Form 10-Q QUANTA INC For: Mar 31

QUANTA,
INC. AND SUBSIDIARY

See
notes to condensed consolidated financial statements

QUANTA,
INC. AND SUBSIDIARY

(Unaudited)

See
notes to condensed consolidated financial statements

QUANTA,
INC. AND SUBSIDIARY

(Unaudited)

  Three months ended March 31, 2021 (Unaudited)

QUANTA,
INC. AND SUBSIDIARY

(Unaudited)

See
notes to condensed consolidated financial statements

QUANTA,
INC. AND SUBSIDIARY

THREE
MONTHS ENDED MARCH 31, 2021 AND 2020 (UNAUDITED)

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 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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 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 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 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 for the year ended December 31, 2020
and notes thereto contained in the Annual Report on Form 10-K of the Company as filed with the SEC on April 15, 2021.

The
consolidated financial statements include the accounts of Quanta Inc, and its 51{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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 quarter
ended March 31, 2021, the Company incurred a net loss of $2,948,486 and used cash in operating activities of $782,116, and at March 31,
2021, the Company had a stockholders’ deficit of $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 its report on the Company’s December 31, 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
March 31, 2021, the Company had cash on hand in the amount of $313,525. Subsequent to March 31, 2021, the Company received $1,231,000
for subscriptions to purchase 73,895,644 shares of 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

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, 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—Substantially all of the Company’s revenue is derived from product sales. Product revenue and costs of sales are
recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. The Company’s
performance obligations are satisfied at that time. The Company does not have any significant contracts with customers requiring performance
beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or 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.

Convertible
Notes with Fixed Rate Conversion Options

The
Company 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 the 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 fixed monetary amount by measuring and recording a premium, as applicable, on the Note
date with a charge to interest expense in accordance with ASC 480 – “Distinguishing Liabilities from Equity”.

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. The Company accounts for 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 the estimated
fair value of the award, and is recognized as expense over the requisite service period. Recognition of compensation expense for non-employees
is in the same period and manner as if the Company had paid cash for the services.

The
fair value of the Company’s stock options is estimated using the 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.

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 quarters ended March 31, 2021 and March 31, 2020, advertising costs totaled $57,959 and $33,682,
respectively.

Research
and Development Costs

Costs
incurred for research and development are expensed as incurred. During the quarters ended March 31, 2021 and March 31, 2020, research
and development costs totaled $130,825 and $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 during the period. Shares used in the calculation of basic net loss per common share include vested but unissued shares underlying
awards of restricted common stock. Diluted loss per share reflects the potential dilution, using the treasury stock method that could
occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance
of common stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that
outstanding warrants and convertible notes are exercised and the proceeds are used to purchase common stock at the average market price
during the period. Warrants and convertible notes may have a dilutive effect under the treasury stock method only when the average market
price of the common stock during the period exceeds the exercise price of the options and warrants.

For
the three months ended March 31, 2021 and 2020, the dilutive impact of common stock equivalents, e.g. stock options, warrants and convertible
notes 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or 9.99{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the then outstanding shares. As of March
31, 2021, and2020 potentially dilutive securities consisted of the following:

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.

As
of March 31, 2021 and December 31, 2020, the Company did not have any Level 2 liabilities comprised of the fair value of embedded derivative
liabilities.

Concentrations
of risks

For
the three months ended March 31, 2021, one customer accounted for 61{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of revenue. For the three months ended March 31, 2020, no customer
accounted for 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more of revenue. As of March 31, 2021 and March 31, 2020, one customer accounted for 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and 35{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of accounts receivable.
No other customer accounted for 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more of accounts receivable.

As
of March 31, 2021, two vendors accounted for 61{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and 63{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of accounts payable and no other vendor accounted for 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more of accounts
payable. As of December 31, 2020, two vendors accounted for 63{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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, 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 (“ASC 326”).
The standard significantly changes how entities 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 expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect
adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is
effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of
adopting this standard on the Company’s financial statements and related 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 – 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:

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
3 – EQUIPMENT

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

Depreciation
expense for the three months ended March 31, 2021 and 2020 was $17,584 and $54,989, respectively. As of March 31, 2021, the equipment
under construction is approximately 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} complete, and is expected to be completed and placed into service during the year ended December
31, 2021.

NOTE
4 – OPERATING LEASE

At
March 31, 2021, the Company has one operating lease for its headquarters office space in Burbank. The lease commenced on January 1, 2020,
and has a term for 5 years, with annual fixed rental payments ranging from $90,000 to $101,296. At March 31, 2021, the balance of the
lease’s right of use asset and corresponding lease liability were $341,844 and $376,114, respectively. At March 31, 2021, the Company
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 settlement obligation at March 31, 2021.

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

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

Lease
expense were $23,891 and $26,897 during the three months ended March 31, 2021 and 2020, respectively.

NOTE
5 – NOTES PAYABLE

NOTE
6 – CONVERTIBLE NOTES PAYABLE

Convertible
notes payable consisted of the following:

Note
7 – DERIVATIVE LIABILITIES AND FINANCIAL INSTRUMENTS

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:

NOTE
8 – MEZZANINE EQUITY

The
preferred shares below have been determined by the Company to be conditionally redeemable upon the occurrence of certain events that
are not solely within the control of the issuer, and upon such event, the shares would become redeemable at the option of the 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 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 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 shareholders are entitled to liquidation benefits including a cash payout, the
liquidation terms include sales and mergers affection a change in control.

On
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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of 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 number of 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 three months ended March 31, 2021.

