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 ~~June 30, 2020~~March 31, 2021

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

For the transition period from ____________________ to ____________________

Commission File Number: 000-56025

Quanta, Inc.

(Exact name of registrant as specified in its charter)

Nevada		81-2749032
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~3606 W. Magnolia Blvd.,~~632 S Glenwood Pl, Burbank, CA		~~91505~~91506
(Address of principal executive offices)		(Zip Code)

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

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

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 [ ]

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

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
	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 [X]

~~As of August 19, 2020,~~May 22, 2021, the registrant had ~~57,723,500~~176,458,527 shares of Common Stock outstanding.

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION

ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets – ~~June 30, 2020~~March 31, 2021 (Unaudited) and December 31, ~~2019~~2020	3

	Condensed Consolidated Statements of Operations (Unaudited) – Three Months ended March 31, 2021 and ~~Six Months Ended June 30,~~ 2020 ~~and 2019~~	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) - Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	5

	Condensed Consolidated Statements of Cash Flows (Unaudited) - ~~Six~~Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	76

	Notes to Condensed Consolidated Financial Statements (Unaudited) – Three ~~and Six~~ Months Ended ~~June 30,~~March 31 and 2020 ~~and 2019~~	87

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1915
ITEM 3.	Quantitative And Qualitative Disclosures About Market Risk	2518
ITEM 4.	Controls And Procedures	2518

PART II	OTHER INFORMATION	2619

ITEM 1	Legal Proceedings	2619
ITEM 1A.	Risk Factors	2619
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2619
ITEM 3.	Defaults Upon Senior Securities	2619
ITEM 4.	Mine Safety Disclosures	2619
ITEM 5.	Other Information	2619
ITEM 6.	Exhibits	2719

Signatures		2820

PART I – FINANCIAL INFORMATION

Item ~~1.Financial~~1. Financial Information.

QUANTA, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

~~(amounts in thousands, except share amounts)~~

	June 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
	(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash	$	30		$	433		$	313,525		$	6,270
Accounts receivable		18			28			-			685
Accounts receivable (net of reserve of $49,700) – related party								149,100			-
Deferred charges – related party								-			134,704
Inventories		161			123			44,009			19,220
Prepaid expenses		-			7
Prepaid production cost								100,000			-
Total current assets		209			591			606,634			160,879

Equipment, net		287			313			195,919			200,523
Operating lease right-of-use asset, net		680			333			341,844			362,227
Deposits		34			34			16,883			16,883

Total assets	$	1,210		$	1,271		$	1,161,280		$	740,512

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	141		$	74		$	618,195		$	673,494
Notes payable		182			56
Convertible note payable (net of discount of $479 and $255, respectively)		157			57
Notes payable (net of deferred finance charges of $38,171 and $42,261 at March 31, 2021 and December 31, 2020, respectively)								400,165			482,724
Convertible note payable (net of discount of $29,369 and $539,282 at March 31, 2021 and December 31, 2020, respectively)								1,393,752			1,074,814
Deferred revenue, license agreement		33			33			27,002			34,818
Operating lease liabilities, short-term		167			86			102,400			100,901
Derivative liabilities		293			400
Settlement Reserve								235,759			235,759
Total current liabilities		973			706			2,777,272			2,602,510

Long term liabilities
Deferred revenue, licenses agreement, long-term		17			34
Notes payable, long term		509						454,327			451,368
Operating lease liabilities, long-term		525			252			273,714			294,880
Total liabilities		2,024			992			3,505,314			3,348,758

Commitments and contingencies:

Mezzanine equity:
Series B preferred stock, $0.00001 par value, 9,000 shares authorized, 9,000 and -0- issued and outstanding at March 31, 2021 and December 31, 2020, respectively								1,522,198			-
Series C preferred stock, $0.00001 par value, 1,000 shares authorized, 1,000 and -0- issued and outstanding at March 31, 2021 and December 31, 2020, respectively								169,133			-
Total Mezzanine equity								1,691,331			-

Stockholders’ equity (deficit):
Preferred stock, $0.001 par value; 25,000,000 shares authorized; 2,500,000 issued and outstanding		2			-			2,500			2,500
Common stock, $0.001 par value; 100,000,000 shares authorized; 56,900,978 and 49,087,255 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		57			49
Shares to be issued (3,626,763 and 7,318,519 as of June 30, 2020 and December 31, 2019, respectively)		3,116			2,848
Common stock, $0.001 par value; 500,000,000 shares authorized; 99,897,748 and 46,756,970 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively								99,900			46,757
Shares to be issued (4,875,000 and 4,875,000 as of March 31, 2021 and December 31, 2020, respectively)								3,802,047			3,641,868
Additional paid-in capital		7,474			5,620			9,492,252			10,102,805
Accumulated deficit		(11,463	)		(8,238	)		(17,295,903	)		(16,402,176	)
Total stockholders’ equity (deficit)		(814	)		279
Total Quanta, Inc. stockholders deficit								(3,899,204	)		(2,608,246	)
Noncontrolling interest in consolidated subsidiary								(136,161	)		-
Total stockholders’ deficit								(4,035,365	)		(2,608,246	)

Total liabilities and stockholders’ equity (deficit)	$	1,210		$	1,271
Total liabilities and stockholders’ deficit							$	1,161,280		$	740,512

See notes to condensed consolidated financial statements

QUANTA, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

~~(amounts in thousands, except share and per share amounts)~~(Unaudited)

~~(Unaudited)~~

	Three months ended March 31, 2021			Three months ended March 31, 2020
	(Unaudited)			(Unaudited)
Sales, net (includes sales to related party of $198,800 for the three months ended March 31, 2021)	$	318,807		$	350,349
License revenue		7,816			6,455
Total revenue		326,623			356,804
Cost of goods sold		34,984			28,365
Gross profit		291,639			328,439

Operating expenses:
Employee compensation and contractors		129,422			382,071
Selling, general, and administrative (includes royalty of $105,000 and $75,000 to related party for the three months ended March 31, 2021 and 2020, respectively)		3,016,277			912,240
Research and development		130,825			77,876
Total operating expenses		3,276,524			1,372,187
Loss from operations		(2,984,885	)		(1,043,748	)

Other income (expense):
Interest expense		(67,817	)		(188,637	)
Discount amortization		(31,945	)		-
Private placement		-			(262,000	)
Change in fair value derivative		-			135,139
Other income and expense, net		(99,762	)		(315,498	)

Net loss		(3,084,647	)		(1,359,246	)

Net loss attributable to noncontrolling interest		136,161			-

Net loss attributable to Quanta, Inc.	$	(2,948,486	)	$	(1,359,246	)

Net loss per share, basic and diluted	$	(0.05	)	$	(0.02	)
Weighted average common shares outstanding – basic and diluted		63,300,000			39,200,090

Three months ended
June 30, 2020 Three months ended
June 30, 2019 Six months ended
June 30, 2020 Six months ended
June 30, 2019
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Sales, net $ 307 $ 309 $ 658 $ 533
Distributor license fees 11 9 17 15
Total revenue 318 318 675 548
Cost of goods sold 71 101 99 160
Gross profit 247 217 576 388

Operating expenses:
Compensation and benefits 405 306 787 493
Selling, general, and administrative 1,741 1,719 2,653 1,882
Research and development 167 82 245 82
Total operating expenses 2,313 2,107 3,685 2,457
Loss from operations (2,066 ) (1,890 ) (3,109 ) (2,069 )

Other income (expense):
Change in fair value of derivative liability 148 - 283 -
Gain on extinguishment of derivative liability 286 - 286 -
Private placement costs (17 ) (279 )
Interest expense (217 ) (16 ) (406 ) (20 )
Other income (expense), net 200 (16 ) (116 ) (20 )

Net loss $ (1,866 ) $ (1,906 ) $ (3,225 ) $ (2,089 )

Net loss per share, basic and diluted $ (0.03 ) $ (0.05 ) $ (0.06 ) $ (0.05 )
Weighted average common shares outstanding – basic and diluted 58,728,752 39,223,665 57,512,526 39,211,943

See notes to condensed consolidated financial statements

QUANTA, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~ STOCKHOLDERS’ EQUITY (DEFICIT)

~~(amounts in thousands, except share amounts)~~

(Unaudited)

Three months ended June 30, 2020 (Unaudited)
Series A Preferred stock, par value $0.001 Common stock, par value $0.001 Additional
Paid-in Shares
to be Accumulated Total
Stockholders’
Shares Amount Shares Amount Capital issued deficit Deficit
Balance, March 31, 2020 - $ - 54,198,366 $ 55 $ 6,224 $ 2,774 $ (9,597 ) $ (544 )
Issuance of shares 18,519 - 5 (5 ) -
Shares issued for cash - - 277,778 - 75 - - 75
Fair value of vested options - - - - 102 - - 102
Fair value of shares for services - - 1,250,117 1 186 336 - 523
Fair value of shares issued to employees and officer - - 451,198 - 51 - - 51
Fair value of preferred shares issued to officer 2,500,000 2 - - 463 - - 465
Beneficial conversion feature of issued convertible notes - - - 291 - - 291
Fair value of shares issued for loan fees - - 705,000 1 77 11 - 89
Net loss - - - - - - (1,866 ) (1,866 )
Balance, June 30, 2020 (Unaudited) 2,500,000 $ 2 56,900,978 $ 57 $ 7,474 $ 3,116 $ (11,463 ) $ (814 )

Three months ended March 31, 2021 (Unaudited)

Six months ended June 30, 2020 (Unaudited)
Series A Preferred stock, par value $0.001 Common stock, par value $0.001 Additional
Paid-in Shares
to be Accumulated Total
Stockholders’
Shares Amount Shares Amount Capital issued deficit Deficit
Balance, December 31, 2019 - $ - 49,087,255 $ 49 $ 5,620 $ 2,848 $ (8,238 ) $ 279
Issuance of shares 5,018,519 5 500 (505 ) -
Shares issued for cash - - 388,889 1 104 - - 105
Fair value of vested options - - - - 182 - - 182
Fair value of shares issued for services - - 1,250,117 1 186 762 - 949
Fair value of shares issued to employees and officer - - 451,198 - 51 - - 51
Fair value of preferred shares issued to officer 2,500,000 2 - - 463 - - 465
Beneficial conversion feature of issued convertible notes - - - - 291 - - 291
Fair value of shares issued for loan fees - - 705,000 1 77 11 - 89
Net loss - - - - - - (3,225 ) (3,225 )
Balance, June 30, 2020 (Unaudited) 2,500,000 $ 2 56,900,978 $ 57 $ 7,474 $ 3,116 $ (11,463 ) $ (814 )

