Unless the context requires otherwise, references in this Form 10-Q to "we," "our," "us" and similar terms refer to VETANOVA INC.

Note about Forward-Looking Statements

This Form 10-Q contains forward-looking statements, such as statements relating to our financial condition, results of operations, plans, objectives, future performance and business operations. These statements relate to expectations concerning matters that are not historical facts. These forward-looking statements reflect our current views and expectations based largely upon the information currently available to us and are subject to inherent risks and uncertainties. Although we believe our expectations are based on reasonable assumptions, they are not guarantees of future performance and there are a number of important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including the risks described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020. By making these forward-looking statements, we do not undertake to update them in any manner except as may be required by our disclosure obligations in filings we make with the Securities and Exchange Commission under the Federal securities laws. Our actual results may differ materially from our forward-looking statements.





Overview

The Company is in its development stage and intends to build and operate solar-powered, carbon-negative greenhouses utilizing Artificial Intelligence assisted technologies to control the growing environment if it can obtain financing. The Company's revenue is expected to come from growing farm-fresh fruits and vegetables to be sold to local markets.

The Company intends to produce farm-fresh fruits and vegetables for local delivery in historically productive agricultural regions with high solar indexes and close to large urban areas of the United States, such as the Front Range of Colorado and Central Valley of California.

On August 4, 2021, the Company entered into an agreement with Mastronardi Produce Limited (Mastronardi), pursuant to which Mastronardi was granted the exclusive right to sell and market all US Grade No. 1 fresh fruits and vegetables produced from all of the Company's greenhouses that exist or may be built in North America.

On August 17, 2021, the Company acquired from a related party approximately 118 contiguous acres located near the Arkansas River in Avondale, Colorado, for 25,000,000 shares of the Company's common stock, which were issued on October 29, 2021, and $657,895 in cash to be paid by December 31, 2022. The property is just minutes from I-25, which dissects Colorado from North to South, making possible daily deliveries of farm-fresh produce within hours of harvest.

On November 8, 2021, the Company acquired from a related party approximately 39 acres for70,000,000 shares of the Company's common stock, which have not been issued, and $1,842,105 in cash to be paid by December 31, 2022. The property is contiguous to the 118 acres the Company purchased on August 17, 2021, and together define the Avondale Complex. The November 8, 2021 purchase contains 90,000 sq ft of greenhouse and 15,000 sq ft of warehouse. The property was purchased for 70,000,000 shares of the Company's common stock, which have been issued, and $1,842,105 in cash to be paid by December 31, 2022.

If the Company can obtain financing, it expects to retrofit the existing 90,000 sq ft greenhouse and 15,000 sq ft warehouse to operate exclusively with electric power provided by a to be constructed 2 MW solar array with batteries. The Avondale Complex retrofitted greenhouse and warehouse, when and if built, will grow tomatoes for marketing by Mastronardi. After operational trials of the retrofitted existing growing facilities, the Company expects to expand the Avondale Complex to 25 acres of growing facilities powered by a 25 MW solar field with batteries to produce various fruits and vegetables to be marketed by Mastronardi.

The existing greenhouse facility has 1,500 kVA conventional electrical service provided by the local electrical utility, which will be initially used for operations and later used as a mutual electrical grid back up after the Avondale Complex is retrofitted for solar power.

The estimated cost to install the solar system necessary to power the 90,000 sq ft existing greenhouse facility is $1,125,000 and will take six months to complete once construction commences. The estimated cost to convert the existing greenhouse from carbon-based equipment to electric-powered appliances and equipment is $750,000 and will take six months to complete once construction commences.

The Company plans to finance the cost of building the solar field and retrofitting the Avondale Project from private equity sources and loans from Colorado's Commercial Property Assessed Clean Energy Program (C-PACE).





Results of Operations

For Three Months Ended September 30, 2021 and September 30, 2020

The Company did not begin operations until July, 2020. For the three months ended September 30, 2020, the Company recognized $7,875 through a sub-lease of land agreement with an associated direct cost of revenue of $7,875. During the three months ended September 30, 2020, the Company recognized $278,541 in general and administrative expenses, producing a loss of $22,021.

For the three months ended September 30, 2021, the Company had no revenues. During this period the Company recognized $278,584 in general and administrative expenses, $5,357,895 loss from land acquisitions, and $4,934 in interest expense. This produced a loss of $5,641,413, of which $52,695 was attributable to minority ownership; therefore, the Company's shareholders recorded a $5,588,718 loss.

For Nine Months Ended September 30, 2021 and September 30, 2020

The Company did not begin operations until July, 2020. During the nine months ended September 30, 2020, the Company recognized $22,021in general and administrative expenses, producing a loss of $22,021.

For the nine months ended September 30, 2021, the Company had no revenues. During this period the Company recognized $651,509 in general and administrative expenses, $5,357,895 loss from land acquisitions and $4,934 in interest expense. This produced a loss of $6,014,338, of which $52,695 was attributable to minority ownership; therefore, the Company's shareholders recorded a $5,961,643 loss.

Liquidity and Capital Resources

We have begun our operations relying on external investors. Since inception and through September 2021, we have raised $1,118,801 in capital.

See Note 1 to the financial statements included as part of this report for a discussion of our anticipated capital requirements and plans to fund our anticipated capital requirements.

The Company received preliminary approval from C-PACE, a Colorado specialized solar financing program developed by federal, state and county governments. The Company is in the process of developing the engineering necessary to complete the C-Pace financing application.

We believe with additional capital from third party investors we will have sufficient capital to meet our anticipated cash needs for at least the next twelve months.





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To date we have only had limited revenue, which occurred the last six months of 2020 via a sublease of farming land. Therefore, presently operations are not sufficient to sustain our operations without the additional sources of capital. As of September 30, 2021, we had cash and cash equivalents of $87,798. We used $1,066,427 in cash in our operating activities during the nine months ended September 30, 2021.





Critical Accounting Policies

We have identified the policies below as critical to our business operations and the understanding of our results from operations. The impact and any associated risks related to these policies on our business operations is discussed throughout "Management's Discussion and Analysis of Financial Conditions and Results of Operations" where such policies affect our reported and expected financial results. For a detailed discussion of the application of these and other accounting policies, see Note 2 of the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q. Our preparation of such condensed consolidated financial statements and this Form 10-Q requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.





Impairment Policy

At least once every year, management examines all of our assets for proper valuation and to determine if an impairment is necessary. In terms of real estate owned, this impairment examination also includes the accumulated depreciation. Management examines market valuations and if an additional impairment is necessary for lower of cost or market, then an impairment charge is recorded.

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