Series
C 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 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 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:

The
shares issued to Trillium and Sagittarii were valued based on the conversion number of common shares at the market price on the date
of issuance. The shares were valued at $169,133 and were charged to expense for services during the three months ended March 31, 2021.

NOTE
9 – STOCKHOLDERS’ DEFICIT

Common
Stock

On
November 20, 2020, the Board of Directors approved an increase in the Company’s authorized shares of Common Stock from 100,000,000
to 500,000,000 shares by Unanimous Written Consent. The Secretary of State of Nevada approved the share increase.

The
Company has 500,000,000 shares of par value $0.001 common stock authorized and 99,897,748 and 46,756,970 shares were outstanding as
of March 31, 2021 and December 31, 2020, respectively.

Common
stock issued for cash

During
the year Marcher 31, 2021, the Company issued 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 with a fair value of $69,950. The fair value
of the shares was determined based on the closing price of the Company’s common stock on the date shares were granted, and recorded
as stock compensation in selling, general and administrative expense.

Restricted
common stock

In
2019, the Company agreed to issue 8,000,000 shares of the Company’s common stock with vesting terms to Arthur Mikaelian. 1,000,000
shares vested immediately, and the balance of 7,000,000 shares vest 625,000 shares per quarter over 2.8 years. 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 three months ended March 31, 2021 and 2020, total share-based expense recognized related to vested restricted shares totaled
$160,179 and $425,768, respectively. At March 31, 2021, there was $271,232 of unvested compensation related to these awards that will
be amortized over a remaining vesting period of 1.1 years.

The
following table summarizes restricted common stock activity for the three months ended March 31, 2021:

As
of March 31, 2021, no shares have been issued and 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 three months ended March 31, 2021, the Company did not issue any options. The Company used the Black-Scholes-Merton option pricing
model to estimate the fair value of the option granted. That value is accreted over the vesting period.

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

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

At
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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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 agreement with Mr. Mikaelian in consideration of 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the Company’s accounts receivable at that date

NOTE
11 – COMMITMENTS AND CONTINGENCIES

COVID-19

During
the period ended March 31, 2021, the COVID-19 pandemic has impacted our operating results and the Company anticipates a continued impact
for the balance of the 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 monitors guidance
from federal, state, and local public health authorities, and has implemented health and safety precautions and protocols in response
to these guidelines. The extent of the impact of the COVID-19 pandemic has had and will continue to have on the Company’s 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 the Company 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
footnote disclosures as of March 31, 2021.

NOTE
12 – SUBSEQUENT EVENTS

Common
Stock Issued

Between
April 1, 2021 and May 21, 2021, the Company issued 24,275,000 shares of common stock under Form S-1 offering (made effective
on February 12, 2021). The Company received cash proceeds of $971,000.

Between
April 1, 2021 and May 21, 2021, the Company issued 6,610,507 shares of common stock (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 the shares of the Company’s stock on the dates issued, totaling $282,750.

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 a total of 182,500 shares of its common stock to employees as compensation, valued
at the fair value of the shares of the Company’s stock on the dates issued, totaling $13,888.

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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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:

Simultaneously
these partnerships will allow Quanta:

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:

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.

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 March 31, 2021 compared to the three months ended March 31, 2020

Revenue

Net
sales are comprised of wholesale sales to our retail partners and sales through our 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 March 31, 2021, the Company recognized $318,807 in net sales. For the three months ended March 31, 2020, the Company
recognized $350,349 in net sales.

Expenses

Operating
expenses for the three months ended March 31, 2021 was $3,276,524. The Company incurred $129,422 in compensation and benefit costs, $130,825
in research and development costs, and $3,016,277 in administrative and other costs associated with operations, including legal and professional
fees of $101,760.

Operating
expenses for the three months ended March 31, 2020 was $1,372,187. The Company incurred $382,071 in compensation and benefit costs, $77,876
in research and development costs, and $912,240 in administrative and other costs associated with operations, including legal and professional
fees.

Other
Income (Expense)

For
the three months ended March 31, 2021, the Company recognized $(99,762) of net other expenses.

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

Net
Loss

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

Liquidity

We
have yet to establish any history of profitable operations. For the three months ended March 31, 2021, the Company incurred a net loss
of $2,948,486 and used cash in operating activities of $782,116, and at March 31, 2021, the Company had a working capital deficiency
of $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 its report on
the Company’s December 31, 2020 financial statements, raised substantial doubt about the Company’s ability to continue as
a going concern. 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
March 31, 2021, the Company had cash on hand in the amount of $313,525. Subsequent to March 31, 2021, the Company received $1,231,000
for subscriptions to purchase shares of 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.

Recently
Issued Accounting Pronouncements

See
Note 1 to the Condensed Consolidated Financial Statements

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

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 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 were: (i) 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 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
controls over the recording and approval of recurring and non-recurring journal entries and (v) we had inadequate segregation of duties
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 March 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

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.

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 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{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 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.

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

None.

Not
applicable.

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

*
Filed along with this document

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.

Exhibit 31.1

Rule 13a-14(a) Certification
of the Chief Executive Officer and Chief Accounting Officer

I, Arthur Mikaelian, certify that:

a) Designed such disclosure controls and
procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly
during the period in which this report is being prepared;

b) Designed such internal control over
financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s
disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and
procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change
in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and

a) All significant deficiencies and material
weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material,
that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Executive Officer and Chief
Accounting Officer of Quanta, Inc. (the “Company”), certifies that, to his knowledge: