QUANTA INC - Quarter Report: 2018 July (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended July 31, 2018
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TRANSITION REPORT PURSUANT TO SEC TION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________________to ____________________
Commission File Number: 333-216960
Quanta, Inc.
(Exact name of registrant as specified in its charter)
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Nevada
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81-2749032
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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3606 W. Magnolia Blvd., Burbank, CA
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91505
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (424) 261-2568
Indicate by check mark whether the registrant (1) has filed all reports required by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes ☒ No ☐ (Does not currently apply to the
Registrant)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 if the Exchange Act.
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☒
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(Do not check if a smaller reporting company)
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Emerging growth company ☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use
the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.
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Class
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Outstanding December 21, 2018
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Common Stock, $0.001 par value per share
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39,200,090 shares
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Page
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PART I
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3 |
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ITEM 1.
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3 |
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ITEM 2.
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16 |
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ITEM 3.
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17 |
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ITEM 4.
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17 |
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PART II
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18 |
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ITEM 1.
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18 | |
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ITEM 1A.
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18 | |
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ITEM 2.
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18 | |
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ITEM 3.
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ITEM 4.
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18 | |
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ITEM 5.
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18 | |
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ITEM 6.
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18 | |
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PART I – FINANCIAL INFORMATION
QUANTA, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS FREIGHT SOLUTION, INC.)
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As of
July 31, 2018
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As of
April 30, 2018
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|||||||
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(unaudited)
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(audited)
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|||||||
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ASSETS
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CURRENT ASSETS:
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Cash
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$
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211,693
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$
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6,314
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Prepaid expense
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54
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54
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||||||
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Total Current Assets
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211,747
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6,368
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||||||
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FIXED ASSETS:
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||||||||
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Machine, net of accumulated depreciation of $37,233
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310,267
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-
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||||||
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Deposit - Construction in progress
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175,000
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-
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Total Fixed Assets
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485,267
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-
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OTHER ASSETS:
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Intangible assets, net of accumulated amortization of $4,000
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-
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-
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Security deposit
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16,770
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-
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TOTAL ASSETS
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$
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713,784
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$
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6,368
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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CURRENT LIABILITIES:
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Accounts payable and accrued expense
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$
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7,454
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$
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262,000
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Loans
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110,000
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24,738
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||||||
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TOTAL LIABILITIES
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117,454
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286,738
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STOCKHOLDERS’ EQUITY (DEFICIT):
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Preferred stock, $0.001 par value; 25,000,000 shares authorized; none issued or outstanding
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-
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-
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Common stock, $0.001 par value; 100,000,000 shares authorized; 38,900,090 and 21,500,000 shares issued and
outstanding as of July 31, 2018 and April 30, 2018, respectively
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38,900
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21,500
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Additional paid in capital
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3,179,702
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29,339
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Accumulated deficit
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(2,622,272
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)
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(331,209
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)
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TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
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596,330
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(280,370
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)
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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$
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713,784
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$
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6,368
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See notes to consolidated financial statements.
QUANTA, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS FREIGHT SOLUTION, INC.)
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For the three months
ended July 31, 2018
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For the three months
ended July 31, 2017
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(unaudited)
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(unaudited)
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INCOME:
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Sales
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$
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38,244
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$
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1,504
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Cost of Goods Sold
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50,033
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-
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GROSS PROFIT/(LOSS)
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(11,789
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)
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1,504
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EXPENSES:
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Contractor expense
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146,967
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19,900
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Selling, general, and administrative
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137,382
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35,712
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Research and development
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93,381
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26,242
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Total Expenses
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377,730
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81,854
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NET OPERATING LOSS
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(389,519
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)
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(80,350
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)
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Other Income and Expense:
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Gain on sale of intangible asset
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15,000
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-
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Loss on derivative liability
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(485,385
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)
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-
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Interest expense
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-
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(810
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)
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Interest Income
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27
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-
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Total Other Income and Expense
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(470,358
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)
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(810
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)
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NET LOSS
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$
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(859,877
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)
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$
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(81,160
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)
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Basic and diluted loss per share
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$
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(0.03
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)
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$
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(0.01
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)
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Weighted average common shares outstanding – basic and diluted
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31,913,572
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10,000,000
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See notes to consolidated financial statements.
QUANTA, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS FREIGHT SOLUTION, INC.)
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For the three months ended
July 31, 2018
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For the three months ended
July 31, 2017
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(unaudited)
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(unaudited)
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CASH FLOW FROM OPERATING ACTIVITIES:
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Net loss from continuing operations
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$
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(859,877
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)
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$
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(81,160
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)
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Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
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Depreciation & Amortization
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12,411
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-
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Common stock issued for services
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12,127
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Effect of changes in operating assets and liabilities:
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Accounts Payable
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(22,454
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)
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-
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Change in Derivative Liability
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485,385
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Payments for security deposit
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(16,770
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)
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-
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Sales Tax Payable
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4,105
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-
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Total Adjustments to reconcile Net Income to Net Cash provided by operations:
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474,804
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-
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Net cash provided by (used in) operating activities
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(385,073
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)
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(81,160
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)
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CASH FLOW FROM INVESTING ACTIVITIES
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Purchase of machine
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(175,000
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)
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-
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Net cash provided used in investing activities
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(175,000
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)
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-
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CASH FLOW FROM FINANCING ACTIVITIES:
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Proceeds from loans
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1,200
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30,000
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Proceeds from private placement offering – common stock
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747,518
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7,000
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Net cash provided by financing activities
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748,718
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37,000
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CHANGE IN CASH
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188,645
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(44,160
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)
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CASH AT BEGINNING OF PERIOD
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23,048
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107,753
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CASH AT END OF PERIOD
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$
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211,693
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$
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63,593
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| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Cash Paid for Taxes | $ |
- | $ | - | ||||
| Cash Paid for Interest | $ | - | $ | - | ||||
| Non-Cash Financing and Investing Items: | ||||||||
| Related party negotiated non-related party loans forgiveness | $ | 18,538 | $ | - |
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| Related party negotiated accounts payable forgiveness | $ |
247,000 | $ | - |
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| Change in accounts payable due to gain on sale of intangible asset | $ | 15,000 | $ | - | ||||
| Notes payable converted into common stock along with derivative liability | $ | 1,563,511 | $ | - | ||||
See notes to consolidated financial statements
QUANTA, INC. AND SUBSIDIARY
JULY 31, 2018 (UNAUDITED)
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
History
On April 28, 2016 we incorporated under the laws of the State of Nevada, as Freight Solution, Inc. On June 5, 2018 the Company experienced a change in
control. In connection with the change in control the Company acquired Bioanomaly, Inc. through wholly-owned subsidiary. On July 11, 2018 we changed our name from Freight Solution, Inc. to Quanta, Inc. (Quanta, Inc. and hereinafter referred to
as “Quanta”, the “Company”, “we” or “us”).