	Mezzanine Equity -				Mezzanine Equity -
	Series B				Series C				Series A
	Preferred Stock,				Preferred Stock,				Preferred Stock,				Common Stock
	par value $0.00001				par value $0.00001				par value $0.001				par value $0.001				Additional Paid-in			Shares To be		Accumulated			Non Controlling			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Issued		Deficit			Interest			Deficit
Balance December 31, 2020		-	$	-		-	$	-		2,500,000		2,500		46,756,970	$	46,757	$	10,102,805		$	3,641,868	$	(16,402,176	)	$	-		$	(2,608,246	)

Adjustment for adoption of ASU 2020-6		-		-		-		-		-		-		-		-		(2,557,812	)		-		2,054,759			-			(503,053	)
Issuance of shares
Shares issued for cash		-		-		-		-		-		-		32,475,000		32,475		981,525			-		-			-			1,014,000
Fair value of shares for services		-		-		1,000		169,133		-		-		6,000,000		6,000		512,950			-		-			-			518,950
Fair value of shares issued to employess and officer		9,000		1,522,198		-		-		-		-		-		-		-			-		-			-			-
Fair value of vested options		-		-		-		-		-		-		-		-		70,994					-			-			70,994
Fair value of restricted shares		-		-		-		-		-		-		-		-		-			160,179		-			-			160,179
Shares issued for conversion of convertible notes		-		-		-		-		-		-		14,665,778		14,668		381,790			-		-			-			396,458

Net loss		-		-		-		-		-		-		-		-		-			-		(2,948,486	)		(136,161	)	$	(3,084,647	)
Balance March 31, 2021		9,000	$	1,522,198		1,000	$	169,133		2,500,000	$	2,500		99,897,748	$	99,900	$	9,492,252		$	3,802,047	$	(17,295,903	)	$	(136,161	)	$	(4,035,365	)

Three months ended March 31, 2020 (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, 2019		49,087,255	$	49,087	$	5,619,733	$	2,847,868		$	(8,237,747	)	$	278,941

Issuance of shares		5,000,000		5,000		495,000		(500,000	))		-			-

Shares issued for cash		111,111		1,111		28,889		-			-			30,000

Fair value of vested options		-		-		79,995		-			-			79,995

Fair value of shares for services		-		-		-		426,000			-			426,000

Net loss		-		-				-			(1,359,245	)		(1,359,245	)

Balance, March 31, 2020 (Unaudited)		54,198,366	$	55,198	$	6,223,617	$	2,773,868		$	(9,596,992	)	$	(544,309	))

Three months ended June 30, 2019 (Unaudited)
Common Stock, par
value $0.001 Additional
Number of shares Amount paid-in capital Shares to be issued Accumulated deficit Total
Balance, March 31, 2019 39,200,090 $ 39 $ 2,360 $ 479 $ (2,633 ) $ 245
Shares to be issued - - - 452 - 452
Fair value of shares for services 32,505 1 16 1,372 - 1,389
Fair value of shares issued for cashless exercise of warrants 2,590,910 2 (2 ) - - -
Net loss - - - (1,906 ) (1,906 )
Balance, June 30, 2019 (Unaudited) 41,823,505 $ 42 $ 2,374 $ 2,303 $ (4,539 ) $ 180

Six months ended June 30, 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 $ 2,362 $ 306 $ (2,450 ) $ 255
Shares to be issued - - - 625 - 625
Shares for services 32,505 1 16 1,372 - 1,389
Shares issued for cashless exercise of warrants 2,590,910 2 (2 ) - - -
Net loss - - - - (2,089 ) (2,089 )
Balance, June 30, 2019 (Unaudited) 41,823,505 $ 42 $ 2,374 $ 2,303 $ (4,539 ) $ 180

~~See notes to condensed consolidated financial statements~~

QUANTA, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(amounts in thousands)~~

(Unaudited)

	Six Months Ended June 30, 2020			Six Months Ended June 30, 2019			Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

CASH FLOW FROM OPERATING ACTIVITIES:
Net loss	$	(3,225	)	$	(2,089	)	$	(3,084,647	)	$	(1,359,245	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		106			72			17,584			51,729
Fair value of shares issued for services								688,083			426,409
Fair value of vested options		182			-			70,994			79,995
Fair value of shares issued for services		949			1,389
Fair value of common shares issued to employees and officer		51			-
Fair value of preferred shares issued to officer		465			-
Fair value of vested restricted shares								160,179			-
Fair value of Series B preferred shares issued to officer								1,522,198			-
Amortization of convertible note discount								24,360			178,660
Amortization of note payable discount								7,050
Change in fair value of derivative		(283	)		-			-			(135,139	)
Gain on extinguishment of derivative liability		(286	)		-
Private placement costs		279			-			-			262,000
Amortization of convertible note discount		380			-
Amortization of right-of-use asset		85			39			20,383			41,208
Interest accrual		-			20
Fees paid through conversion of convertible notes								12,983			-
Changes in operating assets and liabilities:
Accounts receivable		10			(22	)		685			9,104
Accounts receivable, related party								(198,800	)
Allowance for doubtful accounts								49,700			-
Deferred expenses, related party								134,704			-
Inventories		(38	)		-			(24,789	)		(20,975	)
Prepaid Expenses		7			-
Prepaid production costs								(100,000	)		7,500
Accounts payable and accrued liabilities		69			16			(55,300	)		54,169
Deferred revenue		(17	)		85			(7,816	)		(7,808	)
Operating lease liabilities		(78	)		(28	)		(19,667	)		(38,751	)
Net cash used in operating activities		(1,344	)		(518	)		(782,116	)		(451,145	)

CASH FLOW FROM INVESTING ACTIVITIES:

Deposits								-			(30,000	)
Purchase of equipment		(80	)		(85	)		(12,980	)		(80,272	)
Net cash used in investment activities		(80	)		(85	)		(12,980	)		(110,272	)

CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from shares to be issued		-			625
Proceeds from shares issued for cash		105			-
Proceeds from convertibles notes payable		563			-			175,000			153,000
Proceeds from notes payable		679			13			10,000			-
Principal payments of convertible notes		(282	)		-
Principal payments of notes payable		(44	)		(42	)		(96,649	)		(7,500	)
Costs of recapitalization		-			-
Proceeds from shares issued for cash								1,014,000			30,000
Net cash provided by financing activities		1,021			596			1,102,351			175,500

Increase (decrease) in cash		(403	)		(7	)		307,255			(385,917	)
Cash and cash equivalents, beginning of period		433			36			6,270			433,133
Cash and cash equivalents, end of period	$	30		$	29		$	313,525		$	47,226

Supplemental Disclosures of Cash Flow Information:
Cash paid for taxes		-			-			-			-
Cash paid for Interest		17			-
Cash paid for interest								-			-

Non-cash investing and financing activities
Recognition of right-of-use asset and liability	$	432		$	410
Original issuance discount		43			-
Issue convertible notes payable for fees		30			-
Recognition of beneficial conversion feature		291			-
Shares issued for fee discount		88			-
Derivative allocated to discount		183			-
Issuance of shares to be issued		505			-
Fair value of shares for loan fee		76			-
Fair value shares to be issued for loan fee		11			-
Adjustment for adoption of ASU 2020-06								503,053			-
Common shares issued for conversion of convertible notes								396,458			-
Derivative liabilities allocated to convertible note discount								-			153,000
Recognition of operating lease right-of-use asset and operating lease liabilities							$	-		$	431,402

See notes to condensed consolidated financial statements

QUANTA, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE ~~AND SI X~~ MONTHS ENDED ~~JUNE 30,~~MARCH 31, 2021 AND 2020 ~~AND 2019~~ (UNAUDITED)

~~(Amounts in thousands, except share and per share amounts)~~

NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Quanta, Inc. (the “Company”) is an applied science company focused on increasing energy levels in plant matter to increase performance within the human body. The Company’s operations are based in Burbank, California.

On ~~April 28, 2016,~~December 21, 2020, the Company entered into a Securities Exchange Agreement with Medolife Rx, Inc., a Wyoming corporation, (“Medolife Rx”) pursuant to which, the Company agreed to acquire 51% of Medolife Rx in exchange for 9,000 shares of newly created Series B Convertible Preferred Stock. On January 14, 2021, the Company completed the acquisition of 51% of Medolife, which had nominal assets, liabilities, and operations. (see Notes 12 and 13).

Quanta, Inc. is a biotechnology company actively involved in both the pharmaceutical and nutraceutical industries. It mostly operates through its majority-owned subsidiary Medolife which is focused on the research and development of therapeutics for multiple medical indications, including viral infections such as the SARS-CoV-2 virus and multiple forms of cancer.

Medolife was ~~incorporated as Freight Solution, Inc.~~founded by Dr. Arthur Mikaelian who pioneered the polarization technology that the company uses in all of its products which has been shown to increase the potency of synthetic and organic compounds.

Basis of presentation-Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the ~~State~~United States of ~~Nevada. Effective June 6, 2018,~~America (“U.S. GAAP”) for interim financial information and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) to 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. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results of operations for the three months ended March 31, 2021, are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2021. These financial statements should be read in conjunction with the financial statements of the Company ~~(then known as Bioanomaly Inc.) was acquired by Freight Solution~~for the year ended December 31, 2020 and notes thereto contained in ~~a transaction accounted for as a reverse merger transaction. On July 11, 2018,~~the Annual Report on Form 10-K of the Company ~~changed~~as filed with the SEC on April 15, 2021.

The consolidated financial statements include the accounts of Quanta Inc, and its ~~name to Quanta,~~51% owned subsidiary, Medolife Rx, Inc. All intercompany balances and transactions have been eliminated in consolidation.

Going 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 the normal course of business. As reflected in the accompanying financial statements, for the ~~six months~~quarter ended ~~June 30, 2020,~~March 31, 2021, the Company incurred a net loss of ~~$3,225~~$2,948,486 and used cash in operating activities of ~~$1,344,~~$782,116, and at ~~June 30, 2020,~~March 31, 2021, the Company had a stockholders’ deficit of ~~$814.~~$4,035,365. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in ~~their~~its report on the Company’s December 31, ~~2019 audited~~2020 financial statements, raised 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 is unable to continue as a going concern.

At ~~June 30, 2020,~~March 31, 2021, the Company had cash on hand in the amount of ~~$30.~~$313,525. Subsequent to ~~June 30, 2020,~~March 31, 2021, the Company received ~~$250 from the issuance~~$1,231,000 for subscriptions to purchase 73,895,644 shares of ~~five notes payable.~~common stock. Management estimates that the current funds on hand will be sufficient to continue operations through the next six 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 case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing

~~Basis of presentation and principles of Consolidation~~

The accompanying unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2020 and 2019, 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”) to 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. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2020. The Condensed Consolidated Balance Sheet information as of December 31, 2019 was derived from the Company’s audited Consolidated Financial Statements as of and for year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K/A filed with the SEC on April 10, 2020. These financial statements should be read in conjunction with that report.

