31, 2018 with respect to this period were:

On September 12, 2018,uncertainty. This going concern opinion could materially limit our ability to raise additional funds through the issuance of new debt or equity securities and future reports on our financial statements may also include an explanatory paragraph with respect to our ability to continue as a going concern.

At March 31, 2019, the Company entered into a joint venture with a Canadian corporationhad cash on hand in the amount of $82,723. Subsequent to expand the Quanta brand, technology and product lines into the Canadian markets. The Canadian Joint Venture requiresMarch 31, 2019, the Company to contribute $302,755 to its operations.


On November 6th, 2018 the Company issued 300,000 shares to a vendorreceived $142,500 for services performed. Those services were valued at $90,000 or $0.30 per share.

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.

POST-EXCHANGE BENEFICIAL OWNERSHIP OF THE COMPANY’S COMMON STOCK

The following table provides information, immediately prior to and after the Merger, regarding beneficial ownership of our Common Stock by: (i) each person known to us who beneficially owns more than five percent of our Common Stock; (ii) each of our directors; (iii) each of our executive officers; and (iv) all of our directors and executive officers as a group.

The number of shares beneficially owned is determined under rules promulgated by the SEC, and the information is not necessarily indicative of beneficial ownershipsubscriptions for any other purpose. The shares in the tables does not, however, constitute an admission the named stockholder is a direct or indirect beneficial owner of those shares.

Name and Address of Beneficial Owner(A) 
Amount
and
Nature of
Beneficial
Ownership
Before the
Share
Exchange
  
Percentage
(D)
  
Amount
and Nature
of
Beneficial
Ownership
After the
Share
Exchange
  
Percentage
(E)
 
             
Eric Rice (B)  8,181,818   81.82%  17,925,390   46.08%
                 
Jeffery Doiron (President)  -   -   -   - 
                 
Directors and executive officers as a group (2 Persons)  8,181,818   81.82%  17,925,390   46.08%
                 
Blake Gillette (C)  1,009,576   10.10%  2,211,860   5.68%

(A) Unless otherwise noted above, the address of the persons and entities listed in the table is Quanta, Inc., 3606 W Magnolia Blvd, Burbank, California 91505.

(B) Our Chief Executive Officer and Chairman, owned 8,181,818 shares of common stock prior to the Exchange. Mr. Rice and the other shareholders of Bioanomaly recieved a forward exchange of their respective ownership in Bioanomaly, prior to their ownership in Quanta, Inc. through the Share Exchange. Mr. Rice may be deemed to be a control person of the shares owned by such entity. Mr. Rice received 2.19 shares for every share he owned in Bioanomaly. Mr. Rice claimed beneficial ownership of these shares as of this date.

(C) Executive Vice President. As part of the Exchange which occurred on June 6, 2018 Mr. Blake Gillette received 2,211,860 shares of the Company. Mr. Gillette received 2.19 shares for every share he owned in Bioanomaly.

(D) These percentages are based on the 25,900,000 shares of common stock to be exchangedissued in a private placement. Management estimates that the current funds on hand will be sufficient to continue operations through the next 6 months. The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the Share Exchange by Bioanomalycase of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing

As of March 31, 2019 and 2018, we owed $175,850 and $80,000 respectively in connection with the Merger with Quanta, Inc. These numbers are based on Bioanomaly, Inc. as a stand alone entity.


(E) These percentages are based on the 38,900,090 sharesshort term loans from unrelated parties, respectively. The proceeds of common stock issued and outstanding of Quanta, Inc. as of December 6, 2018.

MANAGEMENT

which were used for basic working capital purposes.

Position
Eric Rice41Founder, Chairman and Chief Executive Officer
Jeffery Doiron45President and Chief Operations Officer

Chairman and Chief Executive Officer. Prior to founding Quanta in 2016, Mr. Rice founded several successful technology companies and was a pioneer in the digital media sector. He has built companies in several verticals including financial services, digital media, artificial intelligence, biotechnology, live gaming and cannabis. Mr. Rice leads Quanta’s operations and overall strategic direction. He holds a Bachelor of Arts Degree in SCS from Indiana University.  Mr. Rice’s status as the founder along with his extensive experience in marketing led to the conclusion that he is qualified to serve in these capacities.

Jeffrey Doiron 45, President. Before taking over operations for Quanta, Mr. Doiron founded and grew one of the continent’s most innovative advanced digital agencies. He uses his vast experience to connect new and exciting ideas with the right partners and brands. He guides the team to unlock their most creative selves and drive forward momentum for the company. The Company concluded Mr. Doiron’s past experiences and training render him qualified to serve in these capacities.

DESCRIPTION OF SECURITIES

General

The Company’s authorized capital stock consists of 100,000,000 shares of common stock, par value $0.001 per share and 25,000,000 shares of preferred stock, par value $0.001 per share. After the closing of the Merger, and assuming the issuance of the Exchange Shares, the shares of common stock sold in the private placement offering and the retirement of 15,000,000 shares of common stock, the Company had approximately 38,900,090 shares of common stock issued and outstanding as of July 31, 2018.