Following the merger, Freight Solution, Inc. adopted the business plan and operations of Bioanomaly, Inc. Bioanomaly, Inc.’s officers and directors
became the officers and directors of Freight Solution, Inc. Bioanomaly, Inc, was incorporated under the laws of the state of California on December 27, 2016.
Quanta is an applied science business focused on increasing energy levels of plant matter increasing performance within the human body.
Change in Control
On June 5, 2018, the Company experienced a change in control (the “Change in Control”). With the Change in Control certain liabilities of the Company were forgiven
and/or paid for on behalf of the Company by our founder, a former officer and former director of the Company. Total liabilities at the time approximated $265,538 which
included professional fees owed to a software development firm and other consultants. The board of directors nominated Mr. Eric Rice to the board of directors on June 5, 2018. Mr. Rice became our Chief Executive Officer on June 5, 2018.
New Business
On June 6, 2018, Bioanomaly, Inc. executed an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), with us, as Freight Solution,
Inc. a publicly traded Nevada corporation, and our wholly-owned subsidiary Quanta Acquisition Corp., a California corporation. Pursuant to the terms of the merger agreement, Quanta Acquisition merged with and into Bioanomaly, Inc. in a
statutory reverse triangular merger (the “Merger”) with Bioanomaly, Inc. surviving as a wholly-owned subsidiary. Following the merger we adopted the business plan and operations of Bioanomaly, Inc. Bioanomaly, Inc.’s officers and directors
became our officers and directors.
As consideration for the Merger, we issued the shareholders of Bioanomaly, Inc. an aggregate of 25,900,000 shares (the “Share Exchange”) of our common
stock, par value $0.001 per share. Bioanomaly, Inc.’s existing shareholders along with Bioanomaly, Inc.’s convertible note holders received the requisite number of shares in the share exchange which reflected their ownership percentage prior to
the issuance of any additional shares. Bioanomaly, Inc.’s three founders received 21,908,810 shares in the Share Exchange, the convertible note holders received 3,771,040 shares in the Share Exchange and one other individual received 220,150
shares in the Share Exchange as payment for services related to the Bioanomaly, Inc.’s Joint Venture.
Simultaneously with the Merger, we accepted subscriptions for 6,500,090 shares of our common stock in a private placement. The common stock was sold at
a price of $0.20 per share for aggregate offering proceeds of $1,300,000. No fees were paid in association with this offering. In connection with the offering we issued warrants to purchase 3,000,000 shares of our common stock at an exercise
price of $0.30 per share with an expiry of four years.
On July 11, 2018 the State of Nevada approved the name change from Freight Solution, Inc. to Quanta, Inc. completing the terms of the Merger Agreement.
As a result of the Merger, Bioanomaly, Inc. became a wholly-owned subsidiary of Quanta, Inc. The Merger is treated as a “tax free exchange” under Section 368 of the Internal Revenue
Code of 1986, as amended. As a result of the Merger, Bioanomaly, Inc., the surviving entity, became a wholly-owned subsidiary of Quanta, Inc. For accounting purposes, the
Merger was treated as a “reverse acquisition” with Bioanomaly, Inc. as the accounting acquirer.
In connection with the Merger, 15,000,000 shares of our common stock were returned to treasury for no cost. Bioanomaly, Inc. shareholders own
approximately sixty-three percent (63%) of our issued and outstanding common stock. At the time of the Merger, the Company’s board of directors and officers was reconstituted by the resignation of our founder, Mr. Shane Ludington as Chairman,
Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer with the appointment of Mr. Eric Rice as Chairman, Chief Executive Officer, Chief Financial Officer and Mr. Jeffrey Doiron as President and Chief Operations Officer of
the combined companies. On June 6, 2018, the Company approved an amendment to its Articles of Incorporation to change its name to Quanta, Inc. The Secretary of State-Nevada approved the name change in August 2018.
Year end
The Company’s year-end is April 30th. Our wholly-owned subsidiary Bioanomaly, Inc.’s year-end is December 31st.
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim financial statements (July 31, 2018 (unaudited)) and basis of presentation
The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of results for a full fiscal year. These financial
statements should be read along with the financial statements of the Company for the period ended April 30th (audited) and notes thereto.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported
amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company
and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with an original
maturity of three months or less to be cash equivalents. At July 31, 2018 and April 30, 2018, cash equivalents totaled $211,692 and $6,314, respectively. There is no amount that is uninsured by the FDIC (Federal Deposit Insurance Corporation).