~~The consolidated financial statements include the accounts of Quanta Inc, and its wholly-owned subsidiary, Bioanomaly, Inc. Intercompany transactions have been eliminated in consolidation.~~

~~COVID-19~~

The global outbreak of COVID-19 has negatively affected the U.S. and global economies and has negatively impacted businesses, workforces, customers, and created significant volatility of financial markets. It has also disrupted the normal operations of many businesses, including ours. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the duration and severity of the outbreak, the length of restrictions and business closures, and the impact on capital and financial markets, all of which are highly uncertain and cannot be predicted. This outbreak could decrease spending, adversely affect demand for our products and harm our business and results of operations. In the quarter ended June 30, 2020, we believe the COVID-19 pandemic did impact our operating results as shipments to customers in the second quarter were down 13% from the first quarter of the year. However, we have not observed any material impairments of our assets or a significant change in the fair value of our assets due to the COVID-19 pandemic. While it is not possible at this time to estimate the full impact that COVID-19 will have on our business, restrictions resulting from COVID-19 on general economic conditions could, among other things, impair our ability to raise capital when needed. This situation is changing rapidly, and additional impacts may arise that we are not aware of currently.

Use of estimates

The preparation of financial statements in conformity with ~~accounting principles~~ generally accepted ~~in the United States of America~~accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date 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, allowance for doubtful accounts receivable, impairment analysis of long-term assets, valuation allowance on deferred income taxes, assumptions used in valuing stock instruments issued for services, assumptions made in valuing derivative liabilities, and the accrual of potential liabilities. Actual results may differ from these estimates.

Revenue recognition

The Company follows the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. 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 a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

Product Sales—~~Revenue from sales~~Substantially all of the Company’s ~~CBD~~revenue is derived from product sales. Product revenue and costs of sales are recognized when control of the products ~~is recognized at the point in time when the Company’s performance obligations with the applicable customers have been satisfied. Revenue is recorded at the transaction price,~~transfers to our customer, which ~~is the amount of consideration the Company expects to receive in exchange for transferring products to a customer. Generally, the~~generally occurs upon shipment from our facilities. The Company’s performance obligations are ~~transferred to the customer~~satisfied at ~~a point in time, typically upon delivery of products.~~that time. The Company ~~historically has offered~~does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts ~~rebates, rights of return,~~that could cause revenue to be allocated or other allowances to clients which would result in the establishment of reserves against revenue. The Company sells its products (i) directly to customers (“DTC”) through online orders from our websites, and DTC sales at conventions and events; and (ii) through wholesalers, including physicians, pharmacies, fitness studios, grocery stores, and other organizations.adjusted over time.

License revenue— Revenue from symbolic IP is recognized over the access period to the Company’s IP (see Note 2).

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

~~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 Company determines if an arrangement contains a lease at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leasesConvertible Notes with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability (see Note 5).

~~Derivative Financial Instruments~~Fixed Rate Conversion Options

The Company ~~evaluates its financial instruments~~may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to ~~determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities,~~ the ~~derivative instrument is initially recorded~~market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its ~~fair value~~fixed monetary amount by measuring and ~~is then re-valued at each reporting~~recording a premium, as applicable, on the Note date with ~~changes~~a charge to interest expense in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the June 31, 2020, reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting periodaccordance with ASC 480 - “Distinguishing Liabilities from Equity”.

~~Stock Compensation~~Stock-based compensation

The Company periodically issues stock options, warrants, shares of common stock, and restricted stock unit awards, as share-based compensation to employees and ~~non-employees in non-capital raising transactions for services and for financing costs.~~non-employees. The Company accounts for ~~such grants issued and vesting~~its share-based compensation in accordance with FASB ASC 718, Compensation – Stock Compensation (Topic 718). Stock-based compensation cost for employees is measured at the grant date, based on ~~ASC 718, whereby~~ the estimated fair value of the award, and is ~~measured on the date of grant and~~ recognized as expense over the requisite service period. Recognition of compensation expense onfor non-employees is in the ~~straight-line basis over~~same period and manner as if the ~~vesting period. The~~ Company ~~recognizes~~had paid cash for the ~~fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered.~~services.

The fair value of the Company’s stock options is estimated using athe Black-Scholes-Merton ~~option pricing~~Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton ~~option pricing~~Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton ~~option pricing~~Option Pricing model could materially affect compensation expense recorded in future periods.

Prepaid production costs

In February 2021, the Company’s subsidiary Medolife Rx entered into a collaboration and joint development agreement with a company (the “Agent) for Medolife to produce some of its products in the Agent’s facility. Medolife Rx agreed to pay the Agent $300,000 for the right to use the Agents production facility for a term of five years. Medolife Rx will also pay a production fee, as defined, to the Agent for any production. The Company determined that there is no distinct asset that it is purchasing from the Agent and will record amortization of the prepaid fee ratably over the life of the contract. As of March 31, 2021, the Company had paid the Agent $100,000 of the fee.

Advertising costs

Advertising costs are expensed as incurred. During the ~~six months~~quarters ended ~~June 30,~~March 31, 2021 and March 31, 2020, ~~and 2019,~~ advertising costs totaled ~~$42~~$57,959 and ~~$25,~~$33,682, respectively.

Research and Development Costs

Costs incurred for research and development are expensed as incurred. During the ~~six months~~quarters ended ~~June 30,~~March 31, 2021 and March 31, 2020, ~~and 2019,~~ research and development costs totaled ~~$245~~$130,825 and ~~$167,~~$77,876, respectively and include salaries, benefits, and overhead costs of personnel conducting research and development of the Company’s products.

Net Loss per Share

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding ~~for~~during the ~~period, excluding shares of unvested restricted common stock.~~period. Shares ~~of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. At June 30, 2020, shares~~ used in the calculation of basic net loss per common share include ~~3,500,000 of~~ vested but unissued shares underlying awards of restricted common stock. Diluted ~~earnings~~loss per share ~~is computed by dividing~~reflects the ~~net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive~~ potential ~~common shares had been issued,~~dilution, using the treasury stock ~~method. Shares of restricted~~method that could occur if securities or other contracts to issue common stock ~~are included~~were exercised or converted into common stock or resulted in the ~~diluted weighted average number~~issuance of common ~~shares~~stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding ~~from~~warrants and convertible notes are exercised and the ~~date they~~proceeds are ~~granted. Potential~~used to purchase common ~~shares are excluded from~~stock at the ~~computation~~average market price during the period. Warrants and convertible notes may have a dilutive effect under the treasury stock method only when ~~their effect is anti-dilutive.~~the average market price of the common stock during the period exceeds the exercise price of the options and warrants.

For the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, the dilutive impact of common stock equivalents, e.g. stock options, ~~exercisable into 3,030,000 shares of common stock,~~warrants and convertible notes ~~convertible into 11,664,520 shares of common stock, and 4,500,000 shares of unvested restricted common stock~~payable have been excluded from calculation of weighted average shares because their impact on the loss per share is anti-dilutive.

As of March 31, 2021, 1,325,000 options were outstanding of which 975,814 were exercisable, and convertible debt and accrued interest totaling $1,499,879 was convertible into 97,064,539 shares of common stock. It should be noted that contractually the limitations on the third-party notes (and the related warrant) limit the number of shares converted to either 4.99% or 9.99% of the then outstanding shares. As of March 31, 2021, and2020 potentially dilutive securities consisted of the following:

	March 31, 2021		March 31, 2020
Stock options		1,325,000		3,290,000
Unvested restricted shares		2,625,000		5,125,000
Convertible notes payable		97,064,539		889,469
Total		101,014,539		9,304,469

108

Fair Value of Financial Instruments

The Company follows the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value measurements. Fair value is defined as the price that would be received to 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. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

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 carrying amount reported in the balance sheet for cash, accounts receivable, accounts payable and accrued liabilities, and notes payable, approximate their fair values because of the short-term nature of these financial ~~instruments~~instruments.

As of ~~June 30,~~March 31, 2021 and December 31, 2020, the ~~Company’s balance sheet includes~~Company did not have any Level 2 liabilities comprised of the fair value of embedded derivative ~~liabilities of $293 (see Note 8).~~liabilities.

Concentrations of risks

For the ~~six~~three months ended ~~June 30, 2020 and 2019,~~March 31, 2021, one customer accounted for ~~21% or more~~61% of revenue. ~~No other~~For the three months ended March 31, 2020, no customer accounted for 10% or more of revenue. As of ~~June 30,~~March 31, 2021 and March 31, 2020, one customer accounted for ~~18%~~100% and 35% of accounts ~~receivable, one accounted for 14% of accounts receivable, and another accounted for 11% of account~~ receivable. ~~No other customer accounted for 10% or more of accounts receivable. As of December 31, 2019, two customers accounted for 19% and 12% of accounts receivable, respectively.~~ No other customer accounted for 10% or more of accounts receivable.

As of ~~June 30, 2020, three~~March 31, 2021, two vendors accounted for ~~36%~~61% and ~~40% and 23%~~63% of accounts payable ~~respectively,~~ and no other vendor accounted for 10% or more of accounts payable. As of ~~June 30,~~December 31, 2020, ~~no vendor~~two vendors accounted for ~~10% or more~~63% of accounts payable.

The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits that are insured by the Federal Deposit Insurance Corporation, or FDIC. At times, deposits held may exceed the amount of insurance provided by the FDIC. The Company has not experienced any losses in its cash and believes it is not exposed to any significant credit risk.

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

In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion accounting models. As a result, the Company’s convertible debt instruments will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. The Company early adopted ASU No. 2020-06 effective January 1, 2021 using the modified retrospective approach. Upon adoption, the following changes resulted: (i) the intrinsic value of the beneficial conversion feature recorded in 2020 was reversed as of the effective date of adoption, thereby resulting in an increase in the convertible debentures with an offsetting adjustment to additional paid in capital and (ii) interest expense recorded in 2020 that was related to the amortization of the discount related to the beneficial conversion feature was reversed against opening accumulated deficit. Accordingly, the adoption of ASU 2020-06 resulted in a decrease to accumulated deficit of $2,054,759, a decrease in addition paid in capital of $2,557,812, and an increase in convertible notes payable of $503,053 on January 1, 2021.