Common Stock

Stockholders shall not be entitled as of right to subscribe for, purchase, or otherwise acquire any shares of any class of the Company which the Company proposes to issue or any rights or options which the Company proposes to grant for the purchase of shares of any class of the Company or for the purchase of any shares, bonds, securities, or obligations of the Company which are convertible or exchangeable for, or which carry any rights, to subscribe for, purchase, or otherwise acquire shares of any class of the Company; and any and all of such shares, bonds, securities, or obligations of the Company, whether now or hereafter authorized or created may be issued, or may be reissued or transferred if the same have been reacquired and have treasury status, and any and all of such rights and options may be granted by the Board of Directors to such persons, firms, corporations, and associations, and for such lawful consideration, and on such terms, as the Board of Directors in its discretion may determine, without first offering the same, or any thereof, to any said holder.

Item 3.
Quantitative and Qualitative Disclosures about Market Risk.

We are a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K and are not

Not required to file information under this item.


for Smaller Reporting Companies.

Item 4.
Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company’s management, including its Chief Executive Officer, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company’s desired disclosure control objectives. In designing periods specified in the SEC’s rules and forms, and that such information is accumulated and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our Chief Executive Officer and Chief AccountingFinancial Officer, is responsible for establishing and maintainingMr. Eric Rice, evaluated the effectiveness of our disclosure controls and procedures for(as defined in Rule 13a-15(e) under the Company.



(a)
Evaluation of Disclosure Controls and Procedures

Based on his evaluationSecurities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly ReportReport. Based on Form 10-Q, our Chief Executive Officer and Chief Accounting Officer hasthe evaluation, Mr. Rice concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are not effective in timely alerting him to ensurematerial information relating to us required to be disclosed by usincluded in report we file or submitour periodic SEC filings.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the Exchange Act is recorded, processed, summarizedstandards of the Public Company Accounting Oversight Board were: (1) We do not have written documentation of our internal control policies and reportedprocedures, and (2) We do not have sufficient segregation of duties within the time periods specified in the Securities and Exchange Commission’s (“SECs”) rules and forms and to ensure information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicatedaccounting functions. Due to our management, including our Chief Executive Officer to allow timely decisions regarding required disclosure.



(b)
Changes in the Company’s Internal Controls over Financial Reporting

Other than described above, there have beensize and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal controlcontrols over financial reporting that occurred during the most recently completed fiscal quarter ended March 31, 2019 that have materially affected, or areis reasonably likely to materially affect, the Company’sour internal controlcontrols over financial reporting.  Recently the Company hired a financial professional with experience in financial reporting, the creation of and management of internal control systems, as well as the ability to assist management in accounting controls and financial disclosure controls are necessary. This person has been hired on with the Company but does not hold the position of Chief Accounting Officer. That role still resides with Mr. Eric Rice.



PART II – OTHER INFORMATION

Item 1.
Legal Proceedings.

From time to time, we are a party to, or otherwise involved in, legal proceedings arising in the normal and ordinary course of business. As of the date of this report, we are not aware of any other proceeding, threatened or pending, against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position.


Item 1A.Risk Factors.

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of the Company’s AnnualTransition Report on Form 10-K10-KT for the year endedtransition period from April 30,1, 2018 to December 31, 2018.

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.

On June 6, 2018, in connection with

For the Merger Agreement, three months ended March 31, 2019, the Company issued an aggregate of 25,900,000received $172,866 for subscriptions to purchase 345,750 shares of its common stock to the former shareholders of Bioanomaly, Inc.


On June 8, 2018, the Company accepted subscriptions for 6,500,000 shares of the Company’s common stock in a private placement offering at a purchase price of $0.20$0.50 per share

Subsequent to March 31, 2019 the Company received an additional $142,500 in subscriptions for an aggregateadditional 285,000 shares of common stock to be issued. As of March 31, 2019, and through the date of the financial statements, the shares had not been issued. The private placement offering amountis expected to terminate upon the sale of $1,300,000.


On June 8, 2018, the Company accepted subscriptions from two non-affiliates for warrants to purchase 3,000,000 shares of the Company’s common stock at an exercise price of $0.30 per share expiring in four years.

Theand the Company relied onis obligated to issue the exemptions from federal registration under Section 4(2) ofshares once the Securities Act of 1933, as amended, Regulation S, and Rule 506 promulgated thereunder, based on its belief that the issuance of such securities did not involve a publicprivate placement offering as there were fewer than 35 “non-accredited” investors, all of whom, either alone or through a purchaser representative, had such knowledge and experience in financial and business matters so that each was capable of evaluating the risks of the investment and/or were located outside the United States.

is completed.

Item 3.
Defaults upon Senior Securities.

None.


Item 4.
Mine Safety Disclosures.

Not applicable.


Item 5.
Other Information.

None.

Item 6.
Exhibits.Exhibits.

The following exhibits are incorporated into this Form 10-Q Quarterly Report:



* Filed along with this document


SIGNATURES

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


 Quanta, IncQUANTA, INC
  
Dated: December 21, 2018May 17, 2019By:/s/Eric Rice
  Eric Rice
  Chairman, Chief Executive Officer (Principal Executive Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.

Signature
Title
Date
Chief Executive Officer
(Principal Executive Officer and Principal Accounting Officer)
December 21, 2018
/s/Eric Rice
Eric Rice
/s/Jeffrey DoironPresident and Chief Operations Officer
December 21, 2018
Jeffrey Doiron
/s/Blake Gillette
Executive Vice-President
December 21, 2018
Blake Gillette


19