Accounts Receivable
We record accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and is charged to other
income (expense) in the combined statements of operations. The Company calculates this allowance based on the history of write-offs, the level of past-due accounts based on the contractual terms of the receivables, and the relationships with, and the economic status of, the customers. Allowance for estimated, uncollectible accounts was determined to be unnecessary.
Property and Equipment
Property and equipment are recorded at cost. Expenditures
for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation
are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for
financial statement purposes.
Net Loss per Share
Net loss per common share is computed by dividing net loss by
the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260 - “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by
the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share
equivalents outstanding. For the three month periods ended July 31, 2018 and July 31, 2017, net loss per share is $(0.03) and $(0.01) respectively.
Revenue Recognition
Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that
an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of
revenue that is recorded reflects the consideration the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the
contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable
consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company applies the five-step model to contracts when it is probable that we will collect the consideration it is entitled to in exchange for the
goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, the Company at contract inception reviews the contract to determine which performance obligations the Company must deliver and
which of these performance obligations are distinct. The Company recognizes revenues as the amount of the transaction price is allocated to each respective performance obligation when the performance obligation is satisfied or as it is to be
satisfied. Generally, the Company’s performance obligations are transferred to the customer at a point in time, typically upon delivery.
Advertising costs
Advertising costs are anticipated to be expensed as incurred. During the three month periods ended July 31, 2018 and April 30, 2018, advertising costs
totaled $11,586 and $0, respectively.
Fair Value of Financial Instruments
The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as
certain related FASB staff positions. This guidance defines fair value as the price would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When
determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions marketplace
participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
| ∙ |
Level 1 - quoted market prices in active markets for identical assets or liabilities.
|
| ∙ |
Level 2 - inputs other than Level 1 are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted
prices for identical or similar assets or liabilities in markets are not active, or other inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
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| ∙ |
Level 3 - unobservable inputs are supported by little or no market activity and are significant to the fair value of the assets or liabilities.
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The carrying amount of the Company’s financial instruments approximate fair value as of
July 31, 2018 and April 30, 2018 due to the short-term nature of these instruments.
Recently Issued Accounting Pronouncements
Company’s management evaluated recent accounting pronouncements through July 31, 2018 and believe none of them would have a material effect on the
Company’s financial statements except for the following.
With the acquisition of the new business we are subject to ASC Topic 606, Revenue from Contracts with Customers. The revenue standard requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time based on when
control of goods and services transfers to a customer. As a result of the adoption of the standard, we will record changes in the timing of revenue recognition and in the classification between revenues and costs. The new standard does not
currently impact the cash or the economics of underlying customer contracts we may acquire with the New Business (see Note 1 – Organization).
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 our present or future
financial statements.
Income Taxes
Income taxes are computed using the asset and liability method of accounting. Under the asset and liability method, a deferred tax asset or liability
is recognized for estimated future tax effects attributable to temporary differences and carry-forwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to
the extent, based on available evidence; it is more likely than not such benefits will be realized. The Company’s deferred tax assets were fully reserved for as of July 31, 2018 and April 30, 2018.
The Company accounts for income taxes applying FASB ASC 740, which requires the recognition of deferred tax liabilities and assets for expected future
tax consequences of events have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
NOTE 3 – RELATED PARTY TRANSACTIONS
Related party transactions for the three month periods ended July 31, 2018 and July 31, 2017 were as follows:
In connection with the Change in Control (see Note 1 – Organization) transaction included our founder who negotiated and guaranteed the forgiveness of
certain debts of the Company. The Company recognized related party debt forgiveness of approximately $265,538 from nonrelated party notes payable and accounts payable negotiated and guaranteed by our founder. This transaction was recognized as
an increase in additionally paid in capital from the debt relief. This transaction occurred on or about June 5, 2018. Our founder, a former officer and former director guaranteed the forgiveness of these debts and received no compensation from
it.
During the three month period ended July 31, 2018, the Company paid shareholders of its wholly owned subsidiary’s, Mr. Eric Rice, Mr. Michael Oirech,
and Mr. Blake Gillette $3,500, $5,090 and $15,782, respectively, for their services.
During the three month period ended July 31, 2017, the Company paid its wholly owned subsidiary’s three founders, Mr. Eric Rice, Mr. Todd Hickman, and
Mr. Blake Gillette who are shareholders $0, $1,500 and $13,800, respectively, for their services.
In connection with the Merger Agreement, Mr. Rice’s original shares increased by 9,743,571 shares of common stock, Mr. Hickman’s original shares
increased by 962,953 shares of common stock, and Mr. Gillette’s original shares increased by 1,202,284 shares of common stock. The resulting share increase was caused by a forward share split associated with the share exchange. The number of shares did not increase or decrease the parties percentage of ownership prior to or in connection
with the merger or share exchange.
During the three month period ended July 31, 2017, the Company received a loan in the amount of $20,000 from Mr. Hickman and repaid that amount by July
31, 2017.
No other related party transactions occurred for the three month periods ended July 31, 2018 and July 31, 2017.
NOTE 4 – SHARE CAPITAL
The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 25,000,000 shares of its $0.001 par value preferred stock.
Preferred stock
No shares of blank check preferred stock have been issued.
Common stock
On April 28, 2016, the Company issued to its founder, 11,000,000 shares of its $0.001 par value common stock at a price of $0.001 per share. These
services were valued at $11,000. On April 29, 2016, the Company issued to its founder 4,000,000 shares of its $0.001 par value common stock at a price of $0.001 per share. In acquiring certain intangible assets we recorded their value at
$4,000.