In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments ~~(Topic 326)~~(“ASC 326”). ~~ASU 2016-13 requires~~The standard significantly changes how entities ~~to use a forward-looking~~will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on ~~current~~ expected ~~credit losses (“CECL”)~~rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to ~~estimate credit losses on certain types~~retained earnings as of ~~financial instruments, including trade receivables. This may result~~the beginning of the first reporting period in which the ~~earlier recognition of allowances for losses. ASU 2016-13~~guidance is effective. The standard is effective for ~~the Company~~interim and annual reporting periods beginning ~~January 1, 2023, and early adoption is permitted.~~after December 15, 2022. The Company ~~does not believe~~is currently assessing the ~~potential~~ impact of adopting this standard on the ~~new guidance~~Company’s financial statements and related ~~codification improvements will be material to its financial position, results of operations and cash flows.~~disclosures.

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 the Company’s present or future consolidated financial statements.

NOTE 2 ~~– LICENSE AGREEMENT~~

Effective January 22, 2019, the Company entered into an agreement with a wholesaler for the exclusive rights to distribute the Company’s products in the state of Colorado for three years. In consideration, the Company received an up-front payment of $100. The Company determined that the exclusive distribution agreement was a distinct agreement for the license of symbolic IP and thus should be recognized on a straight-line basis over the three-year life of the agreement. For the three and six months ended June 30, 2020 the Company recognized revenue related to this agreement in the amount of $11 and $17, respectively. For the three and six months ended June 30, 2019 the Company recognized revenue related to this agreement in the amount of $9 and $15, respectively.

~~NOTE 3~~ – INVENTORIES

Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, and net of reserves, consisted of the following:

	June 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020

Raw materials and packaging	$	122	$	103	$	22,170	$	3,144
Finished goods		39		20		21,839		16,076

	$	161	$	123	$	44,009	$	19,220

The Company has recorded a reserve for slow moving and potentially obsolete inventory. The reserve at March 31, 2021 and December 31, 2020 was $9,125 and $9,125, respectively.

NOTE 43 - EQUIPMENT

Equipment, stated at cost, less accumulated depreciation consisted of the following:

	June 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020

Machinery-technology equipment	$	705		$	607		$	704,772		$	704,772
Machinery-technology equipment under construction		12			30			48,949			35,969
		717			637			753,721			740,741
Less accumulated depreciation		(430	)		(324	)		(557,802	)		(540,218	)

	$	287		$	313		$	195,919		$	200,523

Depreciation expense for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020 was ~~$55~~$17,584 and ~~$106, respectively. Depreciation expense for the three and six months ended June 30, 2019 was $29 and $52,~~$54,989, respectively. As of ~~June 30, 2020,~~March 31, 2021, the equipment under construction is approximately ~~70%~~50% complete, and is expected to be completed and placed into service during the year ended December 31, ~~2020.~~2021.

NOTE 54 - OPERATING ~~LEASES~~LEASE

At ~~December~~March 31, ~~2019,~~2021, the Company ~~had~~has one operating lease for its headquarters office space in ~~Burbank, California that expires on July 31, 2023.~~

~~In February 2020, the Company took possession of a second leased facility consisting of office, research, and production space also located in Burbank, California.~~Burbank. The lease commenced on January 1, 2020, and has a term for 5 years, with annual fixed rental payments ranging from ~~$90~~$90,000 to ~~$101. The aggregate total fixed rent is approximately $478 and resulted in~~$101,296. At March 31, 2021, the ~~recognition~~balance of ~~an operating lease right-of-use (“ROU”)~~the lease’s right of use asset and of corresponding lease liability ~~of approximately $432 each. The Company also paid a security deposit of $16.~~were $341,844 and $376,114, respectively. At ~~June 30, 2020,~~March 31, 2021, the Company ~~did not have any other leases.~~

~~ROU assets~~is also obligated under a lease that was abandoned in December 2020. The total due to the lessor for the abandoned lease space is $235,759 and is recorded as lease ~~liabilities are recognized~~settlement obligation at commencement date based on the present value of lease payments over the lease term. 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.March 31, 2021.

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

	Six months ended June 30, 2020			Three months ended March 31, 2021
	(in thousands)
Lease Cost
Operating lease cost (included in selling, general, and administrative expense in the Company’s statement of operations)	$	99		$	44,274

Other Information
Cash paid for amounts included in the measurement of lease liabilities for 2020	$	69
Cash paid for amounts included in the measurement of lease liabilities for 2021				$	23,891
Weighted average remaining lease term – operating leases (in years)		3.5			2.75
Average discount rate – operating leases		4	%		4	%

	At March 31, 2021
Operating leases
Long-term right-of-use assets	$	341,844

Short-term operating lease liabilities	$	102,400
Long-term operating lease liabilities		273,714
Total operating lease liabilities	$	376,114

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

At June 30, 2020
Operating leases
Long-term right-of-use assets $ 680

Short-term operating lease liabilities $ 167
Long-term operating lease liabilities 525
Total operating lease liabilities $ 692

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

Year Ending Operating Leases
2020 $ 150
2021 186
2022 202
2023 172
2024 103
Total lease payments 813
Less: Imputed interest/present value discount (121 )
Present value of lease liabilities 692
Less current portion (167 )
Operating lease liabilities, long-term $ 525

Year Ending	Operating Leases
2021(remainder of year)		68,809
2022		95,481
2023		98,345
2024		118,266
Total lease payments		380,901
Less: Imputed interest		4,787
Present value of lease liabilities		376,114
Less current portion		(102,400	)
Operating lease liabilities, long-term	$	273,714

Lease ~~expenses~~expense were ~~$50~~$23,891 and ~~$99~~$26,897 during the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020, respectively. ~~Lease expenses were $28 and $61 during the three and six months ended June 30, 2019, respectively.~~

NOTE 65 – NOTES PAYABLE

June 30, 2020

December 31, 2019

Secured
(a) Notes payable secured by equipment $ 357 $ -
(b) Note payable secured by assets 50 56

Unsecured
(c) Note payable-Payroll Protection Loan 134 -
(d) Note payable- Economic Injury Disaster Loan 150 -
Total notes payable outstanding 691 56
Current portion 182 -
Long-term portion $ 509 $ 56

	March 31, 2021		December 31, 2020

(a) Notes payable secured by equipment (net of deferred finance charge of $67,767 and $74,817)	$	304,218	$	363,817
(b) Note payable, secured by assets-in default		13,350		33,350
(c) Note payable, Payroll Protection Loan		134,125		134,125
(d) Note payable, Economic Injury Disaster Loan		160,000		160,000
(e) Revenue sharing agreement		242,800		242,800
Total notes payable outstanding		854,492		934,092
Current portion		400,165		482,724

Long term portion	$	454,327	$	451,368

	(a)	In April 2020 and May 2020, the Company entered into two financing agreements aggregating ~~$395.~~$505,646. The notes ~~bear~~have a stated interest rate of 10.9%. The notes were issued at ~~10.9% per annum,~~a discount including fees for underwriting, legal and administrative costs along with deferred financing costs. The deferred financing costs are being amortized over the terms of the notes. The notes are secured by the Company’s equipment, ~~requires~~and require monthly payments of principal and interest of ~~$21,~~$21,000, and mature in April 2022 and May 2022. ~~During the six months ended June 30, 2020, the Company made principal payments of $38 and at June 30,~~At December 31, 2020, the balance due on these notes was ~~$357.~~$438,634. During the quarter ended March 31, 2021, the Company made payments of $66,649 and at March 31, 2021, the balance due on these notes was $371,985.

	(b)	Note payable, interest at 8.3% per annum, secured by all the assets of the Company. The note was due January 13, 2019 and on April 24, 2020, the note holder waived the default through December 31, ~~2020. At December 31, 2019, the balance of this Note was $56,~~2020, and it is currently in default. During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the company made principal payments of ~~$6,~~$20,000. The note is in default and ~~at June 30, 2020,~~ the ~~balance due on this~~Company is in discussion with the note ~~was $50.~~holder.

	(c)	On May 7, 2020, the Company was granted a loan (the “PPP loan”) from Bank of America in the aggregate amount of ~~$134,~~$134,125, pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act. The PPP loan agreement is dated May 4, 2020, matures on May 4, 2022, bears interest at a rate of 1% per annum, with the first six months of interest deferred, is payable monthly commencing on November 2020, and is unsecured and guaranteed by the U.S. Small Business Administration (“SBA”). The loan term may be extended to April 20, 2025, if mutually agreed to by the Company and lender. We applied ASC 470, Debt, to account for the PPP loan. The PPP loan may be prepaid at any time prior to maturity with no prepayment penalties. Funds from the PPP loan may only be used for qualifying expenses as described in the CARES Act, including qualifying payroll costs, qualifying group health care benefits, qualifying rent and debt obligations, and qualifying utilities. The Company intends to use the entire loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses. The Company intends to apply for forgiveness of the PPP loan with respect to these qualifying expenses, however, we cannot assure that such forgiveness of any portion of the PPP loan will occur. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. The terms of the PPP loan provide for customary events of default including, among other things, payment defaults, breach of representations and warranties, and insolvency events. The Company was in compliance with the terms of the PPP loan as ~~of June 30, 2020.~~March 31, 2021.

	(d)	On ~~June~~September 5, 2020, the Company received a ~~$150~~$160,000 loan (the “EID Loan”) from the SBA under the SBA’s Economic Injury Disaster Loan program. The EID Loan has a ~~thirty year~~thirty-year term and bears interest at a rate of 3.75% per annum. Monthly principal and interest payments of $0.7 per month are deferred for twelve months, and commence in June 2021. The EID Loan may be prepaid at any time prior to maturity with no prepayment penalties. The proceeds from the EID Loan must be used for working capital. The Loan contains customary events of default and other provisions customary for a loan of this type. The Company was in compliance with the terms of the EID loan as of ~~June 30, 2020.~~March 31, 2021.

	(e)	Between July 7, 2020, and July 29, 2020, the Company issued notes payable to third-party investors totaling $250,000. Under the terms of the note, the Company is to pay 50% of the net revenues beginning on August 21, 2020, for a product to be designed and produced by the Company. The product has not been produced and therefore no payments have been made. The Company has received a notice of default and demand for payment from three note holders (owed approximately $146,000). The Company has retained counsel who is in discussion with the note holders. See Note 13.