On August 23, 2017 the Company completed a public offering of its equity registered on Form S-1. The Company issued 7,000,000 shares of its common
stock to 34 investors. The investors paid $0.01 per share for a combined investment of $70,000. On March 15, 2018 and on March 22, 2018, respectively, 100,000 shares and 400,000 shares of the Company’s common stock were returned to treasury by
certain shareholders for no consideration.
On June 6, 2018, the Company executed the Merger Agreement (see Note 1 – Organization). In connection with the Merger Agreement 15,000,000 shares of
common stock acquired in the Change in Control transaction were returned to treasury and cancelled. In connection with the Merger Agreement the shareholders of Bioanomaly, received 25,900,000 shares of our common stock. In connection with the
Change in Control, the Company received subscriptions for 6,500,090 shares of its common stock in a private placement offering. The investors paid a purchase price of $0.20 per share for an aggregate offering proceeds of $1,300,000.
As of July 31, 2018, there were 38,900,090 shares of our common stock issued and outstanding.
Deferred offering costs
Deferred offering costs consisted of accounting fees, legal fees and other fees incurred related to our direct public offering. Upon completion of the
public offering in 2017, we netted deferred offering costs of $34,161 against the net offering proceeds of $70,000 received in that offering. No deferred offering costs were incurred in connection with the June 6, 2018 private placement of our
common stock or the aforementioned warrants.
NOTE 5 – CONVERTIBLE DEBENTURES
As of July 31, 2018, all convertible notes had been
converted. As of December 31, 2017, the Company issued $785,000 in convertible notes of which were held by four non-related parties. The convertible notes were due and payable two years after their issue date. The convertible notes bear interest at 5% per annum payable. Interest payments are
deferred until maturity. The convertible noteholders hold an option to convert principal, plus accrued and unpaid interest, into common stock of the Company at a price equal to eighty percent (80%) of the average of the common stock issued
for the Company’s next round of financing that may occur through the issuance of equity (the “Next Equity Financing”) and subsequent to the maturity date.
At the time of conversion, there was $1,015,000 in convertible notes. These notes were converted in sequence with the merger. Total shares issuable for all convertible notes was approximately 3,771,000 shares.
The following table summarizes convertible notes payable as of July 31, 2018 and December
31, 2017:
|
July 31, 2018
|
Bioanomaly, Inc.
as of
December 31, 2017
|
|||||||
|
Convertible note payable - 1 holder, principal and interest due and payable 24 months from
investment, monthly payments of interest - 5.0% per annum. Convertible into common stock, 20% discount to price target along with valuation cap set at $11 million (total market capitalization)
|
$
|
-
|
$
|
40,000
|
||||
|
Convertible note payable - 1 holder, principal and interest due and payable 24 months from
investment, monthly payments of interest - 5.0% per annum. Convertible into common stock, 20% discount to price target along with valuation cap set at $8 million (total market capitalization)
|
-
|
350,000
|
||||||
|
Convertible note payable - 1 holder, principal and interest due and payable 24 months from
investment, monthly payments of interest - 5.0% per annum. Convertible into common stock, 20% discount to price target along with valuation cap set at $3 million (total market capitalization)
|
-
|
45,000
|
||||||
|
Convertible note payable - 1 holder, principal and interest due and payable 24 months from
investment, monthly payments of interest - 5.0% per annum. Convertible into common stock, 20% discount to price target along with valuation cap set at $6 million (total market capitalization)
|
-
|
350,000
|
||||||
|
Total convertible notes payable
|
-
|
785,000
|
||||||
|
Less current maturities
|
-
|
(785,000
|
)
|
|||||
|
Long term portion of convertible notes payable
|
$
|
-
|
$
|
-
|
||||
Subsequent to December 31, 2017 entered into several other convertible notes. The terms were similar to the convertible notes entered into during 2017.
Valuation caps ranged from $3 million to $11 million. Total additional convertible notes in the amount of $230,000 were received by the Company.
The Company analyzed its conversion option for derivative
accounting under ASC 815-15 Derivatives and Hedging and determined the beneficial conversion feature afforded the convertible notes should be recorded as a discount to debt. The convertible notes conversion feature was not effective
immediately and would have been only afforded to the holder upon maturity. With no expressed limit to the number of shares to be ultimately delivered upon settlement this may necessitate the Company recognizing a discount equal to the entire
debt instrument if it were not for the fact the Company conducted a Next Equity Financing transaction after period end whereby new shares of the Company were issued and the holders of the convertible notes received shares at a 20% discount to
the Next Equity Financing pricing.
The convertible notes and its conversion features was
measured against fair value at the end of each reporting period with the Company recording the change in fair value to earnings through its Statement of Operations.
The Company accounts for fair value of its conversion features in
accordance with ASC 815-15, Derivatives and Hedging; Embedded Derivatives. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of its
results of operations. The Company valued the embedded derivatives using the Black-Scholes pricing model. Fair value of the conversion feature
was $485,385 for the period ended June 6th, 2018. As of June 6th, the
notes were converted and recorded into paid in capital.
Expected volatility was based on the historical volatility of
several publicly traded companies common stock. Historical volatility was computed using daily pricing observations for comparable periods of time. The Company believed this method produced an estimate that was representative of the Company’s
expectations of future volatility over the expected term. The Company had no reason to believe future volatility over the expected remaining life of these common stock equivalents was likely to differ materially from historical volatility.
Expected life was based on one year due to the expiry of maturity. The risk-free rate was based on the U.S. Treasury rate corresponded to the expected term of the common stock equivalents.
NOTE 6 – JOINT VENTURES
In March 2017, the Company through its wholly owned
subsidiary entered into a joint venture and exclusive license agreement (the “Joint Venture”) for the development, design, and manufacture of certain technology for commercialization. The Joint Venture obligates the Company to a contribution
of $350,000 in order to pay for the cost of the technology machine. The Joint Venture provides for the exclusive use of a certain patent developed by Dr. Arthur Grant Mikaelian (the “Patent Holder”). The patent has an expiry of 2037. Profits
from the Joint Venture are allocated 50/50 between the Company and the Patent Holder. Payments are required to be paid monthly to the Patent Holder. No amounts were due to the Joint Venture as of July 31, 2018. Both parties to the Joint
Venture are compliant with the contractual terms for each period reported.
On September 12, 2018, the Company through its wholly owned
subsidiary entered into a joint venture with a Canadian corporation to expand the Quanta brand, technology and product lines in Canada (the “Canadian Joint Venture”). The Canadian Joint Venture requires us to contribute $302,755 to
its operations (see Note 16 – Subsequent Events).
NOTE 7 – COMMITMENTS AND CONTINGENCIES
There are no future minimum commitments or contingencies as of July 31, 2018 except for the following:
On June 6th, 2018, the Company entered into a noncancelable operating lease on its headquarters requiring payments of $8,385 per month, with
lease payments increase of 5% each year, ending on July 31, 2023. Future minimal rental payments under this noncancelable operating lease as of July 31 is:
|
July 31, 2019
|
$
|
103,555
|
||
|
2020
|
108,732
|
|||
|
2021
|
114,169
|
|||
|
2022
|
119,878
|
|||
|
2023
|
125,871
|
|||
|
Total
|
$
|
572,205
|
The Company has financial commitments of $302,755 for equipment purchases under its Joint Venture and its Canadian Joint Venture to the Patent Holder
over the next twelve months.
The Company has not assessed its entire financial obligation or contingent liability for income tax withholding from the misclassification of
independent contractors that be employees under the laws of the state of California. The California Supreme Court decision on April 30, 2018, held there is a presumption that all
workers are employees, and a business classifying a worker as an independent contractor bears the burden of establishing such a classification is proper under a new test called the “ABC test.” This test or compliance thereof, by the
Company could be held liable for penalties, interest, tax withholdings which we believe to be immaterial.
NOTE 8 –PROPERTY AND EQUIPMENT
During the year December 31, 2017, the Company pursuant to
the Joint Venture purchased certain technological equipment for $347,500. The equipment is being depreciated on the straight line method over 7 years. Depreciation for this equipment has been determined to be 7 years.
During the three months ended July 31, 2018. The Company paid
a deposit with the Patent Holder for another piece of equipment under the Joint Venture. As of July 31, 2018, the equipment is 50% complete, and under the terms of the Joint Venture has incurred costs of $175,000 and remitted an
additional amount to the Patent Holder.
Depreciation expense for the three-month periods ended July 31, 2018 and July 31, 2017 is $12,411 and $0, respectively.
|
As of July 31, 2018
|
As of April 30, 2018
|
|||||||
|
Furniture and equipment
|
$
|
-
|
$
|
-
|
||||
|
Machinery – Technology Equipment CIP
|
175,000
|
-
|
||||||
|
Machinery – Technology Equipment
|
347,500
|
-
|
||||||
|
Total property and equipment
|
522,500 |
-
|
||||||
|
Less accumulated depreciation
|
(37,233
|
)
|
-
|
|||||
|
$
|
485,267
|
$
|
-
|
|||||
NOTE 9 – INCOME TAXES
A reconciliation of statutory tax rates to effective tax rates were as follows in each of the periods presented:
|
For the three
month period
ended July 31,
2018
|
For the three
month period
ended July 31,
2017
|
|||||||
|
Federal income taxes at statutory rate
|
21.0
|
%
|
35.0
|
%
|
||||
|
State income taxes at statutory rate
|
8.84
|
%
|
8.84
|
%
|
||||
|
Valuation allowance
|
(29.84
|
%)
|
(43.84
|
%)
|
||||
|
Effective tax rate
|
0.0
|
%
|
0.0
|
%
|
||||
As of July 31, 2018, the Company had a net operating loss for tax purposes of $409,538.
The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits within income tax expense. For the
periods ended July 31, 2018 the Company did not recognize any interest or penalties in its statement of operations, nor did it have any interest or penalties accrued in its balance sheets at July 31, 2018 relating to unrecognized tax benefits.
Under the provisions of ASC 740, Accounting for Uncertainty in
Income Taxes, the Company identified no significant uncertain tax positions in 2018. The Company files income tax returns in U.S. jurisdiction. There are no federal or state income tax examinations underway for these, and tax returns
for the current year are still open to examination.
NOTE 10 - NOTE PAYABLE
Prior to the Change in Control we executed several promissory notes with nonrelated parties in the aggregate of $75,071 of which $24,738 was
outstanding at the end of April 30, 2018. The unsecured promissory notes bear interest at 0% per annum and are due and payable upon demand. The Company in connection with the public offering repaid approximately $59,800 of these two nonrelated
parties. In connection with the Change in Control our founder negotiated and guaranteed the forgiveness of certain debts of the Company. The Company recognized debt forgiveness of $18,538 from the remaining nonrelated party note payable.
During the three month period ended July 31, 2018, the Company entered into a new promissory note with a nonrelated party for a total of $25,000. The
$25,000 note payable and interest of $841 was paid in full prior to July 2018.