NOTE 76 – CONVERTIBLE NOTES PAYABLE

Convertible notes payable consisted of the following:

	June 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
Unsecured
(a) Convertible notes with adjustable conversion prices		183			282
(a) Convertible notes with fixed discount percentage conversion prices							$	30,000		$	180,200
Put premiums on stock settled debt								30,000			127,866

(b) Convertible notes with fixed conversion prices		453			-			1,363,752			936,944
Default penalty principal added								-			369,086
Total convertible notes principal outstanding		636			282			1,423,121			1,614,096
Debt discount		(479	)		(225	)		(29,369	)		(539,282	)
Convertible notes, net of discount	$	157		$	57

Convertible notes, net of discount and premium							$	1,393,752		$	1,074,814
Current portion		157			57			1,393,752			1,074,814
Long-term portion	$	-		$	-		$	-		$	-

1411

(a)

At December 31, ~~2019,~~2020, there ~~were $282 of~~was a $180,200 convertible notes with ~~adjustable~~fixed discount percentage conversion prices outstanding. During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the ~~Company issued one unsecured convertible promissory~~two note ~~for $153, bearing~~holders fully converted principal and accrued interest ~~at 22% per annum, and maturing~~into common stock. Upon conversion put premiums associated with these notes were reclassified to additional paid in February 2021. Also during the six months ended June 30, 2020, the Company also issued two unsecured convertible notes payable for $30, bearing interest at 10% per annum, and maturing on December 31, 2020, that were issued as loan commitment fees for notes payable.capital. At the option of the holder, the ~~noted~~two notes are convertible into shares of the Company’s common stock at a price per share discount of ~~39% to~~ 50% of the ~~average market~~lowest bid price of the Company’s common stock ~~as defined. As a result, the~~within twenty-five days prior to conversion. The Company determined that the conversion options of the convertible notes were not considered ~~indexed to the Company’s own~~derivatives and qualify as stock and characterized the fair value of the conversion features as derivative liabilities upon issuance. The Company determined that upon issuance of the convertible note, the initial fair value of the embedded conversion features totaled $462, of which $183 was recorded assettled debt discount offsetting the face amount of the convertible notes, and the remainder of $279 was recorded as private placement costs. During the six months ended June 30, 2020, one convertible note payable for $282 was paid off. At June 30, 2020, the balance of the convertible notes with adjustable conversion prices was $183.under ASC 480 – “Distinguishing Liabilities from Equity”.

(b)

AtAs of December 31, ~~2019, the Company had no convertible notes outstanding with fixed conversion prices. During the six months ended June 30,~~ 2020, the Company issued ~~six~~ convertible notes with fixed conversion prices aggregating ~~$453.~~$1,306,030 (including default penalties of $369,086). The notes are unsecured, bear interest at 10% per annum, and mature through ~~February 28,~~June 30, 2021. The notes are convertible into common stock at $0.015 per share. The Company recorded debt discounts of $43,000. Beneficial Conversion Features totaling $2,557,812 were recognized with charges to debt discount or other expenses with an offset credit to additional paid in capital. The adoption of ASU 2020-06 (see note 2) using the modified approach yielded a charge of $2,557,812 to additional paid in capital with credits to the remaining Beneficial Conversion Feature debt discounts and retained earnings. The remaining other debt discounts are amortized over the life of the notes or are amortized in full upon the conversion of the corresponding notes to common stock.

During the three months ended March 31, 2021, the Company issued two convertible notes with fixed conversion prices aggregating $193,000. The notes are unsecured, bear interest at 10% per annum, and mature through August 31, 2021. The notes are convertible into shares of the Company’s common stock at a fixed conversion price of ~~$0.05~~$0.015 per share. The Company recorded debt discounts and expenses of ~~$451~~$18,000 to account for loan fees ~~beneficial conversion features,~~ and original issue ~~discounts.~~discounts ($18,000). The debt discounts are amortized over the life of the notes or are amortized in full upon the conversion of the corresponding notes to common stock.

The Company early adopted ASU No. 2020-06 effective January 1, 2021 using the modified retrospective approach. Upon adoption, the following changes resulted: (i) the intrinsic value of the beneficial conversion features recorded in 2020 was reversed as of the effective date of adoption, thereby resulting in an increase in the convertible debentures with an offsetting adjustment to additional paid in capital and (ii) interest expense recorded in 2020 that was related to the amortization of the discount related to the beneficial conversion feature was reversed against opening accumulated deficit. Accordingly, the adoption of ASU 2020-06 resulted in a decrease to accumulated deficit of $2,054,759, a decrease in addition paid in capital of $2,557,812, and an increase in convertible notes payable of $503,053 on January 1, 2021.

At December 31, 2019, the balance of unamortized discount on convertible notes was $225. During the six months ended June 30, 2020, debt discount of $634 was recorded, and debt discount amortization of $380 was recorded. At June 30, 2020, the balance of the unamortized discount was $479.

Note 87 – DERIVATIVE LIABILITIES AND FINANCIAL INSTRUMENTS

~~At June 30,~~The Company had not derivative liabilities at March 31, 2021 or December 31, 2020. For the three months ended March 31, 2020, a roll-forward of the level 2 valuation financial instruments is as follows:

	Derivative Liabilities
Balance at December 31, 2019	$	400,139
Recognition of derivative liabilities upon initial valuation		415,000
Change in fair value of derivative liabilities during the three months ended March 31, 2020		(135,139	)

Balance at March 31, 2020	$	680,000

NOTE 8 – MEZZANINE EQUITY

The preferred shares below have been determined by the Company ~~had convertible notes outstanding~~to be conditionally redeemable upon the occurrence of certain events that are ~~convertible into shares of common stock~~not solely within the control of the ~~Company~~issuer, and upon such event, the shares would become redeemable at the option of the ~~holder~~holders, they are classified as ‘mezzanine equity’ (temporary equity). The purpose of this classification is to convey that such a security may not be permanently part of equity and could result in a demand for cash, securities or other assets of the entity in the future. The shares as valued have been classified as mezzanine equity and presented as such on the consolidated balance sheet and statement of shareholders deficit at ~~price~~March 31, 2021 as single line items due to the immaterial par value. The mezzanine equity value is not included in shareholders’ deficit.

Series B Convertible Preferred Stock

The terms of the Certificate of Designation of the Series C Convertible Preferred Stock, which was filed with the State of Nevada on January 12, 2021, state that such Series C Convertible shares have a par value of $0.00001 per share ~~discounts~~and a stated value of ~~39%~~$100 per share (the “Stated Value”) and each Series C Preferred Share shall be convertible into 6,750 shares of Common Stock (“Conversion Ratio”), at the option of a Holder, at any time and from time to ~~50%~~time, from and after the issuance of the ~~Company’s common stock market price, as defined in~~Series C Preferred Stock. Anti-dilution terms of the ~~note agreements. As the ultimate determination of shares to be issued upon conversion of these notes could exceed the current number of available authorized shares, the Company determined that~~preferred may change the conversion ~~features~~ratio. Each holder of the ~~convertible notes were not considered indexed~~Series C Preferred Stock shall have the right to vote on any matter that may from time to time be submitted to the Company’s ~~own stock~~shareholders for a vote, on an as converted basis, either by written consent or by proxy. Additionally, the shareholders are entitled to liquidation benefits including a cash payout, the liquidation terms include sales and characterized the fair value of the conversion features as derivative liabilities. Accordingly, the conversion features of the notes were separated from the host contracts (i.e. the notes) and characterized as derivative liabilities to be re-measured at the end of every reporting period with themergers affection a change in ~~value reported in the statement of operations.~~control.

AtOn December ~~31, 2019, the balance of the derivative liabilities was $400. During the six months ended June 30,~~21, 2020, the Company ~~recorded additions~~entered into a Securities Exchange Agreement with Medolife Rx, Inc., a Wyoming corporation, (“Medolife Rx”) pursuant to which, the Company agreed to acquire 51% of ~~$462 related~~Medolife Rx in exchange for 9,000 shares of newly created Series B Convertible Preferred Stock, which, were issued to Dr. Arthur Mikaelian upon closing on January 14, 2021. The shares issued to Dr. Mikaelian on January 14, 2021 were valued based on the conversion ~~features~~number of ~~notes issued~~common shares at the market price on the date of issuance. Due fact that there Medolife Rx, Inc. was a start-up venture with no net asset value the value associated with the shares of $1,522,198 was charged to compensation expense during the period (see Note 7), recorded a gain on extinguishment of $286 upon pay-off of a related convertible note payable, and a decrease in fair value of derivatives of $283. At June 30, 2020, the balance of the derivative liabilities was $293.three months ended March 31, 2021.

~~The derivative liabilities were valued at the following dates using a probability weighted Black-Scholes-Merton model with the following assumptions:~~

June 30, 2020

December 31, 2019

Conversion feature:
Risk-free interest rate 0.17 % 1.8 %
Expected volatility 264 % 222 %
Expected life (in years) 1 year 1 year
Expected dividend yield - -

Fair Value: - -
Conversion feature $ 293 $ 400

1512

Series C Convertible Preferred Stock

The ~~risk-free interest rate~~terms of the Certificate of Designation of the Series C Convertible Preferred Stock, which was ~~based~~filed with the State of Nevada on ~~rates established~~January 12, 2021, state that such Series C Convertible shares have a par value of $0.00001 per share and a stated value of $100 per share (the “Stated Value”) and each Series C Preferred Share shall be convertible into 6,750 shares of Common Stock (“Conversion Ratio”), at the option of a Holder, at any time and from time to time, from and after the issuance of the Series C Preferred Stock. Anti-dilution terms of the preferred may change the conversion ratio. Each holder of the Series C Preferred Stock shall have the right to vote on any matter that may from time to time be submitted to the Company’s shareholders for a vote, on an as converted basis, either by written consent or by proxy. Additionally, the ~~Federal Reserve Bank.~~ shareholders are entitled to liquidation benefits including a cash payout, the liquidation terms include sales and mergers affection a change in control.

On January 14, 2021, the Board of Directors of the Company approved the issuance of all 1,000 authorized shares of Series C Convertible Preferred Stock to the following Medolife Rx Designees:

Trillium Partners LP	500 Shares of Series C Preferred Stock

Sagittarii Holdings, Inc.	500 Shares of Series C Preferred Stock

The ~~expected volatility is~~shares issued to Trillium and Sagittarii were valued based on the ~~historical volatility~~conversion number of common shares at the ~~Company’s stock. The expected life of the conversion feature of the notes was based~~market price on the ~~remaining terms~~date of issuance. The shares were valued at $169,133 and were charged to expense for services during the related notes. The expected dividend yield was based on the fact that the Company has not customarily paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future.three months ended March 31, 2021.

NOTE 9 – STOCKHOLDERS’ ~~EQUITY~~DEFICIT

~~Series A Preferred Stock~~

On April 14, 2020, the Company filed a Certificate of Designation for the Company’s Series A Preferred Stock with the Secretary of State of Nevada designating 2,500,000 shares of its authorized preferred stock as Series A Preferred Stock, par value of $0.001 per share. The Series A Preferred Stock is not entitled to receive any dividends or liquidation preference and are not convertible into shares of the Company’s common stock. The holders of the Series A Preferred Stock, in the aggregate, have voting power equal to 51% of the total votes of all of the outstanding common and preferred stock of the Company entitled to vote. Accordingly, each share of Series A Preferred Stock shall have voting rights equal to one and one-tenth (1.1) times a fraction, the numerator of which is the shares of outstanding common stock and undesignated preferred stock of the Company and the denominator of which is number of shares of outstanding Series A Preferred Stock. With respect to all matters upon which stockholders are entitled to vote or give consent, the holders of the outstanding shares of Series A Preferred Stock shall vote with the holders of the common stock and any outstanding preferred stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Company’s Articles of Incorporation.