Short-term notes payable at July 31, 2018 and April 30, 2018 was $110,000 and $0, respectively.
NOTE 11 – CONCENTRATION OF SALES AND SEGMENTED DISCLOSURE
For the three month periods ended July 31, 2018 and July 31, 2017, there were no concentration of sales with respect to the Company’s revenues. Revenue
for all customers during these three periods was in the form of product sales and services. No single customer made up more than 10% or more of total revenues.
The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii)
determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange
for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must
deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price is allocated to the respective performance obligation when the performance obligation is satisfied or as
it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.
NOTE 12 – DEBT FORGIVENESS AND GAIN ON SALE OF ASSETS
With the Change in Control transaction our founder, negotiated and guaranteed the settlement of certain accounts payable of the Company resulting in
forgiveness of debt; the Company recognized related party debt forgiveness of approximately $265,538 which was credited to additional paid in capital. Furthermore, in connection with the Change in Control transaction our founder, negotiated the
sale of certain intangible assets with a net value of $0 to be paid through the settlement of accounts payable of $15,000. We recognized a gain on sale of assets of $15,000.
NOTE 13 – WARRANTS
In June 2018, 3,000,000 warrant shares were issued in connection with the sale of private placement
offering. The fair value of the warrants were calculated based on the Black-Scholes model. See Note 5. The warrants are through private placement as the timing of the issuance of the warrants, as there was not a true public market of the three months ended July 31, 2018. The value would be accounted for to and from paid in capital, and therefore there is no financial statement impact as of July 31, 2018. The warrants will expire in 4
years as of the issuance date. The warrants have not been exercised.
For the Black Scholes model calculation, we calculated a
volatility rate averaging 74.8% based on other companies that with similar operations and size. Historical volatility was computed using daily pricing observations for recent periods. The Company believed this method produced an estimate
that was representative of the Company’s expectations of future volatility over the expected term. The risk-free rate was based on the U.S. Treasury rate that corresponded to the expected term of the common stock equivalents. As of July 31,
2018, the fair value of these warrants was $3,333,621.
The following table summarizes the assumptions used to estimate the fair value of warrants granted during the three months ended July 31, 2018:
|
|
As of July 31, 2018 |
|||
|
|
||||
|
Expected dividend yield |
0 |
% |
||
|
Weighted-average expected volatility |
74.8 |
% |
||
|
Weighted-average risk-free interest rate |
2.77-2.85 |
% |
||
|
Expected life of warrants |
4 years |
|||
The Company’s outstanding and exercisable warrants as of July 31, 2018 and December 31, 2017 are presented below:
|
|
||||||||||||||||
|
|
Number
Outstanding
|
Weighted
Average
Exercise Price
|
Contractual
Life in
Years
|
Fair
Value
|
||||||||||||
|
|
||||||||||||||||
|
Warrants Outstanding and Exercisable as of December 31, 2017
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||
|
|
||||||||||||||||
|
Warrants granted (June 2018)
|
3,000,000
|
$
|
0.30
|
4.00
|
$
|
1,748,920
|
||||||||||
|
|
||||||||||||||||
|
Warrants Forfeited
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||
|
|
||||||||||||||||
|
Warrants Exercised
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||
|
|
||||||||||||||||
|
Warrants Outstanding and Exercisable as of July 31, 2018
|
3,000,000
|
$
|
0.30
|
4.00
|
$
|
3,333,621
|
||||||||||
NOTE 14 – INTANGIBLE ASSETS
Intangible assets with finite lives are amortized over their estimated useful life. The Company monitors conditions related to these assets to
determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in
circumstances indicate the carrying amount may not be recoverable. The original estimate of an asset’s useful life and the impact of an event or circumstance on either an asset’s useful life or carrying value involve significant judgment.
On April 29, 2016 the Company acquired certain intangible assets from its founder which consisted of a business plan, along with costs related to
development of internal-use software to be used in its operations. The total value attributable to the intangible assets purchased by the Company was $4,000. On June 6th, 2018, the Company recognized $15,000 from the sale of
intangible assets (see Note 12 – Debt Forgiveness and Gain on Sale of Assets)
Intangible assets includes the following:
|
July 31, 2018
|
April 30, 2018
|
|||||||
|
Intangible assets consisting of certain development costs and purchased software
|
$
|
-
|
$
|
4,000
|
||||
|
Less: Accumulated amortization
|
-
|
(4,000
|
)
|
|||||
|
Net property and equipment
|
$
|
-
|
$
|
-
|
||||
NOTE 15 – SUBSCRIPTION RECEIVABLE
During the three months ended July 31, 2018, the Company issued a net total of 6,500,000 shares of common stock for $0.20 per share in the private placement offering
conducted in connection with the Merger. The total of $50,000 of that private placement offering had not been received as of July 31, 2018 and this amount is presented on the balance sheet as common stock subscription receivable, a
contra-equity account. In addition, $13,000 of the escrow account was not remitted by the escrow agent as of July 31, 2018. The Company collected the $63,000 subsequent to July 31, 2018.