Common Stock

~~During the six months ended June 30,~~On November 20, 2020, the ~~Company issued 388,889~~Board of Directors approved an increase in the Company’s authorized shares of ~~common stock in a private placement~~Common Stock from 100,000,000 to 500,000,000 shares by Unanimous Written Consent. The Secretary of ~~shares at a price~~State of ~~$0.27 per~~Nevada approved the share ~~for total proceeds of $105.~~increase.

~~During the six months ended June 30, 2019, the~~The Company ~~received $625 for subscriptions to purchase 1,250,750~~has 500,000,000 shares of par value $0.001 common stock ~~in a private placement~~authorized and 99,897,748 and 46,756,970 shares were outstanding as of ~~shares at a price of $0.50 per share.~~

~~NOTE 10 – STOCK BASED COMPENSATION~~

~~Preferred stock~~

~~On April 14,~~March 31, 2021 and December 31, 2020, The Company issued 2,500,000 shares of a newly created class of preferred stock, Series A Preferred Stock to the Company’s Chief Executive Officer in a private placement transaction. The fair value of the Series A Preferred shares was determined to be $465 and was recorded as stock compensation in selling, general and administrative expense during the six months ended June 30, 2020. The Company determined the fair value of the Series A Preferred shares by obtaining an independent valuation of the fair value of the Company’s Series A Preferred shares.respectively.

Common stock issued for cash

During the ~~six months ended June 30, 2020,~~year Marcher 31, 2021, the Company issued ~~451,198~~32,475,000 shares of common stock mostly under the S1 then in effect at $0.04. In total $1,014,000 in cash was received.

Common stock issued for cash

During the three months ended March 31, 2021, the Company issued 32,475,000 shares of common stock for total proceeds of $1,014,000. The shares were primarily issued under a Form S-1 registration in effect at $0.04 per share.

Common stock issued for services

During the three months ended December 31, 2021, the Company issued 5,000,000 shares of common stock to service vendors with a fair value of $449,000, and 1,000,000 shares of common stock to employees and officers of the ~~Company.~~Company with a fair value of $69,950. The fair value of the shares was determined ~~to be $51~~ based on the closing price of the Company’s common stock on the ~~dates~~date shares were granted, and recorded as stock compensation in selling, general and administrative ~~expense during the six months ended June 30, 2020.~~expense.

During the six months ended June 30, 2020, the Company issued 1,250,117 shares of common stock to consultants and convertible note holders for services. The fair value of the shares was determined to be $187 based on the closing price of the Company’s common stock on the dates shares were granted, and recorded as stock compensation in selling, general and administrative expense during the six months ended June 30, 2020.

During the six months ended June 30, 2020, the Company issued 705,000 shares of common stock to convertible note holders for loan fees. The fair value of the shares was determined to be $89 based on the closing price of the Company’s common stock on the dates shares were granted, and was recorded as debt discount to be amortized over the term of the related convertible notes payable. During the six months ended June 30, 2020, amortization of $53 was recoded.

Restricted common stock

~~On May 20,~~In 2019, the Company agreed to issue 8,000,000 shares of the Company’s common stock with vesting terms to ~~a consultant for services.~~Arthur Mikaelian. 1,000,000 shares vested immediately, and the balance of 7,000,000 shares ~~will~~ vest 625,000 shares per quarter over 2.8 years. In the event the consultants service with the Company terminates, any or all of the shares of common stock held by such recipient that have not vested as of the date of termination are forfeited to the Company in accordance with such restricted grant agreement.

~~The total fair value of the 8,000,000 shares was determined to be $4,000 based on the price per shares of a contemporaneous private placement of the Company’s common stock on the date granted.~~ The Company accounts for the share awards using a graded vesting attribution method over the requisite service period, as if each tranche were a separate award. During the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, total share-based expense recognized related to vested restricted shares totaled ~~$762.~~$160,179 and $425,768, respectively. At ~~June 30, 2020,~~March 31, 2021, there was ~~$1,104~~$271,232 of unvested compensation related to these awards that will be amortized over a remaining vesting period of ~~1.7~~1.1 years.

The following table summarizes restricted common stock activity for the ~~six~~three months ended ~~June 30, 2020:~~March 31, 2021:

	Number of shares			Fair value of shares (in thousands)			Number of shares			Fair value of shares
Non-vested shares, December 31, 2019		5,750,000		$	1,682
Non-vested shares, December 31, 2020								3,250,000			431,411
Granted		-			-			-			-
Vested		(1,250,000	)		(426	)		(625,000	)		(160,179	)
Forfeited		-			-			-			-
Non-vested shares, June 30, 2020		4,500,000		$	1,103
Non-vested shares, March 31, 2021								2,625,000		$	271,232

As of ~~June 30, 2020,~~March 31, 2021, no shares have been issued and ~~3,500,000~~5,375,000 vested shares are included in shares to be issued on the accompanying financial statements

Common stock issued in conversion of convertible notes payable

The Company issued 14,665,778 shares of common stock to holders of convertible notes valued at $396,458, which includes reclassification of put premiums associated with stock settled debt of $97,866.

Stock Options

During the ~~year~~three months ended ~~December~~March 31, ~~2019,~~2021, the Company ~~issued options exercisable into 3,290,000 shares of common stock. The options initially had an exercise price of $0.23 per share, and this was amended in May 2020 to $0.10 per share.~~did not issue any options. The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of the ~~modified~~ option ~~grants immediately before and immediately after~~granted. That value is accreted over the ~~modification and determined the change in fair value related to the modification was de minimis.~~

In April 2020, the Company issued options exercisable into 300,000 shares of common stock which vested immediately. The options have an exercise price of $0.14 per share, and expire in ten years. Total fair value of these options at grant date was approximately $30, which was determined using the Black-Scholes-Merton option pricing model with the following average assumption: stock price $0.14 per share, expected term ranging from five years, volatility 236%, dividend rate of 0% and risk-free interest rate of 0.17%.vesting period.

During the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, the Company recognized ~~$182~~$70,994 and $80,404, respectively, of compensation expense relating to vested stock options. As of ~~June 30, 2020,~~March 31, 2021, the amount of unvested compensation related to stock options was approximately ~~$409~~$230,000 which will be recorded as an expense in future periods as the options vest.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future.

A summary of stock option activity during the three months ended ~~June 30, 2020:~~March 31, 2021:

Number of options Weighted Average
Exercise Price Contractual
Life in Years
Options Outstanding as of December 31, 2019 3,230,000 $ 0.10 6.0
Granted 300,000 0.14 10.0
Exercised - - -
Expired - - -
Options Outstanding as of June 30, 2020 3,530,000 0.11 6.5
Options Exercisable as of June 30, 2020 2,233,045 $ 0.10 5.5

	Number of options			Weighted Average Exercise Price		Contractual Life in Years
Options Outstanding as of December 31, 2020		4,130,000			0.10		6.0
Granted		-			0.11		10.0
Exercised		-			-		-
Forfeited		(2,805,000	)		-		-
Options Outstanding as of March 31, 2021		1,325000			0.11		6.5
Options Exercisable as of March 31, 2021		975,814		$	0.10		5.5

At ~~June 30, 2020,~~March 31, 2021, the options outstanding had no intrinsic value.

NOTE 10 – RELATED PARTY TRANSACTIONS

On January 14, 2021, the Company completed the acquisition of 51% of Medolife Rx, a company controlled by Arthur Mikaelian (see Note 8). Prior to the acquisition, Mr. Mikaelian was a consultant and shareholder in the Company. In connection with the acquisition of 51% of Medolife Rx, Mr. Mikaelian was appointed as a member of the Board of Directors of the Company, and also appointed to serve as the Company’s Chief Executive Officer, a role which Mr. Mikaelian assumed on January 14, 2021.

The Company has an ~~intrinsic value~~agreement with Mr. Mikaelian in consideration of ~~approximately $97.~~the Company’s exclusive use of patented technology developed by Mr. Mikaelian. Pursuant to the agreement, as amended, the Company shall pay a royalty of 25% of all the net income from the sale of licensed products, as defined with a minimum royalty of $35,000 per month payable in cash or common stock of the Company. During the three months ended March 31, 2021 and 2020, the Company recognized royalty expenses of $105,000 and $75,000, respectively.

During the three months ended March 31, 2021, the Company recorded revenue of $198,800, or 61% of total revenue for the period, from a company controlled by a family member of the Company’s CEO. At March 31, 2021, the net amount due from the related party was $149,100 and represents 100% of the Company’s accounts receivable at that date

NOTE 11 – COMMITMENTS AND CONTINGENCIES

~~The~~COVID-19

During the period ended March 31, 2021, the COVID-19 pandemic has impacted our operating results and the Company ~~has an agreement with an individual in consideration~~anticipates a continued impact for the balance of the Company’s exclusive use of patented technology developed by the individual. Pursuant to the agreement, as amended, the Company shall pay a royalty of 25% of all the net income from the sale of licensed products, as defined with a minimum royalty of $35 per month payable in cash or common stock of the Company.year. In addition, the pandemic may cause reduced demand for our products if, for example, the pandemic results in a recessionary economic environment which negatively effects the consumers who purchase our products. The Company ~~agreed~~monitors guidance from federal, state, and local public health authorities, and has implemented health and safety precautions and protocols in response to ~~issue 8,000,000 shares~~these guidelines. The extent of the impact of the COVID-19 pandemic has had and will continue to have on the Company’s ~~common stock~~business is highly uncertain and difficult to predict and quantify at this time.

Contingencies include obligations for lease agreements, including an abandoned lease space discussed at Note 5, along with ~~vesting terms to the individual (see Note 10). During the three and six months ended June 30, 2020,~~ the Company ~~paid $171~~current lease for its headquarters office, also discussed in Note 5.

It is management’s opinion that there are no material contingent liabilities that are not disclosed in the financial statements and ~~$212 to the individual.~~footnote disclosures as of March 31, 2021.

NOTE 12 – SUBSEQUENT EVENTS

~~In July 2020,~~Common Stock Issued

Between April 1, 2021 and May 21, 2021, the Company issued ~~500,000~~24,275,000 shares of common stock ~~with a fair value~~under Form S-1 offering (made effective on February 12, 2021). The Company received cash proceeds of ~~approximately $69 to a consultant for services.~~$971,000.