NOTE 16 – BUSINESS COMBINATION
The Merger Agreement will be accounted for as a reverse acquisition in accordance with the Financial Accounting Standards Board (ASC 805, Business
Combinations). Quanta management has evaluated the guidance contained in ASC 805 with respect to the identification of the acquirer in the Merger Agreement and concluded, based on a consideration of the pertinent facts and circumstances,
Bioanomaly will have acquired Freight Solution, for financial accounting purposes. Accordingly, the Merger Agreement has been accounted for in the unaudited pro forma combined financial statements as a continuation of the financial statements
of Quanta together with an exchange of shares of Freight Solution, and certain former shareholders of Freight Solution continue in their ownership of Freight Solution along and a re-capitalization of the equity of Freight Solution
|
(1)
|
Certain assets and liabilities of Freight Solution, Inc. were assumed by Quanta as part of the merger for the period ending July 31, 3018 such as
cash and cash equivalents in the amount of $86; prepaid expense in the amount of $54, and; intangible assets, net in the amount of $0 (note intangible assets were sold for settlement of accounts payable of $15,000, recognizing
a gain on sale of $15,000.
|
|
(2)
|
Our founder, a former officer and former director, in connection with the change in control of the Company guaranteed and negotiated the settlement of
certain outstanding debts resulting in forgiveness of that debt; total debt forgiveness was approximately $265,538; recognized gain on the sale of intangible assets of $15,000 in a reduction accounts payable through a sale of the
intangible asset; and $28 in bank service charges and fees.
|
|
(3)
|
Elimination of common stock of $25,900 offset against paid in capital, and elimination of accumulated deficit of Freight Solution, Inc. of ($337,569).
|
|
(4)
|
The Company recognized paid in capital through the issuance of common stock through the merger of $15,900 recorded at par value to Bioanomaly along with
par value officer services provided for common stock of $12,129, and derivative liabilities associated with our convertible notes payable of $3,771. The Company recognized paid in capital through the issuance of common stock
through the merger of $6,500 recorded at par value Freight Solution, the cancelation of ($21,500) recognized paid in capital through the cancelation of common stock through the merger, and $6,500 recognized paid in capital
recorded at par value Freight Solution after the merger on July 13, 2018. The total eliminated for the consolidation was recorded at $25,900 and recognized through paid in capital.
|
|
(5)
|
The Company recognized the legal fees and other costs associated with the merger of $51,760 accounted for as merger expenses in our Statement of
Operations as well as contribution into paid in capital of $51,760.
|
|
(6)
|
At the time of the merger, subscription escrow proceeds from the private placement were still receivable from the escrow agent of $63,000. These were
recorded as contra equity, and eliminated on the pro forma. These escrow proceeds were received in August 2018.
|
|
(7)
|
Total cost to acquire the control shares of the Company by Bioanomaly, Inc. was $444,000 ($419,000 payment for shares, and $25,000 for a finder’s
fee) recorded as part of the gain/(loss) on merger.
|
NOTE 17 – SUBSEQUENT EVENTS
The Company evaluated all events that occurred after the balance sheet date of July 31, 2018 through the date the financial statements were issued. The
only significant events occurred during this period were:
On September 12, 2018, the Company entered into a
joint venture with a Canadian corporation to expand the Quanta brand, technology and product lines into the Canadian markets. The Canadian Joint Venture requires the Company to
contribute $302,755 to its operations.
On November 6th, 2018 the Company issued 300,000 shares to a
vendor for services performed. Those services were valued at $90,000 or $0.30 per share.
POST-EXCHANGE BENEFICIAL OWNERSHIP OF THE COMPANY’S COMMON STOCK
The following table provides information, immediately prior to and after the Merger, regarding beneficial ownership of our Common Stock by: (i) each
person known to us who beneficially owns more than five percent of our Common Stock; (ii) each of our directors; (iii) each of our executive officers; and (iv) all of our directors and executive officers as a group.
The number of shares beneficially owned is determined under rules promulgated by the SEC, and the information is not necessarily indicative of
beneficial ownership for any other purpose. The shares in the tables does not, however, constitute an admission the named stockholder is a direct or indirect beneficial owner of those shares.
|
Name and Address of Beneficial Owner(A)
|
Amount
and
Nature of
Beneficial
Ownership
Before the
Share
Exchange
|
Percentage
(D)
|
Amount
and Nature
of
Beneficial
Ownership
After the
Share
Exchange
|
Percentage
(E)
|
||||||||||||
|
Eric Rice (B)
|
8,181,818
|
81.82
|
%
|
17,925,390
|
46.08
|
%
|
||||||||||
|
Jeffery Doiron (President)
|
-
|
-
|
-
|
-
|
||||||||||||
|
Directors and executive officers as a group (2 Persons)
|
8,181,818
|
81.82
|
%
|
17,925,390
|
46.08
|
%
|
||||||||||
|
Blake Gillette (C)
|
1,009,576
|
10.10
|
%
|
2,211,860
|
5.68
|
%
|
||||||||||
(A) Unless otherwise noted above, the address of the persons and entities listed in the table is Quanta, Inc., 3606 W Magnolia Blvd, Burbank, California 91505.
(B) Our Chief Executive Officer and Chairman, owned 8,181,818 shares of common stock prior to the Exchange. Mr. Rice and the other shareholders of
Bioanomaly recieved a forward exchange of their respective ownership in Bioanomaly, prior to their ownership in Quanta, Inc. through the Share Exchange. Mr. Rice may be deemed to be a control person of the shares owned by such entity. Mr. Rice
received 2.19 shares for every share he owned in Bioanomaly. Mr. Rice claimed beneficial ownership of these shares as of this date.
(C) Executive Vice President. As part of the Exchange which occurred on June 6, 2018 Mr. Blake Gillette received 2,211,860 shares of the Company. Mr.
Gillette received 2.19 shares for every share he owned in Bioanomaly.
(D) These percentages are based on the 25,900,000 shares of common stock to be exchanged in the Share Exchange by Bioanomaly in connection with the
Merger with Quanta, Inc. These numbers are based on Bioanomaly, Inc. as a stand alone entity.
(E) These percentages are based on the 38,900,090 shares of common stock issued and outstanding of Quanta, Inc. as of December 6, 2018.
MANAGEMENT
|
Position
|
||||
|
Eric Rice
|
41
|
Founder, Chairman and Chief Executive Officer
|
||
|
Jeffery Doiron
|
45
|
President and Chief Operations Officer
|
Chairman and Chief Executive Officer. Prior to founding
Quanta in 2016, Mr. Rice founded several successful technology companies and was a pioneer in the digital media sector. He has built companies in several verticals including financial services, digital media, artificial intelligence,
biotechnology, live gaming and cannabis. Mr. Rice leads Quanta’s operations and overall strategic direction. He holds a Bachelor of Arts Degree in SCS from Indiana University. Mr. Rice’s status as the founder along with his extensive
experience in marketing led to the conclusion that he is qualified to serve in these capacities.
Jeffrey Doiron 45, President. Before taking over operations
for Quanta, Mr. Doiron founded and grew one of the continent’s most innovative advanced digital agencies. He uses his vast experience to connect new and exciting ideas with the right partners and brands. He guides the team to unlock their
most creative selves and drive forward momentum for the company. The Company concluded Mr. Doiron’s past experiences and training render him qualified to serve in these capacities.
DESCRIPTION OF SECURITIES
General
The Company’s authorized capital stock consists of 100,000,000 shares of common stock, par value $0.001 per share and 25,000,000 shares of preferred
stock, par value $0.001 per share. After the closing of the Merger, and assuming the issuance of the Exchange Shares, the shares of common stock sold in the private placement offering and the retirement of 15,000,000 shares of common stock,
the Company had approximately 38,900,090 shares of common stock issued and outstanding as of July 31, 2018.
Common Stock
Stockholders shall not be entitled as of right to subscribe for, purchase, or otherwise acquire any shares of any class of the Company which the
Company proposes to issue or any rights or options which the Company proposes to grant for the purchase of shares of any class of the Company or for the purchase of any shares, bonds, securities, or obligations of the Company which are
convertible or exchangeable for, or which carry any rights, to subscribe for, purchase, or otherwise acquire shares of any class of the Company; and any and all of such shares, bonds, securities, or obligations of the Company, whether now or
hereafter authorized or created may be issued, or may be reissued or transferred if the same have been reacquired and have treasury status, and any and all of such rights and options may be granted by the Board of Directors to such persons,
firms, corporations, and associations, and for such lawful consideration, and on such terms, as the Board of Directors in its discretion may determine, without first offering the same, or any thereof, to any said holder.
We are a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K and are not required to file information under this item.
Our Chief Executive Officer and Chief Accounting Officer is responsible for establishing and maintaining disclosure controls and procedures for the
Company.
| (a) |
Evaluation of Disclosure Controls and Procedures
|
Based on his evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Accounting
Officer has concluded our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are not effective to ensure information required to be
disclosed by us in report we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (“SECs”) rules and forms and to ensure information
required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer to allow timely decisions regarding required disclosure.
| (b) |
Changes in the Company’s Internal Controls over Financial Reporting
|
Other than described above, there have been no changes in the Company’s internal control over financial reporting during the most recently completed
fiscal quarter have materially affected or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Recently the Company hired a financial professional with experience in financial reporting, the
creation of and management of internal control systems, as well as the ability to assist management in accounting controls and financial disclosure controls are necessary. This person has been hired on with the Company but does not hold the
position of Chief Accounting Officer. That role still resides with Mr. Eric Rice.
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.
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the year ended April
30, 2018.
On June 6, 2018, in connection with the Merger Agreement, the
Company issued an aggregate of 25,900,000 shares of its common stock to the former shareholders of Bioanomaly, Inc.
On June 8, 2018, the Company accepted subscriptions for
6,500,000 shares of the Company’s common stock in a private placement offering at a purchase price of $0.20 per share, for an aggregate offering amount of $1,300,000.
On June 8, 2018, the Company accepted subscriptions from two
non-affiliates for warrants to purchase 3,000,000 shares of the Company’s common stock at an exercise price of $0.30 per share expiring in four years.
The Company relied on the exemptions from federal registration under Section 4(2) of the Securities Act of 1933, as amended, Regulation S, and Rule
506 promulgated thereunder, based on its belief that the issuance of such securities did not involve a public offering, as there were fewer than 35 “non-accredited” investors, all of whom, either alone or through a purchaser representative,
had such knowledge and experience in financial and business matters so that each was capable of evaluating the risks of the investment and/or were located outside the United States.
None.
Not applicable.
None.
The following exhibits are incorporated into this Form 10-Q Quarterly Report:
|
Exhibit
Number
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Description
|
|
|
|
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Rule 13a-14(a) Certification of the Chief Executive and Financial Officer
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|
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Section 1350 Certification of Chief Executive and Financial Officer
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
* 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.
|
Quanta, Inc
|
||
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Dated: December 21, 2018
|
By:
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/s/Eric Rice
|
|
Eric Rice
|
||
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Chief Executive Officer (Principal Executive Officer and Principal Accounting Officer)
|
||
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities indicated.
|
Signature
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Title
|
Date
|
||||
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Chief Executive Officer
(Principal Executive Officer and Principal Accounting Officer)
|
December 21, 2018
|
|||||
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/s/Eric Rice
|
||||||
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Eric Rice
|
||||||
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/s/Jeffrey Doiron
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President and Chief Operations Officer
|
December 21, 2018
|
||||
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Jeffrey Doiron
|
||||||
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/s/Blake Gillette
|
Executive Vice-President
|
December 21, 2018
|
||||
|
Blake Gillette
|
||||||
19