~~In July 2020,~~Between April 1, 2021 and May 21, 2021, the Company issued ~~five notes payable for aggregate proceeds of $250,000. In connection with these transactions, the Company issued 258,332~~6,610,507 shares of common stock ~~with~~(restricted) under privative placements at prices from $0.015 to $0.0256. The Company received cash proceeds of $161,408.

Between April 1, 2021 and May 21, 2021, the Company issued a total of 4,982,635 shares of its common stock to individuals as compensation for services, valued at the fair value of ~~$44 as loan fees.~~the shares of the Company’s stock on the dates issued, totaling $282,750.

~~In July~~Between April 1, 2021 and May 21, 2021, a total of 40,510,137 of common shares were issued to convertible note holders in exchange for principal of $589,415 and interest of $18,238 the notes held. The conversions partially liquidated the principal and accrued interest of various convertible notes issued during the year ended December 31, 2020, which were held by Trillium, Alpha, NY Farms and an individual investor from various convertible notes payable issued on April 27, 2020.

Between April 1, 2021 and May 21, 2021, the Company issued ~~72,522~~a total of 182,500 shares of its common stock ~~with a~~to employees as compensation, valued at the fair value of ~~$10 to two note payable holders for fees.~~the shares of the Company’s stock on the dates issued, totaling $13,888.

1814

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 variety 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.

Overview

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 we believe will one day 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 and wholly organic solutions as possible through 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 Burbank, California.

Quanta Basics

Quanta, Inc. (“Quanta”) is a cutting-edge technology platform whose patented, proprietary technology harnesses advances in quantum biology to increase the potency of active ingredients. Currently, Quanta supports product formulations in pain management, anti-inflammation, skincare, agriculture, nutritional supplements, and plant-based consumables. Ultimately, Quanta’s mission is to deliver better, more effective ingredients to elevate product efficacy, reduce waste and facilitate healthier, more sustainable consumption.

The established resonance theory behind Quanta’s polarization process has many potential applications. From potentiating bio-ingredients to produce more-effective carbon-trapping plants to transformative anti-aging solutions Quanta’s technology has the opportunity to upend how commercial products are made and the benefits from them. Already we see multi-trillion-dollar global industries benefiting from Quanta’s technology.

Our proof of concept, Quanta’s market-leading CBD pain-relief rub (“Muscle Rub”), is only the first in a series of paradigm shift products to emerge from our labs. At the heart of its well-documented effectiveness is our proprietary “polarization” process, which uses electromagnetic force to markedly enhance bioactivity at the molecular level—a polarized active ingredient is more soluble and creates stronger bonds with the body’s receptors. This allows us to enhance ingredients so they work faster and more powerfully without the use of chemical by-products or cellular penetration. Quanta believes this natural solution has nearly limitless applications in the world of plant-based consumer products.

Quanta is involved in ambitious projects that we believe will reshape the next wave of climate science, sustainability, nutrition, and more. Having harnessed the technology of the future, Quanta is dedicated to bringing tomorrow’s health and wellness solutions to the billions in need today.

Proof of Concept

Creating, producing and selling consumer products was never our primary focus; Quanta’s Muscle Rub was simply a means to an end - proof of concept and a revenue driver in a small emerging market as our business model took shape. Fundamentally, Quanta will be a licensing concern designed to collaborate with large brands to improve product quality and the profit margins of existing and new products. But the market needed proof and we chose to start in the under-developed category of CBD because of its speed to market.

Understandably, we met the same initial hurdles every start-up encounters. In addition to simply explaining quantum mechanics, we had no track record of success from a business standpoint. The immediate goal was to prove our model was defensible. Hence, we chose CBD as a launch category. This market provided protection from industry titans that may have felt threatened by such a powerful technology while allowing us to drive profits during R&D.

Over the last two years, we have developed and sold products largely to the medical industry, along with some consumer retail. This effort was designed to drive revenue and to prove the concept of our model: that polarizing a single ingredient can produce a demonstrably superior product that consumers find safe and effective (establish consumer appetite).

Discovery Synopsys

Using our product development process and business-to-business and direct-to-consumer sales approaches as a benchmark for future business, we developed the Quanta business model. Our technology’s unique ability to strengthen ingredients renders them more potent without added chemicals or penetrating cells means Quanta is in a first-of-its-kind position in the market. As the world’s first company focused on Quantum Biology we sit in a strong, but unique position in the market.

Our ability to increase ingredient efficacy by up to 500% means we are in a rare position to truly disrupt many areas of material science.

Quanta’s technology renders products superior to any on the market today. A 30% re-purchase rate (on one SKU alone) illustrates consumer appetite for the product.

Upcoming products and ventures will be designed to achieve or surpass this level of consumer benefit and uptake.

Quanta Business Model in 3 P’s: Potentiation, Partners, and Profits

After two years we believe the best possible model for the long-term success of the company is collaborating with best-in-class partners through joint ventures for new verticals, products, and research. These joint ventures may involve a jointly owned special purpose entity or they may be entirely based on contractual obligations.

Our mission has never been to create the best novel products on the planet. Our mission has always been to revolutionize the way formulations are developed and how products perform. We seek to work with the best product makers in the world to positively impact as many industries as possible.

The unique ability to increase the ingredient and product performance opens the doors for major opportunities. Higher performing ingredients mean less is needed to make a strong impact (increased margins, increase overall efficacy). We proved this with our Muscle Rub, which uses approximately 1/3 the CBD of competing products with demonstrably improved results.

The level of potentiation delivered by Quanta allows our partners the unique ability to provide higher-performing products, lower material costs, more competitive pricing and increased profit margins. In short, our partners will be able to make better performing, more affordable products with a higher repeat purchase. This is true disruption and consumer utopia.

We aim to work with groups that specialize in manufacturing, marketing, selling and distributing existing product lines that utilize ingredients we can potentiate. Partners like this facilitate efficient market delivery of joint innovations.

We believe this strategy provides greater shareholder value, enhances revenue potential, defrays upfront expenses and affords us the ability to raise capital for new projects without massive dilution.

Ultimately, these ventures would result in licensing out our technology to other reputable brands and companies to create co-branded products whereas the term “Powered by Quanta” becomes as recognized as “Intel Inside.”

We believe this type of partnership will afford a company Quanta partners with:

	●	Development of emerging products with cutting edge ingredients.

	●	A product line with a true point of differentiation.

	●	New SKUs with an increased margin.

	●	Decreased cost of goods sold.

Simultaneously these partnerships will allow Quanta:

	●	Greater brand recognition.

	●	Increased revenue and in turn profitability.

	●	Quicker timeline to more licensing opportunities because of a track record of success.

	●	Brand to become synonymous with improving the performance of ingredients within products.

Manufacturing Partnerships -

Quanta is currently focused on partnering with large-scale manufacturers and distributors able to produce products that meet the requirements of applicable regulations IE: Good Manufacturing Practices to fulfill orders of our own product line. This type of partnership is crucial because it will afford:

	●	New product development that meets certification requirements

	●	Much larger production scale

	●	Speed to market

	●	Increased distribution and profitability

With our licensing capabilities, Quanta technology can render better, more efficacious products that cost less to create but command a higher purchase value because of polarized ingredients. This, in turn, allows companies to diversify their catalog of products while simultaneously providing them with a distinguished advantage. More efficacious ingredients.

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Government Regulation

We believe we are in compliance with applicable federal, state and other regulations and that we have compliance programs in place to ensure compliance going forward. There are no regulatory notifications or actions pending.

Results of Operations

Summary of Key Results

Results of Operations for three months ended ~~June 30, 2020~~March 31, 2021 compared to the three months ended ~~June 30, 2019~~March 31, 2020

Revenue

Net sales are comprised of wholesale sales to our retail partners and sales through our ~~direct to consumer~~direct-to-consumer channel. Net sales in both channels reflect the impact of product returns as well as discounts for certain sales programs or promotions.

For the three months ended ~~June 30, 2020,~~March 31, 2021, the Company recognized ~~$318~~$318,807 in net sales. For the three months ended ~~June 30, 2019,~~March 31, 2020, the Company recognized ~~$318~~$350,349 in net sales.

Expenses

Operating expenses for the three months ended ~~June 30, 2020~~March 31, 2021 was ~~$2,313.~~$3,276,524. The Company incurred ~~$167~~$129,422 in compensation and benefit costs, $130,825 in research and development costs, and ~~$1,741~~$3,016,277 in administrative and other costs associated with operations, including legal and professional fees of ~~$337, and $405 of labor and related costs.~~$101,760.

Operating expenses for the three months ended ~~June 30, 2019~~March 31, 2020 was ~~$2,107.~~$1,372,187. The Company incurred ~~$82~~$382,071 in compensation and benefit costs, $77,876 in research and development costs, and ~~$1,719~~$912,240 in administrative and other costs associated with operations, including legal and professional ~~fees of $90, and $305 of labor and related costs.~~fees.

Other Income (Expense)

For the three months ended ~~June 30, 2020,~~March 31, 2021, the Company recognized ~~$200~~$(99,762) of net other ~~income.~~expenses.

For the three months ended ~~June 30, 2019,~~March 31, 2020, the Company recognized ~~$16~~$(315,498) of net other expenses.

Net Loss

Net loss for the three months ended ~~June 30, 2020~~March 31, 2021 was ~~$1,866.~~$2,948,486. Net loss for the three months ended ~~June 30, 2019~~March 31, 2021 was ~~$1,906.~~$1,359,246. We recorded no provision for federal income taxes for either period.

~~Results of Operations for six months ended June 30, 2020 compared to the six months ended June 30, 2019~~

~~Revenue~~

~~For the six months ended June 30, 2020, the Company recognized $675 in net sales. For the six months ended June 30, 2019, the Company recognized $538 in net sales.~~

~~Expenses~~

Operating expenses for the six months ended June 30, 2020 was $3,685. The Company incurred $245 in research and development costs, and $2,653 in administrative and other costs associated with operations, including legal and professional fees of $405, and $788 of labor and related costs.

Operating expenses for the six months ended June 30, 2019 was $2,461. The Company incurred $82 in research and development costs, and $1,882 in administrative and other costs associated with operations, including legal and professional fees of $111, and $504 of labor and related costs.

~~Other Income (Expense)~~

~~For the six months ended June 30, 2020, the Company recognized $116 of net other expenses.~~

~~For the six months ended June 30, 2019, the Company recognized $20 of net other expenses.~~

~~Net Loss~~

~~Net loss for the six months ended June 30, 2020 was $3,225. Net loss for the six months ended June 30, 2019 was $2,099. We recorded no provision for federal income taxes for either period.~~

Liquidity

We have yet to establish any history of profitable operations. For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Company incurred a net loss of ~~$3,255~~$2,948,486 and used cash in operating activities of ~~$1,344,~~$782,116, and at ~~June 30, 2020,~~March 31, 2021, the Company had a ~~stockholders’ deficit~~working capital deficiency of ~~$814.~~$1,892,759. These factors raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in ~~their~~its report on the Company’s December 31, ~~2019 audited~~2020 financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. ~~This~~The 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 ~~June 30, 2020,~~March 31, 2021, the Company had cash on hand in the amount of ~~$30.~~$313,525. Subsequent to ~~June 30, 2020~~March 31, 2021, the Company received ~~$250 from the issuance~~$1,231,000 for subscriptions to purchase shares of ~~five notes payable.~~common stock. Management estimates that the current funds on hand will be sufficient to continue operations through the next six 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 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 can obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. GAAP requires us to make estimates and assumptions that affect the reported amounts in our financial statements including various allowances and reserves for accounts receivable and inventories, the estimated lives of long-lived assets and trademarks and trademark licenses, as well as claims and contingencies arising out of litigation or other transactions that occur in the normal course of business. The following summarizes our most significant accounting and reporting policies and practices:

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date 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, assumptions made in valuing derivative liabilities, and the accrual of potential liabilities. Actual results may differ from these estimates.

Revenue Recognition

The Company recognizes revenue when risk of loss transfers to our customers and collection of the receivable is reasonably assured, typically upon delivery of products. The Company historically has offered no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against revenue.

The Company follows the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. 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 a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

Stock Compensation

The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and financing costs. The Company accounts for such grants issued and vesting based on ASC 718, whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered.

The fair value of the Company’s stock options is estimated using a Black-Scholes-Merton option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton option pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton option pricing model could materially affect compensation expense recorded in future periods.

~~Derivative Financial Instruments~~

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the June 30, 2020, reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

Recently Issued Accounting Pronouncements

See Note 1 to the Condensed Consolidated Financial Statements

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

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

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of ~~June 30, 2020~~March 31, 2021 that our disclosure controls and procedures were not effective.

We identified material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. The matters involving internal controls and procedures that our management considered to be material weaknesses ~~under the standards of the Public Company Accounting Oversight Board~~ were: (i) ~~We do~~we had an insufficient number of personnel appropriately qualified to perform control design, execution and monitoring activities; (ii) we did not have written documentation of our internal control policies and procedures, including written policies and procedures to ensure the correct application of accounting and financial reporting with respect to the current requirements of U.S. GAAP and SEC disclosure requirements; (iii) we had ineffective controls over our financial statement close and ~~(ii) the Company~~reporting process and did not provide reasonable assurance that accounts were complete and accurate and agreed to detailed support and that reconciliations of accounts were properly performed, reviewed and approved, (iv) we did not maintain effective ~~policies to ensure adequate~~controls over the recording and approval of recurring and non-recurring journal entries and (v) we had inadequate segregation of duties within its accounting processes. Specifically, due to the size of the Company and the smaller nature of department teams, opportunities are limited to segregate duties, resulting in inabilities to soundly manage segregation of job responsibilities.consistent with control objectives.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~June 30, 2020,~~March 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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.

The recent global coronavirus outbreak could harm our business and results of operations.

The global outbreak of COVID-19 has negatively affected the U.S. and global economies, and has negatively impacted businesses, workforces, customers, and created significant volatility of financial markets. It has also disrupted the normal operations of many businesses, including ours. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the duration and severity of the outbreak, the length of restrictions and business closures, and the impact on capital and financial markets, all of which are highly uncertain and cannot be predicted. This outbreak could decrease spending, adversely affect demand for our products and harm our business and results of operations. In the quarter ended ~~June~~September 30, 2020, we believe the COVID-19 pandemic did impact our operating results as shipments to customers in the second quarter were down 13% from the first quarter of the year. However, we have not observed any material impairments of our assets or a significant change in the fair value of our assets due to the COVID-19 pandemic. While it is not possible at this time to estimate the full impact that COVID-19 will have on our business, restrictions resulting from COVID-19 on general economic conditions could, among other things, impair our ability to raise capital when needed. This situation is changing rapidly, and additional impacts may arise that we are not aware of currently.

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

No unregistered sales of equity securities subsequent to ~~June 30, 2020.~~March 31, 2021, that are not disclosed in footnote 12 of the financial statements included in this filing.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Item 6. Exhibits.

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

Exhibit Number		Description

~~3.4~~		~~Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 3.4 to the Registrant’s Current Report on Form 8-K filed with the Commission on April 14, 2020)~~
~~10.13~~		Equity Purchase Agreement, dated as of April 9, 2020, by and between Quanta, Inc. and Oscaleta Partners LLC (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 filed with the Commission on April 10, 2020)
~~10.14~~		Registration Rights Agreement, dated as of April 9, 2020, by and between Quanta, Inc. and Oscaleta Partners LLC (incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement on Form S-1 filed with the Commission on April 10, 2020)
~~10.15~~		Promissory Note, dated as of April 9, 2020, issued by Quanta, Inc. in favor of Oscaleta Partners LLC (incorporated by reference to Exhibit 10.15 to the Registrant’s Registration Statement on Form S-1 filed with the Commission on April 10, 2020)
~~10.16~~		Brokerage Agreement, dated as of March 26, 2020, by and between Quanta, Inc. and Hanson Faso Sales & Marketing, Inc. (incorporated by reference to Exhibit 10.16 to the Registrant’s Current Report on Form 8-K filed with the Commission on April 10, 2020)
~~10.17~~		Form of Securities Purchase Agreement, dated as of April 27, 2020, by and between Quanta, Inc. and the Purchasers Signatory Thereto (incorporated by reference to Exhibit 10.17 to the Registrant’s Current Report on Form 8-K filed with the Commission on May 1, 2020)
~~10.18~~		Form of Note dated as of April 27, 2020, issued by Quanta, Inc. in favor of the Holders Thereof (incorporated by reference to Exhibit 10.18 to the Registrant’s Current Report on Form 8-K filed with the Commission on May 1, 2020)
31.1*		Rule 13a-14(a) Certification of the Chief Executive and Financial Officer
32.1*		Section 1350 Certification of Chief Executive and Financial Officer
101.SCH		XBRL Taxonomy Extension Schema Document

* Filed along with this document

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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, INC

Dated: ~~August 19, 2020~~May 25, 2021	By:	/s/ ~~Eric Rice~~Arthur Mikaelian
		~~Eric Rice~~Arthur Mikaelian
		Chairman, Chief Executive Officer (Principal Executive Officer and Principal Accounting Officer)

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	Three months ended June 30, 2020			Three months ended June 30, 2019			Six months ended June 30, 2020			Six months ended June 30, 2019
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Sales, net	$	307		$	309		$	658		$	533
Distributor license fees		11			9			17			15
Total revenue		318			318			675			548
Cost of goods sold		71			101			99			160
Gross profit		247			217			576			388

Operating expenses:
Compensation and benefits		405			306			787			493
Selling, general, and administrative		1,741			1,719			2,653			1,882
Research and development		167			82			245			82
Total operating expenses		2,313			2,107			3,685			2,457
Loss from operations		(2,066	)		(1,890	)		(3,109	)		(2,069	)

Other income (expense):
Change in fair value of derivative liability		148			-			283			-
Gain on extinguishment of derivative liability		286			-			286			-
Private placement costs		(17	)					(279	)
Interest expense		(217	)		(16	)		(406	)		(20	)
Other income (expense), net		200			(16	)		(116	)		(20	)

Net loss	$	(1,866	)	$	(1,906	)	$	(3,225	)	$	(2,089	)

Net loss per share, basic and diluted	$	(0.03	)	$	(0.05	)	$	(0.06	)	$	(0.05	)
Weighted average common shares outstanding – basic and diluted		58,728,752			39,223,665			57,512,526			39,211,943

	Three months ended June 30, 2020 (Unaudited)
	Series A Preferred stock, par value $0.001				Common stock, par value $0.001				Additional Paid-in		Shares to be			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		issued			deficit			Deficit
Balance, March 31, 2020		-	$	-		54,198,366	$	55	$	6,224	$	2,774		$	(9,597	)	$	(544	)
Issuance of shares						18,519		-		5		(5	)					-
Shares issued for cash		-		-		277,778		-		75		-			-			75
Fair value of vested options		-		-		-		-		102		-			-			102
Fair value of shares for services		-		-		1,250,117		1		186		336			-			523
Fair value of shares issued to employees and officer		-		-		451,198		-		51		-			-			51
Fair value of preferred shares issued to officer		2,500,000		2		-		-		463		-			-			465
Beneficial conversion feature of issued convertible notes		-		-				-		291		-			-			291
Fair value of shares issued for loan fees		-		-		705,000		1		77		11			-			89
Net loss		-		-		-		-		-		-			(1,866	)		(1,866	)
Balance, June 30, 2020 (Unaudited)		2,500,000	$	2		56,900,978	$	57	$	7,474	$	3,116		$	(11,463	)	$	(814	)

Three months ended June 30, 2019 (Unaudited)
	Common Stock, par value $0.001				Additional
	Number of shares		Amount		paid-in capital			Shares to be issued		Accumulated deficit			Total
Balance, March 31, 2019		39,200,090	$	39	$	2,360		$	479	$	(2,633	)	$	245
Shares to be issued		-		-		-			452		-			452
Fair value of shares for services		32,505		1		16			1,372		-			1,389
Fair value of shares issued for cashless exercise of warrants		2,590,910		2		(2	)		-		-			-
Net loss		-		-					-		(1,906	)		(1,906	)
Balance, June 30, 2019 (Unaudited)		41,823,505	$	42	$	2,374		$	2,303	$	(4,539	)	$	180

	At June 30, 2020
Operating leases
Long-term right-of-use assets	$	680

Short-term operating lease liabilities	$	167
Long-term operating lease liabilities		525
Total operating lease liabilities	$	692

Year Ending	Operating Leases
2020	$	150
2021		186
2022		202
2023		172
2024		103
Total lease payments		813
Less: Imputed interest/present value discount		(121	)
Present value of lease liabilities		692
Less current portion		(167	)
Operating lease liabilities, long-term	$	525

	June 30, 2020		December 31, 2019
Secured
(a) Notes payable secured by equipment	$	357	$	-
(b) Note payable secured by assets		50		56

Unsecured
(c) Note payable-Payroll Protection Loan		134		-
(d) Note payable- Economic Injury Disaster Loan		150		-
Total notes payable outstanding		691		56
Current portion		182		-
Long-term portion	$	509	$	56

	June 30, 2020			December 31, 2019
Conversion feature:
Risk-free interest rate		0.17	%		1.8	%
Expected volatility		264	%		222	%
Expected life (in years)	1 year			1 year
Expected dividend yield		-			-

Fair Value:		-			-
Conversion feature	$	293		$	400